As California continues down the highway of low carbon fuels, the state’s biofuel industry is calling for more funding to ensure the highway doesn’t end in the ocean. The biofuel industry, including the ethanol, biodiesel and biomethane trade associations, is calling on Governor Brown to allocate $210 million from the Greenhouse Gas Reduction Fund to help spur in-state production of low carbon biofuels. The biofuel supporters are hoping to see the Biofuel Initiative passed as part of this year’s budget.

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To help meet California’s Low Carbon Fuel Standard, fuel retailers are importing biofuels into the state from places such as the Midwest. However, according to the biofuel industry,with proper funding, California biofuel production could increase from 250 million per year in 2014 to 966 million gallons per year in 2019. This would also spur employment in the state in the biofuel industry.

“California has adopted some of the most forward-thinking policies in the nation to combat climate change – including AB 32, SB 535, the Low Carbon Fuel Standard, and SB 350 – and it is up to state legislators to encourage and promote in-state biofuel production to achieve the Governor’s goals,” said Russ Teall, president of the California Biodiesel Alliance. “Investing in this initiative helps improve the environment, while creating jobs and providing energy security.”

According to the biofuel industry, a $210-million allocation of AB 32 cap and trade auction proceeds from the state budget’s Greenhouse Gas Reduction Fund, administered by the California Air Resources Board (ARB), would:

• Create 24,750 direct and indirect jobs;
• Reduce greenhouse gas emissions by nearly 6,000,000 metric tons;
• Spur economic development of $11.5 billion;
• Displace 714 mgy of petroleum;
• Generate fuel tax revenues of $230 million; and
• Bring in other state and local tax revenues of $408 million.

“The biofuels we produce lower the carbon content and give consumers more choices,” added Neil Koehler, chief executive officer of Pacific Ethanol. “State investment needs to be prioritized for in-state production of biofuels that will pay back with local jobs, tax revenue and community growth.”

Legislators will determine how much money to allocate toward in-state biofuel production by June 15, 2016, at which point the allocation will be included in the state’s budget for Governor Brown’s approval or veto.