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Earlier this week, the California Air Resources Board (CARB) released the latest proposed amendments to the Low Carbon Fuel Standard (LCFS). The central revisions include a 9 percent reduction in fuel carbon intensity in 2025 and revisions in carbon intensity to smooth out the transition from the immediate reduction in 2025 to the 30 percent CI reduction by 2030. As expected, the previously proposed sustainability requirements “that crop and forest-based feedstocks not be sourced on land that was forested after 2008” are still in the proposal, though now they cover “biomass,” not just “crop and forest-based feedstocks.” Its applicability is expanded “to include protections for other carbon-rich and biodiverse ecosystems (e.g., native grasslands, wetlands) by requiring that all biomass used in fuel pathways be sourced from land that was cleared or cultivated prior to 2008” according to the notice.

Sustainability Certification Requirements

All biomass, “from the point of origin to the first gathering point” used in pathways—except “Used cooking oil, animal fats, fish oil, yellow grease, distiller's corn oil, distiller's sorghum oil, brown grease, and other fats/oils/greases that are the non-primary products of commercial or industrial processes”—fall under a continuous third-party sustainability certification from an approved system.

As CARB reviews other systems, systems recognized by the EU’s Renewable Energy Directive (EU RED) 2018/2001 as of December 31, 2025 will be approved.

Included in the sustainability requirements are the required “Best Environmental Management Practices”:

1. Maintain or enhance biodiversity habitat on agricultural or forested lands;
2. Enhance soil fertility and avoid erosion or compaction;
3. Apply fertilizers in a manner that minimizes runoff, and soil and water contamination;
4. Reduce unsustainable water use, and minimize diffuse and localized pollution from chemical residues, fertilizers, soil erosion, or other sources of ground and surface water contamination.

The certification of sustainability requirements will follow a tiered approach:

• Upon effective date of amendments: new pathway applications must include attestation and coordinates of land plot boundaries.
• 2026: Existing pathways must include attestation and coordinates of land plot boundaries.
• 2028: Existing pathways and new pathway applications must meet sustainability requirements and maintain third-party sustainability certification.
  • 1. The chain-of-custody evidence for sustainable biomass must meet requirements of section 95488.8(g)(1)(B)1. through 3.; - Note: This refers to
  • 2. Certificates identifying the exact volume, mass or other measurement of biomass must accompany the sustainable biomass from Feedstock First Gathering Point to the fuel producer.
• 2031: Existing certified pathways and new pathway applications “must meet the full sustainability requirements for biomass under section 95488.9(g)(1)(A) and (B)) and maintain continuous third-party sustainability certification under an Executive Officer approved certification system.
  • 1. The chain-of-custody evidence for sustainable biomass must meet requirements of section 95488.8(g)(1)(B)1. through 3;
  • 2. Certificates identifying the exact volume, mass or other measurement of biomass must accompany the sustainable biomass from Feedstock First Gathering Point to the fuel producer.”

20% Cap on Soybean and Canola Oil Included

“Biomass-based diesel produced from soybean oil and canola oil is eligible for LCFS credits for up to twenty percent combined of total biomass-based diesel annual production reporting, by company. Any reported quantities of biomass-based diesel produced from soybean oil or canola oil in excess of twenty percent on a company-wide basis will be assigned a carbon intensity equivalent to the carbon intensity benchmark shown in Table 2 in Section 95484(e) for the applicable data reporting year, or the certified carbon intensity for the associated fuel pathway – whichever is greater. For companies with biomass-based diesel pathways certified prior to the effective date of the regulation and for which the percentage of biomass-based diesel produced from soybean oil or canola oil was greater than 20 percent of combined reported biodiesel and renewable diesel quantities for 2023 LCFS reporting, this provision takes effect beginning January 1, 2028.”

Land Use Change Values

Corn ethanol’s LUC value of 19.8 is unchanged. However, the new proposal gives CARB the authority to revise LUC values upward “based on the best available empirical data, including but not limited to satellite-based remote sensing data for land cover monitoring, crop yields, and emission factors from the AEZ-EF model or carbon stock datasets.” CARB has indicated the potential to lower LUC values based on the best available data will not be considered.

Growth Energy will continue to engage CARB on this issue and is drafting comments for the 15-day comment period, which are due August 27th, 2024, for anyone interested in submitting comments.

For more information, please contact Senior Vice President of Regulatory Affairs Chris Bliley.

LATEST EIA DATA

Last week, domestic ethanol demand was 14.2 BGY, up 0.9% compared to a week ago. The EIA-reported gas demand was up 0.9% from last week, at 138.7 BGY. The 4-week average ethanol and gas demand are 14.4 and 140.7 BGY (+2.2% YoY).

Ethanol production was 16.4 BGY last week, up 0.5% versus the week before, and 2.9% more than the 4-week average in 2019. Midwest production was up 0.6% (+1.8 MG) versus a week ago, and average production in the other regions was down 1.7% (-0.3 MG). Capacity utilization of plants online was 91.5% overall, 92.7% in the Midwest, and 75.2% on average, elsewhere, excluding 1,027 MGY of capacity shutdown at 22 ethanol plants for other than maintenance. On an installed capacity basis, utilization was 86.6% overall, 91.0% in the Midwest and 46.8% in the other regions.

Exports were an estimated 31.6 MG last week based on 140 MG of exports forecast for August.  The EIA reported no ethanol imports last week.

Overall inventory was up 7.0 MG last week. EIA-counted stocks decreased 17.3 MG, and regional changes were: East (-13 MG), Gulf (+21 MG) and West (-6) Coasts and the Midwest (-20 MG). In-transit inventory increased 24.3 MG.

Based on the total inventory of 1,575 MG on Aug 9th and the 4-week avg. domestic demand, there were 39.6 days of supply, down 0.1 days versus a week ago. Including the 4-week avg. of net exports, there were 35.4 days of supply, unchanged versus a week ago.

For more information, please contact Jake Comer.

WORKING FOR YOU

UPCOMING EVENTS

Growth Energy Biofuels Summit

Washington, DC

September 9-12, 2024

Learn More

IN GOVERNMENT AFFAIRS

Growth Energy's Katie Webster (far right) with Illinois Rep. Mike Bost (second from right).

Growth Energy Director of Government Relations Katie Webster joined Congressman Mike Bost (R-Ill.) for a tour of LincolnLand Agri-Energy at their Palestine, Ill. plant. Before the tour, Webster provided Rep. Bost updates on E15 legislation, our Section 45Z Clean Fuel Production tax credit extension efforts, and Class VI permit delays.

Summer driving season is fully underway, and we want to remind you to fill up with lower-cost, lower-carbon E15 (Unleaded 88) at the pump as you hit the road! 

We must continue to make our argument for year-round E15 to the EPA, on Capitol Hill, and in state legislatures around the country. We've found that a picture really is worth a thousand words. Next time you fill up with E15, take a picture (like the one above) and share it with us! We'll put your photos to good use telling the story of how E15 saves drivers money. Email them to hcullen@growthenergy.org.   

For more information, please contact Vice President of Government Affairs John Fuher.

IN REGULATORY AFFAIRS

Growth Energy’s Director of State Government Affairs Dallas Gerber joined POET’s Doug Berven and Indiana Ethanol Producers Association’s Tim Phelps this week in speaking to the Indiana Legislature’s Rural Caucus. The panel discussed biofuels and the bioeconomy and its impact on Indiana’s economy. Gerber and Berven highlighted opportunities such as carbon management and fuels with higher blends of bioethanol that can benefit Indiana farmers and the state’s rural economy. Additionally, the panel discussed new market opportunities for bioethanol like sustainable aviation fuel (SAF) and how support for biofuels helps expands access to those markets.

For more information, please contact Senior Vice President of Regulatory Affairs Chris Bliley.

IN MEMBERSHIP

As a reminder, the Iowa Utilities Commission (IUC) will host public informational meetings in 23 counties across the state regarding the expansion of the carbon pipeline to be built by Growth Energy Member Summit Carbon Solutions. The meetings are an important opportunity for residents to learn more about the project, the benefits of carbon capture, and the steps Summit is taking to ensure safety and environmental protection. 

Here are the first upcoming meetings. To view the full slate of meeting dates, click here.

Date: August 26, 2024 at 6 p.m. 

Location: Corning Opera House Cultural Center, 800 Davis Ave., Corning IA 50841

Docket: HLP-2024-0006 

Date: August 27, 2024 at 12 p.m.

Location: Red Coach Inn, 1200 Senate Ave., Red Oak 51566

Docket: HLP-2024-0006 

Date: August 27, 2024 at 6 p.m.

Location: Guthrie County Activity Center, 209 State St., Guthrie Center, IA 50115

Docket: HLP-2024-0004

Summit is encouraging any interested parties to attend and participate in these informative sessions. If you are interested in speaking on behalf of the project, please reach out to Kelly Manning at kmanning@growthenergy.org.  

For more information, please contact Senior Vice President of Development Kelly Manning.

IN OUR ASSOCIATION

Next week, Growth Energy CEO Emily Skor will speak on a panel at the Conservative Energy Network's (CEN) Annual National Conservative Energy Summit in Houston, Tex. This summit brings together an unparalleled group of conservative clean energy advocates, policy experts, state & federal leaders, and technical specialists from across the nation.

Skor will be sitting on a panel entitled "Incentivizing Innovation: The Role of Tax Credits in Sustainable Aviation Fuels," alongside Neil Hansen, SVP of Global Energy Products at Exxon/Mobil.

In case you missed it, Growth Energy CEO Emily Skor's Open Mic podcast interview with Agri-Pulse's Jeff Nalley is available to listen to here. Skor discusses the U.S. Environmental Protection Agency's (EPA) delay in issuing the 2026 Renewable Volume Obligation (RVO), updates on the 45Z Clean Fuel Production credit, and more. 

For more information, please contact Senior Vice President of Development Kelly Manning.

Growth Energy is the leading voice of America’s biofuel industry, delivering a new generation of plant-based energy and climate solutions.

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