Meat & Poultry &…Biodiesel(?)

Small Scale Biodiesel Processing is a small but important, rapidly-growing industry in the throes of transition. Transition creates change, and change generally frightens people who have benefited from the traditional way of doing things.

As change emerges in our industry, I am afraid that the majority of the "change agents" are either ill-informed, apathetic or driven by an old-school-protect-the-status-quo-with-money-and-influence agenda. While we see this in every market, where large companies feel threatened by changes they do not control (or monopolize) and government agencies are loathe to change existing policies that may have worked once, but now merely impede the development of needed change, it is disheartening to see the CA policy machine turned the wrong way on biodiesel.

We are all familiar with Big Oil's position as standard bearer for the do-nothing-it's-all-fine-the-way-it-is-today corporate "change impairment" model. And the media has repeatedly unearthed depressing examples of government legislatures - federal and state - appearing gridlocked by design and transparently conflicted by the monied, status quo contributors and lobbyists. However, it is difficult to understand the current regulatory hurdles that are in place in California which appear specifically tailored to impede the proliferation of small scale biodiesel production.

Recently, I had the opportunity to dive into the (shallow end of the) California Environmental Policy Pool. My journey began with an email from a friend that informed me that the California Food and Agriculture Department, and specifically its Meat and Poultry Division was beginning to more actively enforce the "rendering regulations" currently on the books. The rendering regulations basically state that anyone using biodiesel for anything other than their own car/truck must register as a Renderer, pay a $3,100 annual fee and adhere to the same restrictions as the true rendering companies, whose entire business is picking up millions of gallons of grease, processing it and selling it domestically or overseas for a profit.

During my telephonic swim, I spoke to a number of people, most of whom were helpful, but none of whom were capable of identifying a central repository for the State's

"position" on biodiesel (I was, however, able to speak with the author of AB 1846, a young lawyer on Assemblyman Anthony Adams' staff, whose legislation to reduce the cost of an individual's grease transporting license, is currently on the Governor's desk. So I dutifully called the Governor's office and weighed in telephonically in support of this minor but incrementally positive legislation - 916-445-2841).

Eventually I found the right person at Meat & Poultry. Paul Roos is the functional czar of grease in CA, and as such effectively holds sway over the CA biodiesel ecosphere. He is a pleasant man and very informed. He confirmed my understanding of the rendering rules, but was resistant to my argument that these rules effectively stifle the small scale biodiesel processing industry.

For example: If a small contractor has a fleet of 6 trucks and a couple of generators and processes 200 gallons of recycled vegetable oil per week to use in his trucks and generators, he will - if he uses a BioPro - save $600/wk or $31,200 per year.

In addition, as he transforms his RVO – previously a waste product – into a valuable energy commodity, he will reduce his carbon footprint by over 75% (not to mention the significant reduction in particulate matter). It’s possible he will think of other environmentally beneficial approaches that he might use on the job site, and he will help swell the ranks of people using biodiesel rather than diesel. All of this, I would argue, is good and lessens our dependence on finite, dirty diesel.

Meat & Poultry believes this contractor is a Rendering Company, "making money" by processing grease. I argue that the Rendering companies collect millions of gallons of grease per year, process it and SELL it to third parties. He argues that the small contractor uses the grease to "make money". I'd argue, the small contractor is saving money, but without torturing semantics, the practical result is that the State of California currently mandates the Meat and Poultry division of its Food and Agriculture Department to limit the growth of the ONLY alternative energy source - RVO-based biodiesel - that is environmentally beneficial, locally sustainable and economically attractive, today.

So how can we fix this? How can we change the regulatory landscape to encourage wider use of biodiesel based on both virgin and used vegetable and animal oils? And, importantly, how can we enact new legislation that does not overtly threaten the Rendering industry, which is an essential part of the corporate landscape.

First of all, California has already committed itself to the development of Alternative and Renewable Fuel and Vehicle Technology :

AB 118 created [in 2007] the Energy Commission's Alternative and Renewable Fuel and Vehicle Technology Program. (Health and Safety Code, Section 44270 et seq). The program is intended to increase the use of alternative and renewable fuels and innovative technologies that will transform California's fuel and vehicle types to help attain the state's climate change policies.

And yet, why then do the most obstructive regulations emanate, as noted above, from the good people at Meat & Poultry?

When one views the goals of AB 118, they seem tailor made for biodiesel:

AB 118 authorizes the Energy Commission to provide, upon appropriation by the Legislature, approximately $120 million annually as incentives to public agencies, vehicle and technology consortia, businesses, public-private partnerships, workforce training partnerships and collaboratives, fleet owners, consumers, recreational boaters, and academic institutions for projects that:

So, in a nutshell, California seems to want to encourage the production of biodiesel, but the regulations are not conceptually or practically consistent. This should not be overly difficult to fix:

1. First of all, the State having recognized that biodiesel is a viable piece of its overall alternative energy portfolio, should aggregate policy under one roof. The California Energy Commission, which is the state’s primary energy policy body, must manage policy for the biodiesel industry

2. Given the attractive nature of biodiesel, the State needs to modify existing laws.

- Small businesses and individuals who process RVO into biodiesel for their own use, and do not sell it, should be allowed to continue to do so without being classified as Renderers.

- Current legislation AB 1846 would allow for individuals to keep 160 gallons on site at any one time. Not all small businesses are experts at JIT management of oil sources. The number should be increased to 500 gallons to allow a small business to implement a real process.

- AB 1846 also necessitates that anyone who picks up grease must have a license and a contract from the establishment where he or she is collecting. This should also be approved, as it protects the Renderers from the most serious threat to their business - people who steal grease.

- Small Businesses that make biodiesel for use in their business vehicles and machinery do NOT need to register as Renderers as they are not selling the processed grease

- The current road tax levied on drivers who process their own ASTM-certified RVO-based biodiesel should be suspended until 2012 in order to further stimulate usage.

3. If anyone sells biodiesel of any kind they should be permitted appropriately, and if they use RVO or other rendered products to process biodiesel, they should register as a Renderer as well.

These are simple changes. I am sure that others can add nuances depending on their industry affiliation, but at the end of the day if Californians believe biodiesel represents a step in the right direction, we need to take direct steps to smooth the path and remove needless roadblocks.