Comment Log Display

We commend the California Air Resources Board (ARB) for
establishing this additional pathway for biodiesel made from
existing renewable feedstocks.  This pathway will increase the
availability of low-carbon biodiesel available to meet greenhouse
gas (GHG) reduction goals under the Low Carbon Fuel Standard
(LCFS).

As the biodiesel industry grows in volume production, our member
producers make more efficient utilization of installed production
capacity.  Growth in the biodiesel industry also results in
innovation and more optimal utilization of existing feedstocks. 
Corn oil from ethanol plants, also known as distillers’ corn oil,
is a shining example of successful growth of the biodiesel industry
leading to innovation and development of new feedstocks.  2013 was
a tremendous year for biodiesel.  The enthusiastic growth of
biomass-based diesel was matched by record increases in feedstock
diversity and GHG reduction.  While the national industry grew by
55 percent as a result of the federal Renewable Fuel Standard, the
most significant volumes of new feedstocks came into use from
distillers corn oil, used cooking oil, animal fats, and various
other sources.  Together, these wastes and new feedstocks grew by
88 percent in 2013 . Among these, distillers’ corn oil has been
growing most dramatically.  
The US biodiesel industry came into being to solve economic
problems related to a glut of soybean oil stranded on the domestic
market.  Domestic production and crush of soybeans to produce
livestock feed created a surplus of soybean oil in excess of that
used for food products.  While export markets for whole soybeans
thrive, importers find greater profit margin in transporting whole
beans to produce protein meal and vegetable oil in foreign markets.
 Potential importers of US-produced soybean oil face a lower (and
therefore infeasible) rate of return compared to importing whole
beans.  Therefore, a domestic use of this surplus soybean oil was
needed.  As the biodiesel industry works collectively to establish
policy, infrastructure, and OEM (Original Equipment Manufacturer)
support for biodiesel as a fungible compliment to diesel fuel; we
have realized that growing a diverse biodiesel industry can solve
additional problems related to energy security and GHG emissions. 
The momentum derived from finding a use for surplus soybean oil has
morphed into finding other feedstocks that can add to biodiesel’s
ability to reduce GHGs, displace imported oil, and support domestic
jobs.  Distillers’ corn oil is an example of industry innovators
responding to that call.  Before 2010 there was relatively little
corn oil being extracted from distillers’ grains.   In 2013, over 1
billion pounds of distiller’s corn oil were used to produce
biodiesel and 2014 is on track to surpass 2013.     The policy
signals to increase biodiesel production resulted in rapid growth
of corn oil extraction.  No new crops need to be produced in order
to acquire this corn oil.  No change in ethanol output is required.
Distillers’ corn oil is pulled out of the byproduct stream of
ethanol production with no negative impact on the economic value of
that byproduct.  While the nutritional value of distillers grains
with solubles (DGS) is slightly changed, with offsetting impacts on
feed quality depending on the species; considerable research
indicates that the new lower fat DGS have approximately the same
value in the feed market as conventional DGS. , ,  Ethanol
producers realize higher economic return from their process,
because federal and LCFS policy create incentive to create
biodiesel from their byproduct stream.  The incentive to increase
biodiesel production is the essential factor in making this
utilization of byproduct a reality. Other uses for distillers corn
oil, such as livestock feed would not provide the incentive to
extract this oil without policy driving biodiesel.
For the reasons stated above, ARB’s decisions regarding allocation
of emissions for producing distillers’ corn oil are correct.  Also
correct is ARB’s determination that distiller’s corn oil is
available for biodiesel with no indirect land use change. 
Distillers’ corn oil did not exist as an economic commodity before
the draw to use it for biodiesel production.  Therefore, it is not
being taken away from another market. The relative identical price
of DGS with or without oil extraction proves oil extraction has no
economic impact on DGS users.  Furthermore, ARB should consider
factoring in the existence of distillers’ corn oil in reducing the
indirect impact of other biodiesel feedstocks. The evolution of the
biodiesel industry and its origins based on soybean oil utilization
spurred these developments in corn oil extraction.  While the
National Biodiesel Board disagrees that the response to domestic
biodiesel production from vegetable oil is the expansion of oilseed
production internationally; we assert that corn oil extraction is a
market response to successful growth of the biodiesel industry. 
The growth of corn oil extraction is proof that the biodiesel
industry can innovate to find new feedstocks without disrupting
other markets. The discovery of distillers’ corn oil going into
biodiesel as well as that going into animal feed markets should be
counted as additional to the global fats and oil markets as a
credit to the biodiesel industry.  This ultimately reduces the
indirect impact of biodiesel from various feedstocks.
Specific to the documents posted on the ARB website regarding this
new pathway, we note that the pathway addresses corn oil extraction
in nine specific states. We would suggest inclusion of corn oil
produced in all of North America.  Emissions from transportation
are relatively small differences in the lifecycle.  Inclusion of
more states and Canada would further incentivize production of
low-carbon fuel.  Similarly, biodiesel produced in all of North
America should be included for maximum inclusivity of the broadest
possible pathway.  Additional pathways for specific regions with
lower emissions could be added later.
The addition of this new pathway is beneficial, because it will
allow the use of corn oil from ethanol plants that sell wet DGS. 
It is also beneficial to allow flexibility in using this new
pathway for plants that may sell some of their DGS as wet or dry.
We stress the importance of maintaining the previous pathway for
plants that dry their DGS.  Businesses have made strategic
investments based on existing pathways.  It is important to
preserve consistency in the treatment of corn oil from dry DGS for
the sake of building a sustainable biodiesel industry as well as
implementing a successful LCFS.
We look forward to improving the accuracy of all biodiesel pathway
assessments and the recognition of new and beneficial biodiesel
feedstocks.  We welcome any question you have about these comments
or requests for further clarifying data.