The Biobased and Renewable Products Advocacy Group (BRAG) helps members develop and bring to market their innovative biobased and renewable chemical products through insightful policy and regulatory advocacy. BRAG is managed by B&C® Consortia Management, L.L.C., an affiliate of Bergeson & Campbell, P.C.


 

By Kathleen M. Roberts

On June 2, 2017, Neste, a member of the Biobased and Renewable Products Advocacy Group (BRAG®), released a statement in response to the decision by President Trump to withdraw the U.S from the Paris Agreement.  According to Neste, the U.S. withdrawal is “unfortunate” and “a saddening turn for the international battle against climate change.”  The decision, however, will not signal the downfall of the Agreement, which has been ratified by 147 of the 197 countries that signed it.  The statement highlights the fact that no changes have been made to the Renewable Fuel Standard, which has set increasing obligations for renewable fuels for 2017 and 2018, nor to the California Low Carbon Fuel Standard.  Neste aims to continue to make renewable products available to U.S. states, cities, and businesses to support their ambitious targets for reducing emissions.


 

By Lauren M. Graham, Ph.D.

On March 23, 2017, the California Environmental Protection Agency’s Air Resources Board (ARB) announced the release of new carbon intensity pathways for fuels certified under the low carbon fuel standard (LCFS) using the CA-GREET 2.0 model.  Of the 18 pathways approved in March, eight are first generation biodiesel carbon intensity pathways and four are second generation renewable diesel carbon intensity pathways.  A pathway for biodiesel produced from used cooking oil has been provisionally certified, as well.  The approved pathways can be used for credit reporting purposes beginning with reports for Q1 2017.  The LCFS regulation aims to reduce the carbon intensity of fuels sold in California by 10 percent by 2020 in line with the California Health and Safety Code mandate to reduce greenhouse gases in California.


 

On June 30, 2014, the U.S. Supreme Court announced that it would not review the constitutionality of the California Low Carbon Fuel Standard (LCFS). This decision is largely viewed as a win for the California Air Resources Board, the governmental body that regulates the LCFS, and supporters of the law.

On March 20, 2014, Growth Energy and the Renewable Fuels Association (RFA), which represent the ethanol industry, and the American Fuel and Petrochemical Manufacturers (AFPM), along with the American Trucking Association and the Consumer Energy Alliance, filed petitions for writ of certiorari with the U.S. Supreme Court to make a final determination on the constitutionality of the LCFS.

The groups challenged the January 2014 decision of the U.S. Court of Appeals for the Ninth Circuit (the Ninth Circuit) to deny rehearing en banc in Rocky Mountain Farmer's Union v. Corey. On September 18, 2013, the Ninth Circuit issued its opinion in Rocky Mountain Farmer's Union v. Corey reversing a lower court opinion that found that the LCFS violated the dormant Commerce Clause of the U.S. Constitution by discriminating against ethanol produced outside of California. The LCFS assigns higher carbon intensity values to ethanol produced in the Midwest than in California.


 

On March 20, 2014, Growth Energy and the Renewable Fuels Association (RFA), which represent the ethanol industry, and the American Fuel and Petrochemical Manufacturers (AFPM), along with the American Trucking Association and the Consumer Energy Alliance, filed petitions for writ of certiorari with the U.S. Supreme Court to make a final determination on the constitutionality of the California Low Carbon Fuel Standard (LCFS).


The groups are challenging the January 2014 decision of the U.S. Court of Appeals for the Ninth Circuit (the Ninth Circuit) to deny rehearing en banc in Rocky Mountain Farmer's Union v. Corey. On September 18, 2013, the Ninth Circuit issued its opinion in Rocky Mountain Farmer's Union v. Corey reversing a lower court opinion which found that the LCFS violated the dormant Commerce Clause of the U.S. Constitution by discriminating against ethanol produced outside of California. The LCFS assigns higher carbon intensity values to ethanol produced in the Midwest than in California. The press releases of Growth Energy and RFA (joint) and AFPM are available here and here.


One of the goals of the LCFS is to reduce the carbon content of transportation fuel by ten percent by 2020. It is significant to the biofuels industry, especially since several other states are considering similar programs and look to California's LCFS as an example.
 


 

On September 18, 2013, the 9th Circuit Court of Appeals reversed a December 2011 district court ruling and held that California's Low Carbon Fuel Standard (LCFS) does not violate the Dormant Commerce Clause of the U.S. Constitution on its face. The district court had sided with groups from the oil and gas, ethanol, and trucking industries and found that the LCFS violated the Dormant Commerce Clause because the statute gave higher carbon intensity values to out-of-state, Midwest, ethanol, putting that fuel at a disadvantage in California. At the time of the 2011 decision, the district court had also issued a preliminary injunction preventing the California Air Resources Board (CARB) from enforcing the LCFS.


In its decision this week, the appeals court held that the LCFS does not violate the Dormant Commerce Clause on its face, and it remanded to the district court whether the statute violates the clause "in purpose or in practical effect." The appeals court also vacated the preliminary injunction.


It has been reported that the ethanol industry is looking at their legal options in light of the appeals court decision.
 


 

On August 8, 2013, the Fifth District Court of Appeals denied a petition from the California Air Resources Board (CARB) for a rehearing of the case in which the court found on July 15, 2013, that CARB had improperly approved California's Low Carbon Fuel Standard (LCFS) in violation of administrative procedures (more information is available online). The July 15 decision stands and while CARB may continue to implement the LCFS, it must hold a new 45-day public comment period to receive input on the LCFS regulations, including CARB's calculation of indirect land use from the increased use of biofuels.