Industry News

California Biofuel Output Could Triple with Enough Funding Industry

The volume of biofuel produced within California could more than triple by 2019 if there is sufficient funding from the state government, the industry said Monday.

A group of biodiesel, ethanol and biomethane trade organizations and producers called on California lawmakers to allocate $210 million from the governor's Greenhouse Gas Reduction fund to provide incentives in this year's budget for in-state production of low-carbon biofuels.

In a statement, the industry said that to meet Gov. Jerry Brown's (D) environmental goals, more than 7 billion gallons of low carbon biofuel will be needed annually in California by 2030. While a large portion of California's low carbon fuels now are imported from out of state and abroad, the groups said that if proper financial support is provided, California biofuels production could increase from 250 million gal/yr in 2014 to 906 million gal/yr in 2019.

"California has adopted some of the most forward-thinking policies in the nation to combat climate change -- including AB 32, SB 535, the Low Carbon Fuel Standard, and SB 350 -- and it is up to state legislators to encourage and promote in-state biofuel production to achieve the Governor's goals," Russ Teall, president of the California Biodiesel Alliance, said. "Investing in this initiative helps improve the environment, while creating jobs and providing energy security."

"The biofuels we produce lower the carbon content and give consumers more choices," Pacific Ethanol CEO Neil Koehler added. "State investment needs to be prioritized for in-state production of biofuels that will pay back with local jobs, tax revenue and community growth."

The groups said a $210 million allocation of AB 32 cap and trade auction proceeds from the state budget's Greenhouse Gas Reduction Fund would create

24,750 direct and indirect jobs in the state, reduce greenhouse gas emissions by nearly 6,000,000 metric tons, spur economic development of $11.5 billion, displace 714 million gal/yr of fossil-based transportation fuels, generate fuel tax revenues of $230 million and bring in other state and local tax revenues of $408 million.

"The transportation sector is responsible for nearly 40% of all carbon-related emissions in California. Methane released from agricultural and food processing facilities, wastewater treatment plants and landfills is far more potent than carbon as a greenhouse gas emission," said Johannes Escudero, CEO of the Coalition for Renewable Natural Gas. "California has an opportunity to reduce these emissions by investing GGRF funds in the development of biofuels, including in-state biomethane production facilities -- projects that capture otherwise flared or fugitive methane from organic waste streams to produce the lowest carbon intensity transportation fuel available."

Legislators will determine how much money to allocate toward in-state biofuel production by June 15, at which point the allocation will be included in the state's budget that will be sent to the governor.

--Jeff Barber,

Copyright, Oil Price Information Service