OPIS Biofuels Headlines

April 26, 2016
Some Ethanol Producers Unhappy With CARB's New CI Numbers

A number of ethanol producers selling into California are unhappy with their revised carbon intensity (CI) scores issued Friday by the California Air Resources Board (CARB), believing them to be too high, and some may opt to reject the agency's assigned values and petition for lower numbers, market sources said Monday.

CARB late Friday issued the revised CI scores to ethanol producers and set a May 3 deadline for applicants to accept or reject them.

Friday's announcement comes after the agency in March said it would delay releasing the new ethanol CI scores to allow it to incorporate into the Low Carbon Fuel Standard (LCFS) regulation a "corrected version" of the CA-GREET 2.0 model used to calculate estimated direct life-cycle emissions from the production, transport and use of transportation fuels. CARB at the time said the changes would fix "a few broken links and other similar non-substantive errors" in the GREET model.

The agency in September said it would revisit all existing ethanol CIs using the latest version of the GREET model, which supplants the previous model, known as CA-GREET 1.8. The LCFS is designed to reduce the CI of transportation fuels in the state 10% by 2020.

Although CARB has not made public any of the new CIs, market sources believed the use of the updated GREET model would result in a downward revision to the carbon scores of ethanol.

Industry sources have long said that under the updated formula, they expected that the average CI for corn ethanol from a typical Midwest plant would fall roughly 10.2 points to 79.9. That indeed appeared to be the case for some plants, with several sources reporting CI reductions in a range of 10 to 11 points.

Other producers, however, received much smaller reductions, and ethanol made from sorghum appeared to be particularly hard hit, receiving CARB-adjusted CIs that were in some cases only 3 to 4 points below their earlier numbers, sources said. Much of the 10.2 CI reduction sorghum producers had expected were offset, one source said, by increased emission calculations related to fertilizer use and nitrogen oxides.

The source added that some of the producers who received smaller CI reductions are at least weighing whether to reject the new CARB-issued values and ask the agency to reconsider their scores.

A source with an ethanol supplier who failed to get as great a CI reduction as hoped for under the revised formula also questioned whether it would make sense for the company to continue to sell into the California market, suggesting that better values for the product might be found other spot markets such as Arizona.

The agency sent the newly modeled CI scores for both new applications and existing pathways on Friday for applicant review before final certification. Applicants were given summary sheets detailing their proposed CIs and will have seven business days to accept or reject them, CARB said.

The agency said it received 221 recertified and new ethanol pathway applications before the January 31 deadline. Of that number, 113 were completed and 108 were either rejected by the agency or withdrawn by the applicants.

CARB added that the 113 completed applications included 64 requests for recertification using "Tier 1," or first-generation fuels that use starch- or sugar-based feedstocks, and nine recertified existing pathways using "Tier 2" fuels, such as cellulosic alcohols, hydrogen and drop-in fuels. CARB also said it issued proposed CIs for 40 new Tier 1 ethanol pathways.

An applicant who chooses to reject the proposed CI may submit a new application for consideration, CARB said.

CARB said it staff will review applicants' responses to the proposed CIs immediately after the May 3 deadline and "move to certify all CIs except those rejected by the applicant." The certified pathways will be effective from January 1, 2016, for reporting purposes and will be posted on the LCFS website at http://www.arb.ca.gov/fuels/lcfs/fuelpathways/fuelpathways.htm.

--Jeff Barber, jbarber@opisnet.com

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