CBA News: June 2015

California Biodiesel Alliance News

California's Biodiesel Industry Trade Association

June 2015

In This Issue

California Participates with National Industry in Hill Visits on RFS: Join Us in Calling for Higher Volumes!

California Eyes Level Playing Field for Bio-Blended Off-Road Diesel

Biofuels Initiative Could Boost Local Companies

Calif. Senate Passes Climate Package Aiming for 50% Renewable Power, Halving Petroleum Use

Pope Francis Advocates for Renewable Energy

CALIFORNIA INDUSTRY NEWS: Agron, CALSTART

REGULATORY AND POLICY ISSUE UPDATES

CBA WELCOMES NEW MEMBERS

Greetings!,

We begin with this rallying cry on RFS:

No less than 2 billion gallons for 2016 and 2.3 billion gallons for 2017!

Click here to send a letter online in just a few minutes that responds to the RVO numbers EPA released in late May. Our lead story has more details on this and on our state industry member visits to Capitol Hill this month.

In the wake of a very successful two-day CBA lobby event in Sacramento in May, which included meetings with legislators and staff and state agency staff, California updates abound. We are especially pleased to reprint an OPIS story on AB 1032, the CBA-sponsored bill to solve the dyed diesel tax problem, and to report that after passing the House on an 80-0 vote, it is being heard this week in the Senate Transportation Committee.

We include an article on the Biofuel Initiative, a coalition effort to obtain funding from Cap and Trade auction proceeds under ARB's Greenhouse Gas Reduction Fund (GGRF) for both production and infrastructure. An article on climate legislation, which some are calling "the most far-reaching not just in California history, but in U.S. history" is also included.

The Policy section below has essential updates on LCFS, ADF, and the CEC's proposed regulatory update to the AB 118 program to eliminate the economically damaging emissions credits discounting provision.

There's also a heartwarming article about the Pope's encyclical on climate change. However, shockingly, the SF Chronicle reports that in it, "the Pope blasts California's cap-and-trade system," siting a concern that poor people will be hurt. The article includes a rebuttal from California Senate President Pro Tem Kevin de León, who wrote the California law requiring that 10 percent of our state's Cap and Trade program proceeds be spent in disadvantaged communities!

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click on the "View CBA Email Newsletter Archive" button on our Home page.

California Participates with National Industry in Hill Visits on RFS

Join Us in Calling for Higher Volumes!

This month, CBA board members Jennifer Case of New Leaf Biofuel and Doug Smith of Baker Commodities participated in the National Biodiesel Board's DC Fly-In and met with members of Congress and their staff regarding the EPA's Renewable Volume Obligation (RVO) proposal under the Renewable Fuel Standard program (RFS), which was recently released on May 29th. Jennifer and Doug met together with Rep. Juan Vargus (D-CA-51st) from the district where New Leaf is located. Jennifer met with staff for California Senators Feinstein and Boxer and for Rep. Scott Peters [D-CA52].

Doug, who participated in visits with the National Renderers Association, also met with Senator Mazie Hirono (D-HI); Senator Jon Tester (D-MT); Rep. Mark Takai (D-HI); Rep. Ed Royce R-CA-39th); Rep. Tulsi Gabbard (D-HI-2nd) and with staffers for Senator Ron Wyden (D-OR); Senator Brian Schatz (D-HI); Rep. Seth Moulton (D-MA-6th); and key committees, including both the Senate and House committees on agriculture.

Some 120 other producers and leaders from around the country made our industry's case that, while we are happy that the EPA has released numbers that call for growth in all fuel categories, the 2016 and 2017 RVO numbers for biodiesel (the "out years") do not adequately represent the capability of the biodiesel industry and should be raised. The proposed 2016 number is 1.8 billion, which is almost exactly what the national industry produced in 2013.

It is expected that the EPA's recent approval of a pathway for Argentinian biodiesel will substantially increase the available biodiesel supply by over 400 million gallons this year alone. The Argentinians exported over 400 million gallons to Europe in previous years, but Europe has now imposed substantial import duties, essentially closing the market to them. The U.S. is now the only place where the substantial volumes that exceed Argentina's own demand are able to go.

According to Doug, Senate and House members, as well as the Senate and House agriculture committee staff showed concern that these imports would affect the U.S. biodiesel industry, and made comments that they would pursue information to help curtail these imports over our domestic industry products. Many were not even aware of the Argentinian biodiesel situation.

Another issue at play is that, in response to the reduction of the statutory mandates for the "advanced biofuels" category, the RIN value for that category plummeted, which has opened the door for sugar-cane ethanol from Brazil to come into the market to fill that category. The EPA says in its proposal that their biodiesel volume numbers allow for a slow increase, recognizing that biodiesel would also go to help fill the rest of the "advanced biofuels" category. However, our industry is very concerned that this volume will be met by sugar-cane ethanol, which will not provide the biodiesel industry with the growth in the out years as EPA intended.

Please join us in asking that the 2016 and 2017 volumes be increased for both the "biomass-based diesel" and the "advanced biofuels" categories in order to accommodate all of the worldwide biodiesel, sugarcane, and other low carbon fuels that are coming into the market. Please highlight in your letters that the biodiesel industry is capable of producing 2.4 billion and 2.7 respectively for 2016 and 2017, and anything less than 2.0 and 2.3 billion would be unreasonable.

The NBB's Fueling Action center has a quick online way for you to support our industry's request and tell your story. Please take a moment to get your comments in before the July 27th deadline.

Originally published by Oil Price Information Service (OPIS), Gaithersburg, MD. Additional reproduction is strictly prohibited

Wednesday, June 17, 2015 11:38:00 AM

California Eyes Level Playing Field for Bio-Blended Off-Road Diesel

Off-road diesel marketers in California may soon be able to recoup biodiesel tax

they paid upfront as the Golden State is considering removing the excise tax on

biodiesel blended into red-dyed diesel.

The bill, AB1032, sponsored by the California Biodiesel Alliance, provides that,

where tax is not imposed on dye-blended biodiesel fuel upon removal from the

terminal rack, if tax was previously imposed on the biodiesel fuel portion, then

a claim for refund is allowed for the tax paid on that biodiesel fuel. This bill

passed the Assembly on June 3 with a vote of 80-0, and it is now making its way

through the committees in the Senate.

This biodiesel tax refund could result in a bottom line boost of several

thousand dollars a month for some marketers, depending on individual sales

volumes. It also depends on locations. The more agriculture-heavy markets such

as Fresno would see a bigger impact.

Some marketers are now paying biodiesel excise tax for sales of red-dyed diesel

even though the off-road diesel is designated as a tax-free fuel. Some marketers

are recouping this biodiesel tax by tagging on half a penny per gallon more on

the price of red-dyed diesel, widening the price gap between off-road and on-

road diesel to a penny. This practice could price these marketers with prices

half a penny higher out of the wholesale market.

A blender has to pay 11cts/gal for biodiesel excise tax, and a 5% biodiesel

blend in diesel will translate to a tax cost of about half a penny per gallon.

OPIS reported in May that Tesoro, Apex and Idemitsu are tagging an extra half a

penny per gallon to their red-dye diesel in an effort to recoup the biodiesel

tax that suppliers pay for blending up to 5% of biodiesel into rack diesel

supplies.

A majority of other marketers at the same terminals, including Colton, Fresno

and San Jose, are pegging their rack price spread between off-road and on-road

diesel at half a penny a gallon.

Unlike on-road diesel, suppliers are not allowed to charge the biodiesel tax to

off-road diesel prices because red-dyed diesel is designated as tax-free.

This penny price disparity is evident in only some terminals due to the limited

blending availability of biodiesel in California. These include Kinder Morgan

terminals in Colton, Fresno and San Jose.

While the bill, if passed, could allow diesel marketers to recoup the biodiesel

excise tax paid upfront before blending at the terminals, the exact procedure of

recouping and calculating this tax refund or claim retroactively remains

unclear.

Marketers pay the biodiesel excise tax upfront for supplies into one common

biodiesel tank at Kinder Morgan terminal. This supply is for blending into both

on-road and off-road diesel racks sales. The biodiesel is blended in-line by

Kinder Morgan, which specifies that diesel sold at its racks could contain up to

5% of biodiesel. Red dye is added at the truck loading racks.

Based on that 5% blend specification, the biodiesel percentage in diesel sold at

Kinder Morgan terminals could range from 0.001% to a maximum of 5%. This could

prove to be a headache for marketers to quantify the biodiesel tax paid for red-

dyed diesel.

Some marketers said that the current Kinder Morgan terminal system does not have

separate biodiesel tanks for on-road and off-road diesel.

However, some other marketers said that the solution to this problem of

recouping biodiesel tax retroactively is to nominate 5% biodiesel for off-road

diesel blending at Kinder Morgan terminals and file for a tax refund based on

that nomination, regardless of the actual biodiesel percentage on the finished

red-dyed product.

While the proposed tax refund would boost rack profits and margin for off-road

diesel, most marketers expect more back-office paperwork to match racks sales

volumes with biodiesel nominations retroactively.

Level Playing Field

According to the bill, some suppliers have been unable to obtain a credit or

refund for taxes paid on biodiesel that enters California, or is produced in-

state, and is delivered into their terminals as tax-paid, but is subsequently

removed at the terminal rack for a nontaxable purpose.

While current law allows reimbursement for tax paid on diesel fuel that has been

taxed more than once, the current statutory regime does not account for tax-paid

diesel fuel that is taxed coming into the terminal but removed for nontaxable

purposes (i.e., dyed biodiesel blends), the bill said.

In such cases, the supplier is unable to recover the tax from the customer and

is also unable to seek reimbursement for the tax from the State Board of

Equalization (BOE).

Since the tax-paid biodiesel portion is blended with ex-tax dyed diesel fuel, it

is not subject to taxation when removed from the terminal rack. Because there is

no subsequent taxable event with which to claim the credit, the current statute

does not provide for a reimbursement of the tax-paid portion of the biodiesel.

This bill allows a diesel fuel tax refund to a supplier for that portion of tax-

paid biodiesel fuel removed from the terminal rack as a dyed biodiesel blend.

The BOE estimates that this bill would have resulted in roughly $779,000 in

refunds in fiscal year (FY) 2012-2013, and roughly $2.83 million in FY 2013-

2014.

AB 1032 would help level the playing field for biodiesel in California. The

Diesel Fuel Tax Law, which imposes a tax on diesel fuel, currently provides for

a reimbursement for the amount of that tax to entities who have used that tax-

paid fuel in certain nontaxable uses.

However, because clear biodiesel is currently transported to terminals for

blending by truck rather than pipeline, biodiesel producers, who have paid the

Diesel Fuel excise or "road tax," must charge the refiner/blenders for the tax,

and the refiner/blender is not currently able to recoup the funds for the tax

paid on the biodiesel fuel portion of dyed blended diesel fuel removed from the

terminal.

The bill said that the allowance for a reimbursement (through a claim for

refund), when the supplier can show that they have paid the tax on that

biodiesel removed from an approved terminal, is a necessary and widely agreed

upon solution to this problem.

The BOE would not have any administrative issues with the refund provisions. The

BOE administers all provisions of the Diesel Fuel Tax Law, including the

exemption and refund provisions. BOE staff works closely with the fuel industry

to remain aware of industry trends and practices, and provides information and

assistance in the form of special notices, publications and reports, answers to

frequently asked questions, and newsletters.

The BOE has previously provided guidance to suppliers that refunds are not

allowed for tax-paid biodiesel fuel converted to dyed biodiesel fuel.

--Edgar Ang, eang@opisnet.com

(Recordnet.com)

Biofuels Initiative Could Boost Local Companies

By Reed Fujii

Record Staff Writer

Posted Jun. 3, 2015 at 6:58 PM

Assemblywoman Susan Eggman has joined with other California legislators in calling for creation of a $200 million program to boost biofuels production in the state, including in Stockton, which is home to biodiesel and ethanol plants.

The Stockton Democrat is among eight Assembly members and three state senators who wrote to the state Legislature's budget leaders currently hammering out a final budget bill for the coming fiscal year.

"The requested Cap and Trade funding would create the Biofuels Initiative to provide production incentives and support infrastructure development, which will provide economic and environmental benefits to many of California's disadvantaged communities," the letter explains.

"I've long been a booster of the kind of programs that find business opportunity rather than obstacles in reaching the state's environmental goals," Eggman said Wednesday from Sacramento. "We need biofuels in order to meet greenhouse gas emissions targets. This is an opportunity to create local jobs, support local businesses and meet critical emissions targets."

The program aims to develop in-state production of biofuels to meet at least 20 percent of the supply needed to California's greenhouse gas emissions target by 2020.

While California has programs in place to reduce carbon emissions, much of the low-carbon fuels now consumed in the state are produced in other areas, said Lisa Mortenson, chief executive of Community Fuels, which operates a biodiesel refinery at the Port of Stockton.

"Producers in California compete against producers of biofuels in other states and other countries," she said Wednesday. "Unfortunately, California does not have policies that are supportive of in-state production."

The proposed Biofuels Initiative would provide those incentives.

And the benefits go beyond just protecting the environment, Mortenson said.

Community Fuels' refinery, for example, provides many high-skill, advanced manufacturing jobs in a region that generally lacks such opportunities.

"The low-carbon fuel standard should not just be about cleaning the air," she said. "The low-carbon fuel standard should be about cleaning the air and creating jobs. We need both."

Eggman shared those thoughts.

"There are meat-and-potatoes reasons to support biofuels producers in California," she said, "the creation and retention of jobs, the income generated to the state - but it's consistent with environmental policy goals, as well."

- Contact reporter Reed Fujii at (209) 546-8253 or rfujii@recordnet.com. Follow him on Twitter @ReedBiznews.

(CLIMATE WIRE)

Calif. Senate Passes Climate Package Aiming for 50% Renewable Power, Halving Petroleum Use

Anne C. Mulkern, E&E reporter

Published: Thursday, June 4, 2015

California's Senate yesterday accelerated the state's push for clean energy, passing a bundle of climate bills that aimed to shrink sharply greenhouse gas emissions, increase renewable power to 50 percent of electricity and chop in half petroleum use by 2030.

The upper chamber's set of 12 measures also included one calling for two state pension funds, which are the nation's largest, to divest from thermal coal. Another bill sought to ramp up transit and inner-city rail. There were multiple measures looking to develop plans to help the state adapt as climate change proceeds.

The bills still must pass the state's Assembly, and similar ones from that chamber must be reconciled with Senate versions. But Senate President Pro Tem Kevin de León (D) cast the effort in momentous terms, calling the climate legislation "the most far-reaching not just in California history, but in U.S. history."

"This package of bills will put California on a pathway to sustainable economic growth, protecting the health of our communities and the integrity of our environment while also spurring a wave of innovation in our energy and transportation sectors," de León said as he stood with a host of other senators after passage.

"These policies will bring much-needed investments to our infrastructure systems, reduce energy costs for families, create jobs in construction and energy efficiency retrofitting, reduce the harmful air pollutants that our children breathe into their lungs, and increase the livability and walkability of our communities," he added.

One of the lead bills in the package was from de León. S.B. 350 would put into law the goals Gov. Jerry Brown (D) set out in January, increasing the state's renewable power mandate to 50 percent, halving petroleum consumption and requiring a 50 percent improvement in the energy efficiency of buildings.

The state Senate also approved S.B. 32 from Sen. Fran Pavley (D), which would extend the state's landmark climate law. Her legislation directs the California Air Resources Board to limit the state's greenhouse gas emissions in 2050 to 80 percent below 1990's level.

Bills in the package passed mostly on party-line votes, with Democrats having enough members to not need GOP support. The Senate's Republican caucus called the package a "job killer." Greenhouse gases "don't end at California's border?" said Senate Minority Leader Bob Huff (R).

"When we stop burning coal for fuel, it doesn't stop Arizona or other states from doing it," Huff said. "We have a lofty and noble goal. But other than feeling good about it, what does it accomplish?"

But Democrats control both chambers in California's Legislature. Those familiar with Golden State politics said they expected the climate measures to pass out of the Assembly, though some changes to the language were expected.

Putting 'meat on the bones' of state targets

There are more moderate Democrats in the lower chamber. There's likely to be talk about putting "more meat on the bones of S.B. 350," said Ann Notthoff, director of California advocacy for the Natural Resources Defense Council.

The language in the bill on petroleum use, for example, tells the state air board to adopt a "cost effective, and technologically feasible," means of halving gas and diesel consumption. But it doesn't specify a baseline level from which to subtract the 50 percent. The oil industry has complained that more details are needed so that Californians know what to expect.

Notthoff said there could be debates about how much detail to add on the other parts of S.B. 350 dealing with the renewable energy mandate and building energy efficiency. S.B. 32 also sets the goal for carbon emissions in 2050 but doesn't describe how to accomplish it.

"Right now, the bill language sets out specific targets. It's not that prescriptive how you get there," Notthoff said.

"There's going to be a healthy conversation about how prescriptive" to be, she said, versus how much authority should be delegated to ARB.

Sierra Club California Director Kathryn Phillips said there's the possibility that some moderate Democrats would seek to weaken the bills. She noted that Assemblyman Henry Perea (D) last month took one of his existing bills, A.B. 1511, stripped out the language and amended it to include wording that would change rules on the state's renewable power mandate.

Perea's amendments said that a utility could try to meet its green power requirement with the energy from distributed generation, which generally means rooftop solar and other local systems. Right now, that cannot be counted toward the renewable portfolio standard (RPS). The new version of A.B. 1511 also would let utilities recover in rates the costs of any program offering incentives to increase building energy efficiency. The revised measure was held in the Rules Committee.

"The challenge here is to see what Henry Perea and the moderates do" as the climate package moves forward, Phillips said.

There is opposition from some in the oil industry. The Western States Petroleum Association (WSPA), the trade group representing BP, Chevron Corp., Exxon Mobil Corp., Shell Oil Co. and other oil companies, yesterday criticized S.B. 350.

"Unfortunately, it's not a surprise or 'historic' that the Senate pro Tem's bill passed out of the Senate," WSPA President Catherine Reheis-Boyd said in a statement. "What is surprising is the lack of serious discussion on this major proposal and its implications for California's families and businesses.

"We will continue to educate consumers and businesses on the enormous negative impact the legislation will have on all Californians and hope members of the Assembly are more willing to take a critical look at this legislation than did their counterparts in the Senate," she added.

Green groups and other climate advocates lauded the package's passage.

"Parents and families are thankful for the leadership of Senator Pro-Tempore Kevin De Leon and Senator Fran Pavley," Lisa Hoyos, director and co-Founder of Climate Parents, said in a statement. "They are prioritizing kid safe, climate safe energy over the narrow political interests of fossil fuel companies that would rather thwart progress than innovate. Our kids are our state's most precious resource, and the Senate's vote to protect their health and safety by reducing fossil fuel pollution and expanding clean energy underscores why California is the Golden State."

Can utilities 'leapfrog into the 21st century'?

The goals set out by de León's S.B. 350 and Pavley's S.B. 32 are achievable, said Dan Kammen, director of the Renewable and Appropriate Energy Laboratory at the University of California, Berkeley.

Every research group in California that has examined the issue has indicated the ambitions are realistic, he said. The real issue is all of the different groups that have different perspectives on how to meet the targets and different recommended pathways.

"That just really highlights that we really could do it," Kammen said.

As well, the cost would not be high, he said. Solar prices are falling, and California has shown in recent years that clean energy is a job creator. About 40 percent of all of the nation's venture capital investment in clean energy technology flows through California, Kammen said.

However, "there are real challenges," Kammen said. Among those, he said, is that the state's Public Utilities Commission will have to develop a new set of rules for utilities.

"They're going to have to make the distributed energy market the market to be in, and that's a lot of coordination," Kammen said. In addition, he said, "utilities, they're going to have to really leapfrog into the 21st century. They're going to have to really change."

California has a directive that is not yet in law that every new home after 2020 should have a solar rooftop and be "aggressive about energy efficiency," he said. The state also needs to "incentivize storage being built ... so that lots and lots of businesses are storing power" they can sell back to utilities.

(DOMESTIC FUEL)

Pope Francis Advocates for Renewable Energy

Posted on June 19, 2015 by Joanna Schroeder

Addressing all persons living on the plant, Pope Francis' LAUDATO SI', Encyclical Letter calls on mankind to address climate change and heal earth. He writes, "Every effort to protect and improve our world entails profound changes in "lifestyles, models of production and consumption, and the established structures of power which today govern societies". He stresses throughout the Encyclical, "The urgent challenge to protect our common home includes a concern to bring the whole human family together to seek a sustainable and integral development, for we know that things can change".

"I urgently appeal, then, for a new dialogue about how we are shaping the future of our planet," writes Pope Francis and notes that while efforts have been undertaken, they are not enough. "Regrettably, many efforts to seek concrete solutions to the environmental crisis have proved ineffective, not only because of powerful opposition but also because of a more general lack of interest."

Pope Francis' Encyclical spans six chapters with each section focused on a particular area of importance to climate change discussions and action steps to be undertaken. In chapter 5 he focuses on approach and action as it relates to energy and calls for the end of fossil fuel use.

"We know that technology based on the use of highly polluting fossil fuels - especially coal, but also oil and, to a lesser degree, gas - needs to be progressively replaced without delay. Until greater progress is made in developing widely accessible sources of renewable energy, it is legitimate to choose the lesser of two evils or to find short-term solutions," continues Pope Francis.

He calls for a worldwide consensus - all countries - to come together to develop "renewable and less polluting forms of energy". While he acknowledges the work already being done to develop more sustainable, alternative forms of energy, he stresses that countries must come together and take responsibility for paying for the costs of energy transition and that politics and businesses must speed up their pace of acknowledgement and action to curtail climate change.

If only one message were received by those reading LAUDATO SI, it is that humans are at the center of climate change, that none of us is without fault, and it will take all of us to restore earth to a state of health and beauty.

CALIFORNIA INDUSTRY NEWS

(Santa Cruz Sentinel)
Watsonville Touts Economic Potential at Biodiesel Plant

Ryan Masters, newsroom@santacruzsentinel.com, @ryanmasters831 on Twitter

Posted: 06/02/15, 5:45 PM PDT | Updated: 2 weeks, 5 days ago

WATSONVILLE >> Roxby Hartley holds two fuel samples up to the sun. The first contains industry standard biodiesel the color of weak coffee. The second contains Agron Bio Energy's clear biodiesel.

"We can create ultra-pure biodiesel from raw materials in under five minutes here in Watsonville," Hartley said. "Forty thousand gallons of it a day."

As research and development director for Agron Bio Energy, Hartley has spent the past five years bringing what he calls "the cleanest biofuel currently available" to market.

Tuesday morning, city officials and business leaders gathered in front of the bioenergy company's facility at 860 W. Beach St. to tout Agron's success as a model for continued economic growth in Watsonville.

During the 15-minute press conference Tuesday, Hartley described Watsonville as an ideal partner and home for Agron Bio Energy, formerly North Star Biofuels.

"Three years ago we were looking for a place to build this facility in Monterey County, but couldn't find the right spot," Hartley said. "A friend at Granite Construction told us about this site. We knew right away it was perfect."

Hartley cited Watsonville's location on a major trucking route at the center of the state as a key driver in the decision. He also praised the support of Watsonville's police and fire departments and the large local talent pool from which Agron hired its 30 employees.

"If you want to build a high-tech business, Watsonville is a great place to do it," Hartley said.

Mayor Nancy Bilicich praised Agron as an important new member of the Watsonville business community. She said that although the city is aggressively courting tech companies, Watsonville continues to be "a welcoming community to all businesses."

"You name it, we want it," Bilicich said. "Think Watsonville."

Bud Colligan is a veteran venture capitalist and co-chair of the Monterey Bay Economic Partnership. He described Watsonville as a potential hotbed for innovation in the fields of technology and agriculture.

"This is a great place to develop technologies for irrigation, RFIDs (radio-frequency identification) to track the supply chain, air and soil sensors, the use of drones, any number of things," Colligan said.

Colligan also believes Watsonville has the potential to draw from the county's rich tech labor pool.

"Amazon.com decided to come to Santa Cruz County because they went on LinkedIn and found 1,000 mobile engineers living within 10 miles of the site," he said. "The potential here is vast."

As the press conference concluded, a city of Watsonville street sweeper pulled up to the Agron facility and filled its tank at the pump.

Agron's biodiesel is made from beef tallow. Because it is derived from animal byproducts, which have little to no value to commercial food industries, Agron has largely avoided the food versus fuel debate which has beleaguered the industry for years.

In addition, Hartley says that Agron's biodiesel contains little nitrogen oxide, a major emitter of greenhouse gases, which makes it "the cleanest biofuel in California, if not the U.S."

"We believe we can help not just Santa Cruz County meet its carbon reduction goals, but eventually the whole state," Hartley says.

____________

(CALSTART)

CA AIR BOARD SELECTS CALSTART TO MANAGE CLEAN TRUCK AND BUS INCENTIVE PROJECT

California Air Resources Board's point-of-sale voucher project makes state leader in zero-emission and hybrid trucks and buses

Pasadena, CA - The California Air Resources Board (ARB) has selected CALSTART to continue to administer the largest state clean truck and bus incentive program in the nation. Under this new contract, CALSTART will manage $10 million in additional incentives in 2015 and 2016.

The California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) is unique in that unlike traditional rebate programs, the HVIP process is web-based, quick and simple: fleets suffer no lengthy application forms, proposals, or long waits for reimbursement. The ARB initiated HVIP in late 2009, and it has become the most significant program nationally that encourages fleet operators to purchase hybrid and electric trucks instead of conventional ones. CALSTART has been selected to administer each phase of the program since it began.

"We deeply value and appreciate the trust ARB has placed in us with this selection," noted John Boesel, President and CEO of CALSTART. "HVIP has been a highly successful partnership between the State, commercial fleets, CALSTART and the emerging industry to help speed clean truck and bus deployment," Boesel said.

HVIP incentives cut the incremental cost of hybrid and zero-emission heavy-duty trucks and buses to make fleet purchases of clean, efficient vehicles more affordable. This important incentive helps owners buy new technology when production volumes are still low. To date, more than 500 fleets have taken advantage of HVIP funding.

Since its inception, HVIP funding has totaled $75 million. The program's 2014-2015 $10 million in funding is comprised of $5 million from the State's legislature in support of the Air Quality Improvement Program (AQIP), established by the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007 (Assembly Bill 118), as well as $5 million from the Greenhouse Gas Reduction Fund, aimed at projects that reduce greenhouse gas emissions and provide low carbon transportation benefits to disadvantaged communities.

The HVIP model has worked so well in California that others have developed similar programs based on the same model. Both the State of New York and the City of Chicago now offer voucher incentive programs to spur the purchase of clean trucks and buses. CALSTART manages the programs for those jurisdictions as well.

About CALSTART

CALSTART and its 150 member companies are dedicated to expanding and supporting a clean transportation industry that cleans the air, creates jobs, reduces greenhouse gas emissions and secures our transportation energy future. CALSTART's member companies represent a broad range of clean transportation technologies, and the fleets that use them, including fuel providers, truck, bus and car makers and Fortune 500 companies. For further information visit www.calstart.org.

___________

REGULATORY AND POLICY ISSUE UPDATES

French fries Beautiful oil

CALIFORNIA AIR RESOURCES BOARD: CAP AND TRADE

See lead article above on Biofuels Initiative.

CALIFORNIA AIR RESOURCES BOARD (ARB): ADF RULEMAKING PROCESS
The adoption of the ADF regulation will be considered at the July 23rd meeting of the board of ARB. ADF rulemaking details and a link to CBA and NBB comments on the most recent proposed amendments are available here: http://www.arb.ca.gov/regact/2015/adf2015/adf2015.htm.

CALIFORNIA AIR RESOURCES BOARD (ARB): LOW CARBON FUEL STANDARD (LCFS)

The readoption of the LCFS regulation will be considered at the July 23rd meeting of the board of ARB. LCFS rulemaking details and a link to the latest comments from CBA and NBB are available here: http://www.arb.ca.gov/regact/2015/lcfs2015/lcfs2015.htm.

CALIFORNIA ENERGY COMMISSION (CEC): AB 118 Program (ARFVTP)

CEC has proposed Changes to Funding Program Restrictions in the Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP) regulations in the 3103 section (section 3103) of Title 20 of the California Code. CBA has submitted comments in support of the elimination of both the requirement to discount emissions credits generated by ARFVTP-funded projects and the requirement that projects that generate emissions credits are eligible for only partial funding. Members of the state's biodiesel industry have engaged with the agency in recent years detailing the economically damaging nature of the discounting requirement. Documents can be accessed here: http://energy.ca.gov/altfuels/2015-OIR-02/.

STATE WATER BOARD: UNDERGROUND STORAGE TANK ISSUES

See our Regulatory Matters webpage for information on compliance issues.

LEGISLATIVE UPDATE
See Greeting and articles above.

_______________________

FEDERAL ISSUES



Please contact the Washington office of the National Biodiesel Board (NBB) at 202-737-8801 for questions on these federal policy issues. Visit their Fueling Action webpage for more info.

TAX INCENTIVE

As reported here last month, NBB continues to support a long-term extension and changing the structure of the biodiesel tax incentive from a blender's credit to a producer's credit, including in the context of comments on tax reform to the Senate Finance Committee. However, it has been widely reported that Senate Majority Leader Mitch McConnell closed the door this month on the likelihood that the Senate will come to an agreement on major comprehensive tax-reform legislation this year.


RENEWABLE FUEL STANDARD: RVO

See lead article on RFS.

ARGENTINIAN IMPORTS

See lead article on RFS. Based on our industry's concern about growing volumes of imports from Argentina, which have been approved for RIN generation under RFS, our industry is asking the EPA to consider this fact when determining final RVO numbers for 2015 through 2017 for both the Biomass-based diesel and Advanced Biofuels categories.

CBA WELCOMES NEW MEMBERS

______ WE ARE HAPPY TO WELCOME THESE NEW MEMBERS THIS YEAR _____

Biogenic Energy

Corn Oil One

Krause & Nagy Environmental Solutions, LLP

Starfuels

Sylvatex

______ 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 several membership levels with the following annual dues.

BOARD MEMBERSHIP (Full-voting)

Producer Board Member

* Production greater than 8 million gallons per year: $10,000

* Production less than 8 million gallons per year: $5,000

Marketer Board Member

* Sales greater than 8 million gallons per year: $10,000

* Sales less than 8 million gallons per year: $5,000

Other Board Member: $5,000

Applicants for CBA's Board of Directors must print and fill out the Voting Membership Application from our Join Us webpage and email or mail it to Celia DuBose at the address listed there.

NOTE: Dues amounts apply whether your business is based inside or outside of California and regardless of where your fuel is sold.

Non-voting memberships are as follows:

BUSINESS MEMBERSHIP:

* Gold: $3,000

* Silver: $2,000

* Bronze: $1,000

INDIVIDUAL MEMBERSHIP (includes nonprofit organizations): $100

* Students/veterans: $25

Membership benefits include:

* Your company's logo, link, and description on our Members webpage (Business membership and above).

* Participation in CBA's in-person member meetings.

* Participation in policy discussions and legislative/regulatory visits in Sacramento.

* Internal email communications on important industry issues as they arise.

* A discount on CBA events.

_______ SIGN UP FOR THIS NEWSLETTER _____

Anyone can sign up to get this CBA monthly newsletter. Visit our Home page and add your email address (on the left -- scroll down).

_______ VIEW PAST NEWSLETTERS AND EMAIL ALERTS _____

Just click on the "View CBA Email Newsletter Archive" button on our Home page (scroll down on the left).

Thank you for your commitment to biodiesel and for your time and effort on behalf of our industry. I look forward to continuing to work with you.

Best,

Celia DuBose

Executive Director

California Biodiesel Alliance