Indonesia sets biodiesel production volumes for B50

California refinery closures spur fuel plan debate

California refinery closures spur fuel plan debate

Houston, 28 July (Argus) — California officials face mounting pressure to maintain fuel reliability as planned refinery closures tighten supplies and increase reliance on imports, even as the state pursues its climate and transportation electrification goals. The California Air Resources Board (CARB) and the California Energy Commission (CEC) released a draft transportation transition plan in May. While the plan outlines recommendations, California still needs a more detailed roadmap to balance fuel supply demand with the state's climate goals, according to panelists who spoke during a 23 July webinar hosted by the Climate Center, an environmental non-profit. A key question for the state is to reexamine what to electrify and when, and which sectors should switch next to biofuels to make the best use of limited renewable power and fuel supplies under current conditions in California, said Jeremy Martin, director of fuels policy for the Union of Concerned Scientists. Transportation is the largest emitting sector in California's economy, accounting for 133.7mn metric tonnes (t), or 37.1pc, of emissions in 2023, data show from the latest state greenhouse gas inventory. The lion's share of these emissions is from passenger vehicles with 101.9mn t, or 28.3pc. California aims to electrify its vehicle fleet, targeting 100pc of in-state sales of zero-emission passenger vehicles and trucks by 2035. "The market is pretty solidly in the direction of battery-electric vehicles, and we don't see any change in that direction at this point," Quentin Gee, CEC energy assessment division manager, said during the panel. But some sectors may be more difficult to electrify because of cost constraints and the time required to add renewable power capacity. Sustainable aviation fuel (SAF) could help reduce emissions from aviation while directing limited renewable electricity supply toward passenger vehicles and trucks, Martin said. "If you only have so much renewable energy that you can scale up, it is a lot more important to convert the cars and trucks to electric vehicles than it is to shift the planes," he said. California has done similar fuel pivots with the adoption of renewable diesel which serves as a "drop-in" replacement for conventional diesel. While gasoline demand is expected to continue falling over time in the state, jet fuel demand is not projected to follow the same course, Gee said. The closures of two refineries in the state in the past year cut 17pc of California's refining capacity, leaving the state increasingly reliant on imports to meet demand. This need to maintain fuel supply availability has lead the CEC to eye the potential for alternative fuels like SAF and ethanol fuel blends to maintain availability for different transportation sectors which use less fossil fuel, Gee said. But if in-state production of these fuels does not scale quickly, it could again leave California reliant on the availability of imports, according to the CEC draft. California will also have to weigh any transition against the interplay of available biofuel feedstocks, the state's low-carbon fuel standard and federal programs and incentives. Federal biofuel tax incentives, such as the 45Z credit, which prioritizes North American feedstocks, have prompted producers to shift from global to domestic supply chains where possible to capture the credit in their 2026 filings. While advocates argue the state must quickly decide its future plans, this likely will happen under a new governor, with governor Gavin Newsom (D) termed-out after this year. The CEC closed public comment on the transportation fuels transition plan earlier this month, though agency staff could not confirm when it would release a final report. The plan is one of several state policy documents used to shape California's path toward its climate and energy goals. Another is the scoping plan prepared by CARB, which outlines how the state aims to achieve net-zero emissions by 2045. CARB released its current scoping plan in 2022, but will not release the next update until 2027. The CEC also plans to release its transportation fuels assessment later this year. The report will examine conditions in California's fuel markets and evaluate policy options to improve fuel reliability and market stability during the transition away from fossil-based fuels. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.