The amendments proposed by the California Air Resources Board (CARB) are a net positive for biofuel demand but negative for soybean oil (SBO) and canola oil as feedstocks, sources told Fastmarkets. Within California’s LCFS framework, renewable diesel (RD) production consumes more soybean oil than biodiesel production does.

The CARB provided notice on August 12 that additional modifications (titled 15-Day Changes) were appropriate for the proposed amendments to the Low Carbon Fuel Standard (LCFS). The modifications include limiting, on a company-wide basis, the credits from the use of virgin soybean and canola oil to 20% of annual credit production and increasing the 2025 step-down benchmark stringency to 9%.

The benchmark schedule for average carbon intensity (CI) has been updated to include a 9% increase in stringency, achieving a 22.75% CI reduction compared with the 13.75% CI reduction specified in the 2018 regulation.

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