CARB’s Biofuel Changes Raise Concern

The California Air Resources Board (CARB) is proposing to limit the use of U.S.-made canola- and soy-based biodiesel and renewable diesel in an effort to promote electric vehicles and reduce overall diesel demand. This plan, which includes a 20% cap on renewable diesel credits from these sources, is raising concerns among American agriculture groups and senators from farming states. They argue that this could lead to increased reliance on foreign imports of used cooking oil (UCO) from questionable sources, with significant imports already being reported from China. The changes, intended to take effect in January 2028, seek to reduce carbon intensity in transportation fuels. However, critics like Tom Hance from the U.S. Canola Association emphasize the risks associated with the reliability of imported feedstocks compared to domestically sourced biofuels. Concerns are also being raised about potential environmental issues, such as blending UCO with palm oil linked to deforestation in Southeast Asia, which would not meet California's environmental standards. Several U.S. senators have voiced their alarm regarding the implications of this policy, particularly its potential to harm domestic biofuel producers and disrupt the U.S. agriculture sector. They highlight the trend of escalating UCO imports, which have surged from under 200 million pounds in 2020 to over 3 billion pounds this year. This shift is seen as an exploitation of tax incentives that could compromise the integrity of the renewable fuels market. From a transportation standpoint, the move may hinder efforts to decarbonize heavy-duty transportation, and it could lead to higher fuel prices due to compliance costs being passed on to consumers. The notion of electrifying the trucking industry is viewed skeptically, as many believe biodiesel and renewable diesel made from domestic crops remain the most feasible and effective way to ensure lower emissions in the sector. The proposed regulations could destabilize an already complex market and create a challenging environment for U.S. farmers committed to sustainable energy practices. Kevin Clark from Cox Automotive highlights the transformative potential of dynamic parts management in fleet services, emphasizing efficiency improvements. Meanwhile, U.S. senators express concerns regarding the import of used cooking oil (UCO), which is perceived to receive favorable carbon intensity scores compared to domestically produced feedstocks, unfairly disadvantaging U.S. agriculture. This situation is driven by increased UCO demand due to stringent emissions regulations in states like California, Oregon, and Washington. California's Low Carbon Fuel Standard (LCFS) aims to progressively reduce the carbon intensity of transportation fuels, but proposed amendments could impose significant restrictions on vegetable oil feedstocks, critical for decarbonization in the heavy-duty transportation sector. Critics argue these regulations may destabilize the renewable fuels market nationally and inadvertently raise fuel prices for consumers. Concerns are also raised about the blending of imported UCO with palm oil linked to deforestation, which falls outside federal renewable fuel standards. As an expert in transportation, it is evident that while the intent behind these regulations is to promote cleaner fuel alternatives, the execution can lead to unintended economic consequences. Balancing environmental goals with sustainable practices in agriculture and energy production will require rigorous assessments and possibly a reevaluation of current policies to ensure that they support domestic producers and maintain fair competition in the renewable fuels market.