Bloomberg;

Using crops to make diesel involves an inherent trade-off between the fuel’s climate-friendly benefits and preserving enough supplies to keep food prices in check.

Finding the balance can be tricky. That’s the challenge facing California as it debates a potential revamp of the Low Carbon Fuel Standard.

The frenzy to cash in on credits for lower emissions has triggered a surge in renewable diesel, with state supplies reaching records every quarter since 2020.

The escalation has led environmentalists to call for a limit on crop-based fuels, arguing it’s necessary to ensure the program doesn’t worsen hunger. The biofuel is often made from soybean oil, a staple for cooking.

“California is diverting soybean oil from food markets into its fuel market, and that’s surprising and troubling,” said Jeremy Martin, a senior scientist for the Union of Concerned Scientists who studies the impacts of fuel policy.

And there’s a weird domino effect of using soy oil to make renewable diesel, which some critics say blunts the climate benefits.

As more soy oil goes into diesel, demand climbs for palm oil, a controversial commodity. The European Union wants to phase out its use in fuel production to curb deforestation.

California’s regulatory board recently postponed a March 21 hearing on the fuel standard.