The Landscape
Greening of the world’s energy supply is inevitable and essential to the welfare of the planet.
Challenge: Air Quality
The world’s dependence on petroleum led to the deteriorating health of Planet Earth and the remedy to this incredible challenge is to stimulate the production and use of alternative, low-carbon fuels. The Industrial Revolution has led the advancement of humankind in virtually every way imaginable, but it has done so at a cost; that cost being the health of the planet itself. This untoward impact of CO2 emissions has become increasingly more obvious over the last several decades. It is society’s and industry’s obligation to address this challenge for future generations.
The greening of the world’s energy supply is inevitable and essential to the welfare of the planet. The two biggest contributors of carbon to the Earth’s atmosphere are the Power Generation sector and the Transportation Fuels sector.
| Power Generation | Transportation Fuel |
|---|---|
|
CO2 emissions are successfully addressed in the Power Generation sector through a combination of wind, solar, biomass and hydroelectric generating facilities. |
Transportation Fuels are responsible for 40% of all carbon emitted into the atmosphere. Early efforts to lower emissions in transportation fuels has generally meant the introduction of drop in fuels such as ethanol and biofuels. Those fuel sources have supplanted a certain amount of Carbon but have their limitations. They can only be used incrementally (10-15% of the transportation fuel pool) because of their chemical composition and characteristics. |
| Power Generation | Transportation Fuels |
|---|---|
| CO2 emissions are successfully addressed in the Power Generation sector through a combination of wind, solar, biomass and hydroelectric generating facilities. | Transportation Fuels are responsible for 40% of all carbon emitted into the atmosphere. Early efforts to lower emissions in transportation fuels has generally meant the introduction of drop in fuels such as ethanol and biofuels. Those fuel sources have supplanted a certain amount of Carbon but have their limitations. They can only be used incrementally (10-15% of the transportation fuel pool) because of their chemical composition and characteristics. |
Regulatory Backdrop
The Federal Government has attempted to address this challenge nationally by the implementation of the Clean Air Act and the Renewable Fuel Standard. Some states have gone further to address the issue; most notably California who has been tackling the issue of air pollution through various initiatives for years. Other Western states and Canadian provinces are taking the lead from California and implementing similar regulations and mandates. Eastern states are taking note and are expected to adopt more stringent air pollution policy in the near future.
The first low-carbon fuel standard mandate in the world was enacted by California in 2007, with specific eligibility criteria defined by the California Air Resource Board (CARB) in April 2009 but taking effect in January 2011. Similar legislation was approved in British Columbia in April 2008. The Low Carbon Fuel Standard (LCFS) is designed to decrease the carbon intensity of California’s transportation fuel pool and provide an increasing range of low-carbon and renewable alternatives, which reduce petroleum dependency and achieve air quality benefits.
The LCFS requires oil refineries and distributors to ensure that the mix of fuel they sell in the California market meets the established declining targets for greenhouse gas (GHG) emissions, measured in CO2 equivalent grams per unit of fuel energy sold for transport purposes. These reductions include emissions from production, distribution and use of transport fuels within the state. The LCFS directive also calls for a continuing reduction of the carbon intensity of California’s transportation fuels over time. The Standard is also aimed to reduce the state’s dependence on petroleum, create a market for clean transportation technology, and stimulate the production and use of alternative, low-carbon fuels in California.
The LCFS continues to drive production of a growing volume of cleaner transportation fuels for California consumers: to date almost 4 billion gallons of petroleum diesel have been displaced by clean, low-carbon alternatives.
The first low-carbon fuel standard mandate in the world was enacted by California in 2007, with specific eligibility criteria defined by the California Air Resource Board (CARB) in April 2009 but taking effect in January 2011. Similar legislation was approved in British Columbia in April 2008. The Low Carbon Fuel Standard (LCFS) is designed to decrease the carbon intensity of California’s transportation fuel pool and provide an increasing range of low-carbon and renewable alternatives, which reduce petroleum dependency and achieve air quality benefits.
The LCFS requires oil refineries and distributors to ensure that the mix of fuel they sell in the California market meets the established declining targets for greenhouse gas (GHG) emissions, measured in CO2 equivalent grams per unit of fuel energy sold for transport purposes. These reductions include emissions from production, distribution and use of transport fuels within the state. The LCFS directive also calls for a continuing reduction of the carbon intensity of California’s transportation fuels over time. The Standard is also aimed to reduce the state’s dependence on petroleum, create a market for clean transportation technology, and stimulate the production and use of alternative, low-carbon fuels in California.
The LCFS continues to drive production of a growing volume of cleaner transportation fuels for California consumers: to date almost 4 billion gallons of petroleum diesel have been displaced by clean, low-carbon alternatives.
“Now a climate target of an additional 40 percent overall reduction of climate-changing gases is in place for 2030, under SB 32. To help California reach that goal, CARB built on the success of the LCFS by doubling the required reduction level and setting a 2030 target for vehicle fuels of 20-percent less carbon than is now found in gasoline and diesel fuel. Those cleaner fuels will displace millions more gallons of fossil fuels, helping pave the way for California to achieve full carbon neutrality by 2045. The standard provides consumers with a growing variety and volume of cleaner fuels. Renewable liquid fuels – including renewable and biodiesel – displaced over 568 million gallons of diesel in 2018.”
--California Air Resources Board (Release 19-22, May 16, 2019)
Solution: Renewable Diesel
Renewable Diesel marks a new beginning in the Transportation Fuels sector. Through the application of breakthrough technological advances, a Next-Gen transportation fuel is being introduced. Renewable Diesel is 100% derived from agricultural waste streams such as Distillers Corn Oil (“DCO”, which is a biproduct of ethanol production), animal fats and waste from rendering facilities, and used cooking oil (“UCO”). These feedstocks have limited commercial value and are not consumed by humans, therefore they do not compete in the energy versus food paradigm.
Renewable Diesel is superior to ethanol and biodiesel. It is a cleaner burning fuel which is entirely interchangeable with Ultra Low Sulfur Diesel (“ULSD”, the cleanest petroleum-based fuel on the market today). It is cleaner and superior to ULSD in other critical ways including a reduction in cancer causing particulate emissions and a reduction in SOX emissions that contribute to acid rain.
