By Josh Rahm, ASA Director of Government Affairs
ASA Director of Government Affairs Josh Rahm says as we navigate the complexities of biofuels and state policy, it is essential that we strike a balance between robust regulation, practical policy and application.Â
As attention remains fixed on the future of federal biofuels policy, the West Coast states, including California, Washington, Oregon and New Mexico, are actively establishing a network of Low Carbon Fuel Standard (LCFS) programs. These initiatives are impacting the national landscape of biofuel consumption and influencing feedstock choices.
The first state to enact this policy was California, with a program in place dating back to 2009. Efforts to reduce air pollution via the state’s LCFS have driven demand for biomass-based fuels. Just over 15 years ago, less than 1% of California’s diesel inventory included biodiesel and renewable diesel. Today, renewable fuels account for more than 70% of the state’s diesel fuel supply and nearly half of California’s greenhouse gas reductions under the LCFS.Â
Fast forwarding to the present, in April 2025, the California Air Resources Board (CARB) finalized amendments to the LCFS. After years of rejecting the idea of a cap on vegetable oil feedstocks, CARB proposed in August 2024 to limit virgin soy and canola oil to a 20% aggregate cap per company within the LCFS program. Currently, virgin vegetable oils account for approximately 30% of the feedstock used in California’s biofuels market. Â
California’s own modeling suggests that by 2030, 80% of vehicles in the state will still rely on combustion engine technology. Consequently, CARB staff indicated that adopting the Environmental Justice Advisory Committee’s cap proposal could lead to increased reliance on fossil diesel—projected at 2.8 billion gallons in 2030 compared to 1.9 billion gallons without a cap. Implementing this cap would heighten demand for imported waste feedstocks while limiting the use of soy in biomass-based diesel.Â
Agricultural feedstocks for biofuel production already meet stringent standards under the U.S. Renewable Fuel Standard. Instead of imposing an arbitrary cap on sustainable, U.S.-sourced feedstocks, CARB should enhance its carbon intensity analysis and oversight of imported feedstocks, which lack the same accountability. Recent actions by the European Union regarding fraudulent biodiesel imports from China highlight these concerns1. The EU recently convened to address allegations of fraud in biodiesel imports, while Malaysia is investigating domestic used cooking oils. Fraud remains a significant issue with imported feedstocks and requires further attention. CARB must implement enforceable traceability and verification standards, including origin disclosures, documentation audits, and physical testing. By not eliminating the cap on U.S. vegetable oil feedstocks, CARB risks prioritizing foreign feedstocks over domestic options.Â
Additionally, a study commissioned by the United Soybean Board and an updated analysis from ASA indicate that the recent amendments could raise petroleum diesel prices by $0.66 per gallon and gasoline prices by $0.43 per gallon by 2028. Capping proven, sustainable domestic feedstocks would reduce the supply of renewable diesel, increase reliance on fossil fuels and drive up fuel prices for California consumers. Recent tariffs on imported feedstocks further exacerbate costs, reinforcing U.S.-based feedstocks as the superior choice. ASA continues to advocate for removal of the cap on U.S.-sourced vegetable oil feedstocks to provide a more economically viable, locally produced and sustainable option.Â
ASA is also concerned about the sustainability guardrails, which are more stringent than the requirements for non-U.S. waste feedstock imports. While palm oil in Southeast Asia has faced scrutiny for forced labor issues2, CARB does not require tracking of social or economic sustainability for used cooking oil derived from palm. Alarmingly, petroleum must meet these criteria. CARB’s proposal makes it easier to use non-sustainable petroleum3 than biofuels with lower carbon intensity scores produced from sustainable U.S. feedstocks. If CARB insists on tracing feedstocks back to the farm, it should also recognize those produced with lower carbon intensity practices.Â
Without a comprehensive update to the Global Trade Analysis Project model for biofuels (GTAP-BIO), which relies on outdated 2004 data, soy-based feedstocks may be phased out of the LCFS, even without the proposed limitations. Current data indicates a significantly lower carbon intensity score for soybeans as growers improve soil practices, reduce water use and lower on-farm emissions. While CARB recommends stringent sustainability guardrails for U.S. soy, it is on track to phase out soy-based biofuels from credit generation by around 2035 or sooner.Â
The core issue with CARB lies in its inefficient policies, overregulation and lack of accountability. Board members are appointed rather than elected, leaving Californians without a voice in decisions that impact their lives and contribute to rising living costs. Increased fuel prices have a cascading effect on the economy. Farmers pay more to run tractors and transportation companies face higher costs to distribute goods. One study4 found that gas price hikes elevate prices in seven out of twelve categories in the Consumer Price Index, particularly affecting transportation, housing/utilities and food—three categories that account for 60% of household expenditures. While some may downplay these concerns, CARB’s policies disproportionately impact those least able to afford it.Â
In terms of fuel supply, the Phillips 66 refinery in Los Angeles is set to close by the end of 2025, followed by the Valero refinery in Benicia in April 2026. Together, these facilities produce about 20% of California’s in-state gasoline supply. A recent analysis5 by USC predicts that gas prices could soar by 75% by the end of 2026 due to these closures, with projections reaching $6.43 per gallon by late 2025 and as high as $8.43 in 2026. These estimates, based on current crude oil prices, could rise even further under volatile market conditions, leading to unprecedented costs for Californians at the pump.Â
All these factors significantly increase costs for consumers and reinforce U.S.-based feedstocks as the clear, sustainable and affordable choice. ASA continues to urge the California legislature to ensure more effective policy and accountability from CARB. Additionally, removing the cap on U.S.-sourced vegetable oil feedstocks will create a more competitive market, reduce fossil fuel reliance, enhance affordability for consumers across California and add further value to our soybean farmers and industry at large. Â
As we navigate the complexities of biofuels and state policy, it is essential that we strike a balance between robust regulation, practical policy and application. A well-structured system of biofuels policy is crucial for environmental stewardship and industry prosperity. However, over-regulation, outdated information, uninformed policies and unnecessary redundancies threaten the very livelihood and sustainability of our family farms, which are the backbone of American agricultural success.Â
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1 EU industry demands answers as ‘fraudulent’ Chinese biofuels continue to flow – EuractivÂ
2 apnews.com/article/virus-outbreak-only-on-ap-indonesia-financial-markets-malaysia- 7b634596270cc6aa7578a062a30423bbÂ
3 frontiersin.org/journals/public-health/articles/10.3389/fpubh.2022.858512/fullÂ
4 IMF Working Papers Volume 2021 Issue 271: The Distributional Implications of the Impact of Fuel Price Increases on Inflation (2021)Â Â
5 files.constantcontact.com/6ddc9aab901/d3ac27a3-d4d4-44f3-9a3b-f91f88735d11.pdfÂ
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