⛴️ CARB Commercial Harbor Craft (CHC) Regulation Amendments – RD Headed Out to Sea

Link to article: https://stillwaterassociates.com/carb-commercial-harbor-craft-chc-regulation-amendments-rd-headed-out-to-sea/

November 18, 2022

It seems like renewable diesel (RD) is on the radar of nearly everyone in the transportation industry these days. Typically, RD discussions center on California’s Low Carbon Fuel Standard (LCFS) and other LCFS style programs elsewhere which incentivize its use. Flying under the radar, however, is an upcoming regulatory implementation which will require usage of RD in the marine industry. Indeed, on January 1, 2023, RD as R99 (99% RD) or R100 (100% RD) will be required for commercial harbor craft (CHC) in California provided the Office of Administrative Law (OAL) approves the resubmittal package from CARB. Among the vessel types that fall under the CHC category are crew and supply boats, fishing vessels, ferries, excursion vessels, tugboats, barges, and dredges. As such, most commercial vessels that are used in California waters outside of ocean-going vessels are governed by the CHC Regulation and will be impacted by the proposed amendment. Owners/operators of these vessel types operating in California Regulated Waters will be required to comply.  

Under California’s current CHC regulation, adopted in 2008 and amended in 2010, CHC vessel owners for select categories were required to replace older engines with newer and cleaner Tier 2 and 3 diesel engines, which reduce criteria air pollutant emissions. Furthermore, under the current CHC regulation, CARB ULSD has been required as fuel for CHCs, replacing higher sulfur diesels that have higher criteria pollutant (NOx, SOx, particulate matter, etc.) emissions.  

The pending 2022 amendment to the CHC regulation will require zero-emission options where feasible and cleaner combustion Tier 3 and 4 engines and diesel particulate filters on all other vessels. These requirements will phase in starting in 2023 and ramp up through the end of 2032. The switch to RD in place of CARB ULSD further reduces criteria pollutants and is a measure that can be taken without modification to or replacement of existing engines. 

Importantly, this amendment to the CHC will replace the ULSD requirement with the requirement to use RD (R100 or R99) for CHC fuel beginning January 1, 2023. According to CARB Staff, there are no record-keeping requirements associated with this requirement although if there is unavailability of R100 or R99 for fueling, documentation demonstrating the unavailability is required. R100 or R99 is widely available in California and represents about 37% of California’s diesel fuel usage. Renewable diesel is supplied to California by marine vessel from the U.S. Gulf Coast, Portland, and Singapore; by rail from production facilities in the Midwest, U.S. Gulf Coast, and Western States; and by production facilities in California. Availability of R100 or R99 in major harbors in the San Francisco Bay region and Los Angeles region should not be a problem as these harbors are where RD is currently received by marine movements. Smaller harbors or those in remote areas, however, may experience more issues with R100 or R99 availability. 

CARB Staff estimates that 55 million gallons per year of fuel are covered by the CHC regulation. According to data in the LCFS program, California used 1,829 million gallons of diesel fuel which included 670 million gallons of RD in the first six months of 2022. Thus, the RD covered by the CHC Regulation (and its proposed amendment) represents about 1.5% of the diesel fuel reported under the California’s LCFS program and could represent a 4% increase in RD use in California. 

Stillwater’s expertise covers transportation fuels of all types, and we can help you understand and plan for the changes in the CHC regulation. Contact us to discuss how our insights and analysis can help you navigate the evolving transportation fuels on the West Coast and beyond.  

Categories: News, Policy