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California Biodiesel Alliance News
California's Biodiesel Industry Trade Association
July 2012
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Greetings!, CBA is very excited to announce that our 2013 conference will take place on Monday, February 4th and will be co-located with the National Biodiesel Board's annual conference at the Mirage Hotel in Las Vegas. Stay tuned to this newsletter or our Home page for further details. Congratulations to Community Fuels and Crimson Renewable Energy, both of which have received BQ-9000 certification in recent months. This month's Who's Who article features Todd Hill of Promethean Biofuels. Todd is a CBA board member and host of the 2012 Collective Biofuels Conference, to be held in Temecula this August. NOTE: Our Home page posts greater detail on the policy issues covered below including updates as new information becomes available, so please check it out between newsletters to stay abreast of the latest developments. To view back issues of this newsletter and CBA Email Alerts click on the "View CBA Email Newsletter Archive" button on our Home page. |
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2012 PROVES THAT LCFS MATTERS
IN AN RFS2 WORLD
In 2011, California's biodiesel industry was finally bouncing back after several years suffering through bad economic times, State Water Board actions that resulted in massive fueling closures, and bad fuel that made its way into the marketplace causing a cascade of negative effects. This year, local producers are struggling again with tight margins due to a lapse in the federal tax credit and RIN fraud outside of California that has made it difficult, especially for small producers, to properly sell RINS. The National Biodiesel Board (NBB) continues its efforts to reinstate the tax credit. It responded to the nationwide RIN crisis by putting together a task force that quickly endorsed Genscape's RIN Integrity Network, a service that audits companies and provides credible RIN validation. This was a major positive step, but fraud in the RIN markets, which caused a crisis of confidence and a significant decline in RIN prices this year, is far from under control. EPA has stated their intention to address this problem and implement a new plan beginning in 2013, but time is of the essence.
Since November of 2011, small and medium producers, who make up the majority of California's industry and are innocent victims of RIN fraud, have had trouble selling RINs to obligated parties. As a result, some have slowed or even stopped production. Jennifer Case, CEO of New Leaf Biofuels in San Diego, presented her company's experience at a recent House subcommittee hearing on the subject of biodiesel RIN fraud. Highlights of testimony from Case and others, including suggestions to EPA for restoring confidence in the RIN program, are detailed in a July 11th article in Biodiesel Magazine.
CBA Chairman Eric Bowen said, "It is very important for California's Low Carbon Fuel Standard (LCFS) program to succeed because it will help make California's biodiesel industry less dependent on federal policy, which isn't doing enough." LCFS, one of the key elements of AB 32, the Global Warming Solutions Act, has the potential to create a market of up to 700 million gallons per year for biodiesel in the state. Although LCFS has many vocal opponents, and the final decision in a lawsuit against it is not yet in, the California Air Resources Board (ARB) has been given a legal green light for both implementation and enforcement and is solidly behind what they continue to publicly state has been a successful program since it took effect in January 2011 (even during the months when the program was under a federal injunction).
ARB'S 2012 LCFS Reporting Tool (LRT) Quarterly Data Summary - Report No. 1, released in June of 2012, lists the total credits and deficits reported by regulated parties through 2011 and the first quarter of 2012. About 340,000 metric tons (MT) of credits were generated in the first quarter of 2012 and about 230,000 MT of deficits. Although ethanol accounts for a huge portion of those credits, biodiesel accounts for 6%, a number that is poised to increase considerably in the near future, according to one major producer.
As it has over the years, CBA continues to work with national experts, including NBB policy and science staff, to insure biodiesel's success under LCFS. CBA believes that LCFS, which is still in its infancy, has great potential to help create a thriving biodiesel industry that contributes jobs and much more to California. Our industry is confident that biodiesel, as a domestic, renewable energy source with some of the lowest carbon intensity numbers available, will increasingly be valued in the LCFS marketplace and among policy makers for the important role it can play in reaching California's carbon reduction and energy independence goals.
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RUST PROGRAM OFFERS GRANTS AND LOANS FOR UST REPLACEMENT  The State Water Resources Control Board's Replacing, Removing, or Upgrading Underground Storage Tanks (RUST) Program offers two financial assistance programs to help small businesses comply with UST regulations.
RUST grants, ranging from $3,000 to $50,000, are available to small businesses with fewer than 20 employees. They can be used to finance up to 100 percent of the costs necessary to upgrade UST components and to conduct enhanced leak detection tests. RUST loans, ranging from $10,000 to $750,000, can be used to finance up to 100 percent of the costs necessary to upgrade, remove, or replace UST equipment including tanks. With a 2% loan fee due up-front and a 10-year repayment schedule, loans are currently being offered at a .5 percent interest rate. For more information visit the RUST program website or download this RUST Factsheet. Program Chief, Janice Clemons, encourages interested parties to apply as soon as possible. She may be reached at 916-341-5657. |
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REGULATORY AND POLICY ISSUE UPDATES
EMISSIONS
CBA continues to involve national technical and policy experts in the California Air Resources Board's biodiesel testing and development of our state's first emissions regulations for biodiesel. Between newsletters, our Home page will post important new information as it becomes available, including details of a very important public workshop on this issue to be held in Sacramento within the next few months.
CALIFORNIA ENERGY COMMISSION (CEC) FUNDING
No update this month. See our Home page for the latest on this issue.
LOW CARBON FUEL STANDARD (LCFS)
A new guidance document for producers and regulated parties to use to determine and report the carbon intensities of mixed-feedstock biodiesel was posted on The California Air Resources Board's (ARB) LCFS webpage on July 13th. This document is inconsistent with CBA's prior discussions with ARB, and we are following up to find an appropriate workable solution.
UST REGULATIONS
See the article above on the RUST financial assistance program. Details of the new State Water Board regulation governing USTs in California are available in the UST Compliance section of our Regulatory Matters webpage.
FEDERAL RENEWABLE FUEL STANDARD (RFS2)
CBA strongly supports the national effort to maintain the EPA's proposed volume increase to 1.28 billion gallons in 2013. If you've not sent a letter of comment, please go the National Biodiesel Board's Fueling Action webpage and act today.
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CBA WELCOMES NEW MEMBERS
CBA Welcomes These Companies Who Have Joined Us in 2012
______ JOIN CBA AS AN INDIVIDUAL, A NONPROFIT, OR A BUSINESS _____ If you are reading this and are not yet a member, please join us. CBA offers membership levels of $25 for students; $100 for individuals and nonprofit organization; $500 for small businesses; and $2000 (Silver). Full voting memberships are available by application at $3000 (Gold) or $5000 (Platinum). Our Join Us webpage has details and an easy online membership fee payment process. Membership benefits include: - CBA's Email Newsletter with important industry updates and features about Who's Who in biodiesel in California.
- CBA's Email Action Alerts that let you know when your help can really make a difference.
- Participation in quarterly member meetings and legislative/regulatory visits.
- Internal email communications on important industry issues as they arise.
- Discounts on CBA events.
- Your company's logo and link on our Members webpage ($500 level and up).
- Special recognition at events and in publications (Platinum members).
_______ SIGN UP FOR EMAIL ALERTS _____ Anyone can sign up to get CBA's special Alert emails, which we send out when we need biodiesel stakeholders and enthusiasts to take action on important issues facing our industry. Visit our Home page and add your email address. _______ VIEW PAST NEWSLETTERS AND EMAIL ALERTS _____ Just click on the "View CBA Email Newsletter Archive" button on our Home page. |
WHO'S WHO IN CALIFORNIA BIODIESEL
Todd Hill
Chairman and Managing Principal, Promethean Biofuels
Physics student turned entrepreneur Todd Hill met Josh Tikell in the summer of 2008 at a Los Angeles Biodiesel Co-op meeting. Todd, a serial entrepreneur inspired to make a life doing environmentally sustainable work, says that Josh encouraged him to "go big" with the plant Promethean was building, which at that time was all about glycerine. Although Todd liked biodiesel as a fuel and an additive, he thought that there were too many biodiesel plants being built and many involved precarious deals with large corporations and big investors. He had seen first-hand a sad fact of California's biodiesel industry history, that a number of start-ups had bought expensive plants that never worked at all. Todd ended up processing 10,000 gallons of rapeseed oil into biodiesel because, at the time, he didn't know of another plant that could do it. Ironically, Promethean began making biodiesel as a by-product of glycerine.
In January of 2009, after working for several years to secure permits, Promethean's cooperative, with four founding members, opened its processing plant with a mission to operate for the good of its employee-owners and consumer-members. Located next to a community recycling center, the company's commitment was to the use of local area feedstocks (including those from nearby residents bearing gifts in 8-ounce Mason jars). Today Promethean, with 8.5 employees, maintains the same cooperative structure and ownership. The company was not acquired by a Canadian oil and gas company, as reported in industry media.
"As a small producer, we have to work harder to find the best set of services for each customer," Todd said. Promethean formed a new company, Grease Masters, which employs 3 people, to handle the oil and grease collection business and has tolling and blending operations, which it hopes to expand. Today, Promethean still sells more industrial grade esters for use in the manufacturer of concrete, roofing tiles, and other products, than biodiesel, though Todd says that is not the company's intent.
Promethean's intent is to "move to the next phase" with biodiesel, and the company has taken a number of steps to develop its biodiesel business, including finalizing its RFS2 registration in July of 2011. In the last two years, Promethean has focused on improving internal testing as part of an effort to institute a new fuel quality management system. Recently, the company joined Genscape's RIN Integrity Network, which has completed two on-site audits of the plant's quality control processes. Also, the company is well on its way to getting its BQ-9000 certification.
Todd believes it's important for biodiesel companies, including small producers, to adopt industry standards and participate in processes that unite and stabilize the industry. "The biodiesel industry needs to do all we can to address the fraud in the RIN markets and to offer the kind of transparency that builds confidence in our industry among obligated parties," Todd said.
Toward that end, Promethean is excited to be hosting the 2012 Collective Biofuels Conference in Temecula this August. Todd praises the founders' consistent focus on quality and getting the science right and says that the original emphasis on home brewing has morphed over the years to a focus on issues specific to small producers (under 5 mgpy). He also points out the great price points for such high quality speakers and networking opportunities. The conference will include tours and classes at the Promethean plant, and a major push is underway to finish planned plant upgrades for this showcase.
Like a number of producers who have had to adjust the projections of 2012 volumes they made earlier in the year due to lower RIN prices in recent months, Todd stresses that he just wants solid growth going forward. Proud to be small, Promethean's goal is to increase its biodiesel production from 400,000 in 2011 to 500,000 gallons this year.
CBA thanks Todd, who recently joined our board of directors, for his efforts to establish Promethean as a quality biodiesel producer and for getting involved in industry efforts in California. We hope the conference is a great success and were happy to learn that as part of his run for City Council of Temecula this November Todd is making a case for the use of biofuels in city fleets.
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Thank you for your time and efforts on behalf of biodiesel in California. We look forward to working with you.
Sincerely,
Celia DuBose for
Eric Bowen, Chairman
California Biodiesel Alliance
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