Advocacy

Advocating For Lower Carbon Fuels

Leading a transformation also means being a leader in telling the biodiesel and renewable diesel story. Chevron Renewable Energy Group is actively involved in advocating for public policies that support and impact Chevron Renewable Energy Group and our business. We, alongside our trade association partners like the Clean Fuels Alliance America, Advanced Biofuels Canada, Advanced Biofuels Association and the American Soybean Association, to name a few, are focused on working with our elected officials in local, state and federal governments. The public policy issues we advocate for include the following.

Regulatory and Lower Carbon Programs

The regulatory environment is an embedded piece of our business as market forces often dictate where our fuel is placed and under which regulatory framework it falls. Chevron Renewable Energy Group participates in a variety of process safety, governmental and third-party compliance programs that are meticulous in their standards. These programs have a variety of approaches, metrics and rules, but overall, they collectively help assure that Chevron Renewable Energy Group manages its operations with utmost care, appropriate oversight, and in fulfillment of our compliance obligations.

All Chevron Renewable Energy Group renewable fuels and associated feedstocks meet the qualifications of at least one lower carbon program. Many of our products meet the specifications for multiple programs and we look to market forces to determine the appropriate placement of our fuel. Below are some of the notable programs and lower carbon standards applicable to our business:

Program	Summary
Renewable Fuel Standard (RFS) and Renewable Identification Numbers (RINs)	U.S. federal policy establishes renewable volume obligations (RVO), which require a certain volume of renewable fuel to replace or reduce the quantity of petroleum-based gasoline and diesel used in transportation fuel and heating oil. Among other requirements, advanced biofuels must achieve at least a 50% reduction in GHG emissions compared to a 2005 petroleum baseline, and the feedstock used must qualify as renewable biomass. RINs serve as the tracking and compliance mechanism to facilitate this program. Participation requires third-party review and routine reporting requirements. Biodiesel, renewable diesel and sustainable aviation fuel can generate D4 RINs (biomass-based diesel) if they meet the applicable requirements.
California Low Carbon Fuel Standard (LCFS)	This regulation is designed to decrease the greenhouse gases associated with California’s transportation fuels and increase usage of low-carbon fuel alternatives. All fuel receives a carbon intensity (CI) score based on that fuel’s life cycle assessment, which includes inputs like feedstock type, refining technology and transportation distances. All CI scores are validated by a third-party auditor and professional engineer and documented in an approved pathway accessible on the CARB website. Participation requires ongoing reporting and third-party verification.
Oregon Clean Fuel Program	This state program is designed to reduce the average CI of Oregon’s transportation fuels and leverages many aspects of the California LCFS program. In addition to the requirements of the Clean Fuel Program, Oregon law requires that all diesel fuel sold in the state be blended with at least 5% bio-based diesel.
European Renewable Energy Directive (RED II)	In the European Union (EU), the RED II establishes renewable energy targets within the transportation sector. The program prioritizes the use of biofuels produced from certain waste and advanced feedstocks. While RED II sets the overarching objectives, each member state is allowed to uniquely implement.
International Sustainability and Carbon Certification (ISCC) and REDCert	These certification programs cover sustainable biomass, biofuels and bioliquids, specifically for the EU RED II. Developed as part of a multi-stakeholder process and governed by association members, research institutes and NGOs, these programs require all elements of the supply chain to be individually certified. Participation includes annual reporting and third-party attestation.
Norwegian Environmental Agency Guidelines	These guidelines cover sustainability criteria, reporting and verification for GHG emission savings, land use criteria and a mass-balance system as set forth in Norwegian legislation, which took effect in 2014 and allows for reporting aligned with RED or RED II. Participation requires independent third-party review of feedstock origins, sustainability criteria associated with mass balance, GHG calculations for refinery production and an annual attest engagement.
Canadian Federal and Other Provincial Minimum Blend Programs	The Canadian federal government aims to reduce the amount of GHGs emitted through fuel combustion and currently requires 2% bio-based content to be blended into the diesel pool. A number of provinces also have minimum blend standards for bio-based diesel, including Alberta (2%), Saskatchewan (2%), Manitoba (3.5%-5%) and Ontario (4%), that encourage additional renewable fuel usage and greenhouse gas reduction.
Canadian British Columbia (BC) LCFS	The BC also maintains a minimum bio-based blend requirement of 4%. Additionally, the province established the BC-LCFS in 2008, with implementation in 2013, which aims to reduce the CI of fuels used in the province through a current target of a 20% CI reduction compared to conventional fuels by 2030. Fuel CI is determined using an LCA, which includes inputs like feedstock type, refining technology and transportation distances.

Advocacy

Chevron Renewable Energy Group is passionate about the influence our business can make on the planet and we engage politically across a number of issues that drive the energy agenda in our markets. We take political positions for  higher standards, promote fairness and support the development of programs, policies and political positions that result in the growth of lower carbon energy options. A few of our 2021 efforts are noted below:

	Our Position	Our Efforts	Outcome
Expanding LCFS markets Expanding and instating LCFS markets and policies on the West Coast, in the Midwest, in New England and in Canada	We actively support lower carbon fuel programs to combat climate change at a lower cost to consumers and assist with air pollution reduction. These programs could expand our current market reach.	We engage with legislatures, build industry coalitions, provide expert testimony and engage key stakeholders.	Multiple states and provinces have passed or expanded rulemaking, while others have introduced or discussed similar legislation. State of Washington passed the Clean Fuel Standard in 2021.
Support for higher blends Establish minimum blend standards, higher blend use and 100% biodiesel use	We want to enable fleets to use higher to accelerate their lower carbon efforts. We believe certain challenges, such as OEM limitations and concerns, are inflated and potentially inhibiting fuel user GHG reduction..	We work alongside business leaders, policy makers and industry bodies to educate and introduce best practices for biofuel use.	Certain states require and incentivize the use of bio-based diesel through minimum blend rates. Many states and municipalities encourage the purchasing of vehicles which use high blends of bio-based diesel.
U.S. Renewable Fuel Standard (RFS) Sets Renewable Volume Obligation (RVO) levels on an annual basis for producers and importers of diesel and gasoline	We believe that there is sufficient feedstock and production capacity to support the RFS and grow the RVO to drive help  industry growth and GHG emissions reductions.	We engage with U.S. Senators & Representatives, the Administration and other elected officials and staff, as well as leaders in EPA and trade associations to amplify support for RVO growth. Several Chevron Renewable Energy Group executives gave testimony at the EPA hearing on the 2020, 2021, and 2022 proposed RVOs. We also submitted written testimony that the RVO for biomass-based diesel should be increased to 4 billion gallons (actual) and the RVO for advanced biodiesel should be increased to 7 billion gallons  (ethanol-equivalent gallons or RINs).	We expect a final ruling on 2022 RVO levels and a proposed rule for 2023 volumes from EPA by mid-2022.
Tax incentives Continuation of the Biodiesel Mixture Excise Tax Credit (BTC) which provides a $1.00 refundable excise tax credit per gallon to the first blender of record for bio-based diesel with petroleum diesel and growing and extending Midwest retail and tax incentives	We support incentives that will help grow the bio-based diesel industry, support higher blend usage and lower carbon intensity and encourage local production and consumption.	We engage in lobbying, grassroots and public opinion efforts, educational engagements and coalition building to establish reliable, long-term incentives.	U.S. federal efforts currently offer greater visibility than ever before, with anticipated phasing out of current incentives. Illinois, Iowa and Missouri recently passed supportive legislation for bio-based diesel.
Europe’s “Fit for 55” package References a climate target of 55% GHG reduction by 2030 in the European Union, and includes Chevron Renewable Energy Group-relevant legislation: RED for road transport, ReFuelEU aviation and FuelEU Maritime as well as Fuels Quality Directive	We advocate for a level playing field across all transport sectors (road, marine, aviation) and technology neutrality, as well as maximization of GHG reduction per feedstock molecule.	We conduct direct advocacy with European and Dutch representatives of parliament, coordinate with industry associations and other industry players and leverage media coverage.	An initial proposal to offer extra incentivization for the use of waste lipids in aviation biofuels vs. terrestrial biofuels has been changed.
Other International Exemption for used cooking oil (UCO) as an animal byproduct (ABP) Establish new specs for fatty acid methyl esters (FAME) for inland-shipping Increase public fuel station bio-blend levels	We want to help fuel users have access to high quality product that advances lower carbon solutions  and minimize regulatory confusion. We are supportive of UCO being exempt from ABP rules; supportive of improved FAME quality for the inland-shipping market; and supportive of increasing bio-blend levels from 7% to 10% (B7 to B10).	We work with governmental bodies and partner with other industry players to collaborate with Dutch Oils and Fats Industry.	There has been positive momentum on these topics, with further clarity expected by mid-2022.
Fair incentivization for Sustainable Aviation Fuel (SAF) and competitive technologies	We are supportive of GHG reduction efforts across industries and specifically recognize the lack of options available to the aviation industry. However, with a global goal to reduce carbon emissions, we believe no solution should unfairly disadvantage other lower carbon options.	We use both grassroots and grasstops efforts, in addition to earned and paid media to educate and engage across the industry to promote a level playing field for lower carbon solutions.	Proposed legislation that would over-incentivize SAF is currently stalled in the U.S. Senate. We are continuing our grasstops efforts to educate on this issue.