Viewpoint: LCFS plans could grow biofuels market

Market: Biofuels, Emissions, Oil products
28/12/20

Next year could prove to be a transformational period for new clean fuels programs, with lawmakers and regulators poised to take up low-carbon fuel standard (LCFS) proposals across North America.

Recent growth in renewable fuel sales has been largely concentrated in California, where producers can layer the value of federal renewable identification numbers (RINs) on top of lucrative California LCFS credits, which have averaged $200/metric tonne this year for spot delivery.

The California experience has provided a model for other jurisdictions interested in mandating use of less carbon-intensive fuels such as renewable diesel, biodiesel, ethanol and renewable natural gas.

Renewable fuel producers are closely watching the development of Canada's Clean Fuel Standard, because it could lead to a significant increase in biofuel blending over the next decade. The program, which will cover fuels such as gasoline, diesel and fuel oil, is scheduled to be rolled out in 2022. The environment ministry recently issued its proposed regulations, and next year will be devoted to finalizing the program's elements. US renewable diesel producers view Canada as a new target market for their fuel.

In Washington state, prospects for an LCFS program appear to have improved following the 3 November election, according to state representative Joe Fitzgibbon (D), who has sponsored LCFS bills in each of the past two legislative sessions.

His proposal, which governor Jay Inslee (D) has made part of his 2021 climate policy agenda, would require a 10pc cut in the carbon intensity of transportation fuels by 2028 and 20pc by 2035. While Fitzgibbon's previous bills have come up short in the state legislature, supporters believe 2021 is the year that it will make it across the finish line. With a large refining complex in Washington state, biofuels producers are eyeing a large source of demand if that clean fuels program becomes law in the spring session.

New York lawmakers could take action on an LCFS as part of the state budget process, which will begin in January and must be finished by 1 April.

"We hope we can get legislation through that vehicle, which would make it conceivable that regulations could be in place by the end of 2021, going into effect in 2022," New York League of Conservation Voters president Julie Tighe said at Argus' biofuel conference in November. "We are going to push for the state to move quickly and aggressively."

Tighe is leading a coalition of environmental groups and biofuel producers pushing for lawmakers to back an LCFS. The policy could also get a boost from a separate process to develop a plan for implementing major climate legislation the state enacted last year.

Other states, nearly on a monthly basis, have announced plans to explore the use of an LCFS. There is strong interest in the Midwest — particularly Illinois, Minnesota and Wisconsin. A task force advising Wisconsin governor Tony Evers (D) recently recommended that the state consider developing a LCFS proposal as soon as next summer as part of a broader plan to address climate change. The state, along with Minnesota and Illinois, have embraced the work done by the Midwestern Clean Fuels Policy Initiative.

Colorado completed an LCFS feasibility study this year, while Nevada officials earlier this month said they are considering an LCFS to help reach the state's climate policy goals.

Biofuel producers have already benefited from the trio of LCFS mandates on the Pacific coast — California, Oregon and British Columbia. All of these programs are poised for further growth. British Columbia over the summer extended its LCFS to 2030 with a 20pc carbon intensity reduction mandate. The Oregon Department of Environmental Quality next year plans to begin work on a Clean Fuels Program extension requested by governor Kate Brown (D) that would set a 25pc by 2035 mandate. And California – the largest renewable transportation fuels market in the US – will tighten the carbon intensity targets in its LCFS program to 8.75pc in 2021, up from 7.5pc this year.

These developments signal much greater demand for renewable fuels and greater compliance obligations for fossil fuel producers.

By Jessica Dell

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28/03/25

ISCC aware EU mulling certification recognition: Update

Adds comment from the European Commission London, 28 March (Argus) — The ISCC, an international certification system for sustainability, said today that it is aware of discussions in an EU committee about future recognition of its certification for waste-based biofuels. It said there is no legal basis for any planned measures. Industry participants said yesterday that the EU Committee on Sustainability of Biofuels, Bioliquids, and Biomass Fuels is drafting implementing regulations that would include a two-and-a-half year pause to obligatory acceptance of ISCC EU certification for waste-based biofuels. "This action is said to be subject to further legal scrutiny and will need approval by member states," the ISCC said. Currently, member states accept EU-recognised voluntary scheme certification as proof that fuel or feedstocks are compliant with the bloc's Renewable Energy Directive (RED) sustainability criteria. Market participants told Argus that discussions have centred around giving individual countries more choice. "Other voluntary schemes would not be able to fill the gap. The measure would be a severe blow to the entire market for waste-based biofuels and would seriously jeopardise the ability of the obligated parties to comply with blending mandates," the ISCC said. The ISCC has been singled out in a discriminatory way and has supported European Commission and member states' investigations into alleged fraud, it said. "We are more than surprised by this step […and] are unable to see the rationale of the planned measure, which seems ad hoc and baseless," it added. Secretary-general of the European Biodiesel Board (EBB) Xavier Noyon told Argus that, if confirmed, the suspension would affect thousands of operators. "At this time, member states are refusing to comment, and we call on the commission to urgently clarify any decisions of this nature that are on the table," he said. The EBB published its own proposed revision to the RED implementing legislation last month, which expanded the supervisory power of member states over voluntary schemes and certification bodies. The European Commission confirmed that the committee met on 26 March to discuss sustainable certification, promotion of biofuels, avoidance of double counting, and alleged fraud. "We are still working on our examination of this alleged fraud in biodiesel imports from China," said commission energy spokesperson Anna-Kaisa Itkonen. But the commission has not taken any decision yet and cannot allude to "possible" scenarios, she said. By John Houghton-Brown, Simone Burgin and Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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UK EAC to explore airport expansion, net zero conflict

28/03/25

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28/03/25

UK EAC to explore airport expansion, net zero conflict

London, 28 March (Argus) — UK parliament's cross-party environmental audit committee (EAC) has begun an inquiry into whether the country's airport capacity expansion could be achieved in line with its climate and environment targets. "The aviation sector is a major contributor to the UK's carbon emissions, and on the face of it, any expansion in the sector will make net zero even more elusive," EAC chair Toby Perkins said. Any expansions must meet strict climate and environment commitments, the UK government has said. The government in January expressed support for a third runway at London's Heathrow airport — the country's largest. UK transport minister Heidi Alexander said in February that she was "minded to approve" an expansion at London's Gatwick airport, ahead of a final decision in October. The expansion would involve Gatwick making its northern runway operational. It is currently only used as a back-up option. The government is also "contemplating decisions on airport expansion projects at London Luton… and on the reopening of Doncaster Sheffield," Perkins said. "It is possible — but very difficult — for the airport expansion programme to be consistent with environmental goals," Perkins said. "We look forward to exploring how the government believes this can be achieved." The UK has a legally-binding target of net zero emissions by 2050. Its carbon budgets — a cap on emissions over a certain period — are also legally binding. The government must this year set levels for the UK's seventh carbon budget , which will cover the period 2038-42. The committee has invited written submissions on the possible airport expansions and net zero, with a deadline of 24 April. It will report in the autumn. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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ISCC aware of EU talks on certification recognition

28/03/25

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28/03/25

ISCC aware of EU talks on certification recognition

London, 28 March (Argus) — The ISCC, an international certification system for sustainability, said today that it is aware of discussions in an EU committee about future recognition of its certification for waste-based biofuels. It said there is no legal basis for any planned measures. Industry participants said yesterday that the EU Committee on Sustainability of Biofuels, Bioliquids, and Biomass Fuels is drafting implementing regulations that would include a two-and-a-half year pause to obligatory acceptance of ISCC EU certification for waste-based biofuels. "This action is said to be subject to further legal scrutiny and will need approval by member states," the ISCC said. Currently, member states accept EU-recognised voluntary scheme certification as proof that fuel or feedstocks are compliant with the bloc's Renewable Energy Directive (RED) sustainability criteria. There has been no official statement from the European Commission but market participants told Argus that discussions have centred around giving individual countries more choice. "Other voluntary schemes would not be able to fill the gap. The measure would be a severe blow to the entire market for waste-based biofuels and would seriously jeopardise the ability of the obligated parties to comply with blending mandates," the ISCC said. The ISCC has been singled out in a discriminatory way and has supported European Commission and member states' investigations into alleged fraud, it said. "We are more than surprised by this step […and] are unable to see the rationale of the planned measure, which seems ad hoc and baseless," it added. Secretary-general of the European Biodiesel Board (EBB) Xavier Noyon told Argus that, if confirmed, the suspension would affect thousands of operators. "At this time, member states are refusing to comment, and we call on the commission to urgently clarify any decisions of this nature that are on the table," he said. The EBB published its own proposed revision to the RED implementing legislation last month, which expanded the supervisory power of member states over voluntary schemes and certification bodies. By John Houghton-Brown and Simone Burgin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Australia’s Boral set to stay below emissions baseline

28/03/25

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28/03/25

Australia’s Boral set to stay below emissions baseline

Sydney, 28 March (Argus) — Australian building materials firm Boral expects to remain below its emissions baseline under the safeguard mechanism, it said today as it announced further decarbonisation investments for its flagship cement manufacturing operations. Boral is "on track" to remain below the baseline safeguard mechanism requirements, chief executive officer Vik Bansal said on 28 March. This is because of the new kiln feed optimisation project and previous investments in decarbonisation projects, he noted. Boral's Berrima cement plant in New South Wales (NSW) state will invest in a new cement kiln infrastructure project that will reduce the facility's scope 1 emissions by up to 100,000 t/yr of CO2 equivalent (CO2e) from 2028, it said on 28 March. The project was awarded A$24.5mn ($15.4mn) under the Australian federal government's A$1.9bn Powering the Regions Fund (PRF). Grants will come from the PRF's A$600mn Safeguard Transformation Stream, aimed at decarbonisation projects at heavy industry facilities covered under the safeguard mechanism. The Berrima plant — Boral's only facility under the mechanism — reported 979,872t of CO2e in the July 2022-June 2023 compliance year, below its baseline of 1.075mn t of CO2e. The facility will be eligible to receive safeguard mechanism credits (SMCs) from the July 2023-June 2024 year onwards for any emissions below the baseline. The company also upgraded its carbon-reduction technology at Berrima last year, reducing fuel-based emissions through the use of alternative fuels at the kiln. The new kiln feed optimisation project will lead to a reduction in the so-called process emissions — the largest and hardest-to-abate emissions source in cement manufacturing. Approximately 35pc of Berrima's scope 1 emissions originate from fuel combustion, while the remaining 65pc are process emissions, according to the company. Australia's Clean Energy Regulator (CER) will publish 2023-24 safeguard data by 15 April . By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Oil, biofuel groups meet to align on RFS policy

27/03/25

News

27/03/25

Oil, biofuel groups meet to align on RFS policy

New York, 27 March (Argus) — Energy and farm groups met last week at the American Petroleum Institute to negotiate a joint request for President Donald Trump's administration as it develops new biofuel blend mandates, according to five people familiar with the matter. The private meeting involved groups from across the supply chain, including representatives of feedstock suppliers, biofuel producers, fuel marketers, and oil refiners with Renewable Fuel Standard (RFS) obligations. The groups coordinated earlier this year around a letter to the Trump administration on the need to update the RFS and are now seeking agreement on other program elements. According to the people familiar with the matter, the groups agree on pushing the Environmental Protection Agency (EPA) to set higher blend mandates under the program's D4 biomass-based diesel and D5 advanced biofuel categories. Groups support slightly different volume targets that are nevertheless all in "a rounding number of each other" in the D4 category, according to one lobbyist. But there is still disagreement about whether to ramp up mandates quickly in 2026 or provide a longer runway to higher volumes. Clean Fuels Alliance America and farm groups have publicly supported a biomass-based diesel mandate of at least 5.25bn USG starting next year, which could justify a broader advanced biofuel mandate above 9bn USG, according to the people familiar, though others worry about fuel cost impacts if mandates spike so quickly. The current mandate for 2025 is 7.33bn USG in the advanced biofuels category, including a 3.35bn USG mandate for the biomass-based diesel subcategory, so the volumes being pushed for future years would be a steep increase. The RFS, highly influential for fuel and commodity crop prices, requires oil refiners and importers to blend annual amounts of biofuels into the conventional fuel supply or buy Renewable Identification Number (RIN) credits from those who do. The idea behind the groups' coordination is that the Trump administration might more quickly finalize RFS updates if lobbyists with a history of sparring over biofuel policy can articulate a shared vision of the program's future. One person familiar said the effort comes after the Trump administration directed industry to align biofuel policy goals, though others said they understood the coordination as largely voluntary. EPA did not provide comment. There is less agreement around the program's D6 conventional biofuel category, which is mostly met by corn ethanol. Oil groups have in the past criticized EPA for setting the implied D6 mandate at 15bn USG, above the amount of ethanol that can feasibly be blended into gasoline, though excess biofuels from lower-carbon categories can be used to meet conventional obligations. Ethanol interests support setting the D6 mandate even higher than 15bn USG, which could be a tough sell. The discussions to date have not involved targets for D3 cellulosic biofuels, a relatively small part of the program. A proposal to lower 2024 volumes has hurt D3 credit prices, signaling that future mandates are effectively optional, according to frustrated biogas executives , and has reduced the salience of the issue for other groups. A proposal from President Joe Biden's administration to create a new category called "eRINs" to credit biogas used to power electric vehicles has similarly not come up. "We're not expecting to see any attempt to include eRINs in this next [RFS] proposal," Renewable Fuels Association president Geoff Cooper told Argus earlier this month. The meeting last week was largely oriented around the RFS, though a National Association of Truck Stop Operators representative raised the issue of tax policy too. The group has been frustrated by the expiration of a long-running blenders credit and the introduction this year of a less generous credit for refiners, which is only partially implemented and has spurred a sharp decline in biomass-based diesel production. But others involved in negotiations, while they acknowledge tax uncertainty could hurt their case for strong mandates, are trying to avoid contentious topics and focus mostly on volumes. Republican lawmakers are separately weighing whether to keep, repeal, or adjust that credit to help out fuel from domestic crops, and there is no telling how long that debate might take to resolve. Another thorny issue discussed at the meeting is RFS exemptions for small refineries. Biofuel producers strongly oppose such waivers and say that exempted volumes should at least be reallocated among facilities that still have obligations. Oil groups have their own views, though it is unclear how involved the American Fuel and Petrochemical Manufacturers — which represents some small refiners and has generally been more critical of the RFS than the American Petroleum Institute — are in discussions. EPA is aiming to finalize new volume mandates by the end of this year , people familiar with the administration's thinking have said, though timing for a proposal is still unclear. Future conversations among energy and farm groups to solidify points of unity — and strategize around how to downplay disagreements — are likely, lobbyists said. RIN prices rally Speculation over the trajectory of the RFS, and the potential for higher future volumes, supported soybean oil futures and widened the bean oil-heating oil (BOHO) spread. The BOHO spread maintains a positive correlation with D4 RIN prices as a widening value raises demand for D4 credits as biofuel producers look to offset higher production costs. Thursday's session ended with current-year ethanol D6 credits valued between 79¢/RIN and 82¢/RIN, while their D4 counterparts held at a premium and closed with a range of 84¢/RIN to 89¢/RIN. These gains each measured more than 5.5pc growth relative to Wednesday's values. By Cole Martin and Matthew Cope Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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