Key Takeaways

• The California Air Resource Board (CARB) has implemented amendments limiting renewable diesel credits for soybean, canola, and sunflower oils, with potential restrictions on biodiesel pathways by 2031.
• Industry experts express concerns over the impact of the new carbon intensity (CI) requirements, which may complicate compliance and increase production costs.
• CARB aims to accelerate decarbonization and has pledged to improve the models used for assessing carbon intensity and land use impacts.

Changes to Biofuel Regulations

The biofuel industry is currently grappling with the implications of recent amendments passed by the California Air Resource Board (CARB) to the Low Carbon Fuel Standard (LCFS). These changes include a 20% limit on credits applicable to renewable diesel produced from crops such as soybean, canola, and sunflower oils. Furthermore, CARB may discontinue accepting new biodiesel and renewable diesel pathways by 2031 if certain zero-emission vehicle (ZEV) targets are achieved.

Scott Gerlt, chief economist at the American Soybean Association, has expressed hope that CARB will update its indirect land use change (ILUC) modeling, which is currently outdated and influences nearly half of soybean’s carbon intensity score in the state. Gerlt noted that while some alternative models suggest lower ILUC penalties for soybeans, other groups advocate for even higher scores. He emphasized the importance of closely tracking CARB’s updates to ensure accuracy and potentially enhance soybean’s ILUC score.

Concerns have also emerged regarding the growing carbon intensity (CI) requirements, which pose both benefits and challenges. Although stricter CI rules might increase the value of credits, they could also accelerate the phase-out of soy products from the market. Gerlt’s analysis indicates that nearly 30% of California’s biodiesel feedstocks are derived from canola and soy.

The introduction of new sustainability requirements adds further complexity, with producers unprepared for the associated costs. Gerlt pointed out that these requirements are set to begin upon the next planting season, creating urgency among farmers.

Jeff Earl, Director of State Governmental Affairs for Clean Fuels Alliance America, highlighted that the organization represents nearly 75% of California’s diesel pool and 45% of the credits. He described the amendments as a potential regression in California’s efforts to move away from petroleum, noting that the cap on soy credits was unexpected and will demand thorough analysis.

Earl emphasized the need for equitable treatment of various feedstocks. The reliance on waste feedstocks like tallow and used cooking oils represents a significant shift necessitated by the new regulations. He suggested that refining the Global Trade Analysis Project, the model CARB utilizes to evaluate land use impacts, would help in addressing the inconsistencies in the regulatory framework.

Both officials identified the 20% cap on soy credits as arbitrary given the already high ILUC penalties. Gerlt stated that there is now a “strong inconsistency” in addressing the same issues through various additional measures.

During discussions at the 2025 Clean Fuels Conference, CARB Executive Officer Steven Cliff explained that the recent amendments were necessary to expedite decarbonization efforts. He stated that the previous lack of regulatory updates would have resulted in stagnation in CI reduction targets. Cliff acknowledged that the new sustainability guardrails are designed to prevent adverse land use changes associated with crop-based biofuels but clarified that regulations do not outright eliminate biofuels.

As CARB continues to refine its legislative framework, Cliff indicated plans to establish working groups focused on sustainable aviation and land use change while improving transparency in program outcomes. The Office of Administrative Law (OAL) must approve the final regulatory order, with a decision expected by February 18.

Cliff concluded with a commitment to maintain momentum and defend the essential cleaner regulations and initiatives as necessary.

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