On Monday, biofuels industry leaders will hold briefings for Capitol Hill staff and the media to discuss the implications of the decision and where we go from here. The Fuels America briefing will feature Buis, Dinneen, Advanced Ethanol Council (AEC) Executive Director Brooke Coleman, and Brent Erickson with the Biotechnology Industry Organization (BIO).
The Environmental Protection Agency’s decision to hold off on issuing a final rule for 2014 volume obligations under the Renewable Fuel Standard (RFS) continues the atmosphere of uncertainty for the advanced biofuel industry, according to the Biotechnology Industry Organization (BIO).
“We appreciate that EPA will not be finalizing a proposed 2014 RFS rule containing a flawed methodology for setting the renewable fuel volumes,” said BIO President & CEO Jim Greenwood. “Unfortunately, the delay in this year’s rule already has chilled investment and financing of future projects, even as first-of-a-kind cellulosic biofuel plants are right now starting up operations. The industry needs a final rule that is legally appropriate and continues to support our efforts.”
Advanced Ethanol Council (AEC) Executive Director Brooke Coleman says that pulling back on the 2014 RFS rule is “the right thing to do at this stage in the game when it comes to preserving the integrity of the program.”
“While the cellulosic biofuel industry will not get the policy certainty it needs from this decision, it does suggest that the Administration is listening when it comes to our concerns about giving oil companies too much power to avoid its obligations under the RFS going forward,” Coleman added. “This battle was never about the 2014 volumes for the oil industry, and we appreciate the Administration’s willingness to pivot in the right direction this late in the game. The key now for advanced biofuel investment is to move quickly to fix what needs to be fixed administratively so we can reestablish the RFS as the global gold standard for advanced biofuel policy.”
EPA hit the big reset button. Given the fact that we are already at the end of 2014, we appreciate EPA’s recognition that the real importance is to set the program on a clear glide path for 2015 and 2016. The numbers do matter, and utilizing the actual production will be a positive step from what was a proposed. We appreciate how EPA recognized that cutting requirements for advanced biofuels would be a mistake. This emerging industry deserves better considering it has already demonstrated the capacity to generate 3.2 billion gallons of advanced biofuel annually. But, at least EPA’s decision leaves the glass more than half full and allow us to get back on track next year.
BIO President & CEO Jim Greenwood said, “Industrial biotechnology applications once again are recognized in the Presidential Green Chemistry Challenge for their ability to prevent pollution. Today’s award for Solazyme marks the first time that a microalgae biotechnology application has been recognized. Solazyme’s algae oils are a sustainable alternative to petroleum. Likewise, Amyris’ farnesane is a breakthrough renewable hydrocarbon that displaces petroleum in diesel and jet fuels. I congratulate both Solazyme and Amyris on receiving their accomplishments.”
Amyris received the Small Business Award for its design of farnesane, a hydrocarbon building block that can be converted into a renewable, drop-in diesel or jet fuel.
Solazyme received the Greener Synthetic Pathways Award for oils produced through microalgae fermentation. These oils can be tailored to replace or improve upon traditional vegetable oils and petrochemicals.
The Environmental Protection Agency has been handing out the Presidential Green Chemistry Challenge Awards each year since 1996. About a third of the nearly 100 annual awards given were awarded to biotechnology and biobased applications.
According to a new white paper, inaction by the Environmental Protection Agency (EPA) on finalizing the 2014 Renewable Fuel Standard (RFS) rules is increasing greenhouse gas emissions (GHG) equal to 4.4 million additional cars on American roads. The paper, published by the Biotechnology Industry Organization (BIO) updated earlier estimates of GHG emissions due to the proposal to reduce biofuel use during 2014.
Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, said, “During the U.N. Climate Summit this week, the Obama administration is sure to promote the regulatory actions it has taken to reduce climate change emissions from stationary sources such as power plants. But regulatory inaction on the RFS has opened the door to an increase in greenhouse gas emissions from the transportation sector.”
“Last November, EPA proposed a steep reduction in the use of biofuels in order to avoid hitting the so-called blend wall – a proposal the administration still has not finalized,” continued Erickson. “What the agency failed to consider is that demand for transportation fuel has been increasing – the United States is now using several billion gallons more gasoline and diesel than projected. The so-called blend wall is an invention of the oil industry and has simply been a red herring.”
In March 2014, Erickson and coauthors published the study, “Estimating Greenhouse Gas Emissions from Proposed Changes to the Renewable Fuel Standard Through 2022.” That study demonstrated that if EPA reduced biofuel use under the RFS, as the agency proposed in November 2013, the U.S. would experience an increase in greenhouse gas emissions and forego an achievable decrease in emissions.
In the updated white paper uses new data on transportation fuel demand for 2013 and 2014. The U.S. is now projected to use 2 billion gallons more gasoline and 0.5 billion gallons more diesel in 2014 than previously projected.
Erickson concluded, “The administration must finalize the 2014 Renewable Fuel Standard using a methodology based on biofuel production and continue the program’s successful support for commercialization of advanced and cellulosic biofuels. The renewable fuel industry has already created hundreds of thousands of good jobs and boosted economic growth.”
“The People’s Climate March” has received worldwide attention to kick off Climate Week in New York and an ad in the New York Times is asking if President Obama is his own worst enemy when it comes to climate. The ad tells the president that if his administration accepts the Environmental Protection Agency’s proposal to alter the Renewable Fuel Standard (RFS) he “will have inadvertently done more to damage [his] climate legacy than [his] worst enemies.”
The ad warns that the proposal would let oil companies off the hook for blocking competition from American renewable fuels, and prompt an exodus of investment in cellulosic ethanol—the world’s cleanest motor fuel—to China and Brazil.
In the ad, the Advanced Ethanol Council and Biotechnology Industry Organization caution President Obama that investments in additional cellulosic production beyond these four plants will likely shift overseas if the President adopts the flawed methodology of the EPA proposal, regardless of whether he decides to actually raise the renewable fuel targets in the rule. This month, two commercial scale cellulosic ethanol biorefineries came online in Iowa and Abengoa will be hosting a grand opening for its cellulosic ethanol plant in Kansas in October.
More than two dozen advanced biofuel producers have submitted a letter to President Obama today calling on him to reconsider the proposed Renewable Fuel Standard (RFS) rule for 2014. Led by the Advanced Ethanol Council and the Biotechnology Industry Organization (BIO), the groups write: “The RFS is necessary because the highly consolidated, vertically integrated oil industry is not otherwise going to allow market access for renewable fuels”.
The letter continues, “To reduce the 2014 blending requirements and volumes in future years, EPA is proposing to use its general waiver authority based on ‘inadequate domestic supply.’ But EPA is putting forward a novel interpretation of the word ‘supply’ to mean the ability of current infrastructure to deliver renewable fuel blends to consumers, instead of the available supply of renewable fuel to obligated parties. We believe that this new interpretation is inconsistent with the plain meaning of the statute and its legislative history. But the bigger issue is that this interpretation has the practical effect of handing the future trajectory of the RFS to the oil industry by virtue of the fact that the oil industry itself controls the distribution of fuel to consumers.
The threat that oil companies could simply lie down on the RFS to avoid obligations vastly increases supply-chain risk for new projects, as opposed to those already in the ground. Given that more than 90 percent of future blending obligations under the RFS are for advanced biofuels, the Administration’s new methodology would actually scuttle U.S. investment in advanced, low-carbon biofuels in direct conflict with the Climate Action Plan and your Administration’s goals with regard to reducing oil dependence and promoting advanced biorefineries via USDA and DOE programs.
“We are most concerned about the current proposal’s impact on climate change. Our industry has invested billions of dollars in the development and commercial deployment of ultra-low carbon biofuels during your Administration alone. These investments were made based on the expectation that when we succeed, the RFS will be maintained as a mechanism to create a market for our fuels. The current proposal would break that promise by handing the RFS to incumbent industries that want to see it fail. And by any account, the real world alternative to renewable fuels is marginal, high carbon intensity oil,” the letter concludes.
In a keynote speech at the 11th Annual World Congress on Industrial Biotechnology, DuPont Chair and CEO Ellen Kullman said preserving the RFS would ensure regulatory stability for the renewable fuel industry and continue to encourage “private investment from companies like DuPont to create a sustainable bio-based economy.”
“Legislative and regulatory uncertainty has a direct impact on the growth of this industry,” Kullman said. “If the EPA issues an RFS rule with increasing biofuels volumes, supporting a stable regulatory environment, our industry can thrive.”
DuPont has invested heavily in the future of renewable fuels and will soon complete one of the world’s largest commercial-scale cellulosic ethanol biorefineries, set to open in Iowa later this year. DuPont committed over $200 million to the project, which will yield 30 million gallons of cellulosic ethanol per year, produced from corn stalks, leaves and cobs left in fields after harvest.
Kullman attended the BIO World Congress to accept the 2014 George Washington Carver Award, which each year honors one individual in the private sector, government or academia for leadership in using industrial biotechnology innovation.
After EPA reduced the cellulosic biofuel volume for 2013, Monroe Energy challenged EPA’s decision not to reduce the renewable fuel and advanced biofuel volumes by the same or a lesser amount. The Court rejected Monroe Energy’s argument that EPA’s decision served no “statutory purpose,” and reaffirmed Congress’s directive that EPA ensure that U.S. transportation fuel contains at least the volumes provided in the statute. The Court also rejected Monroe Energy’s attempts to revisit decisions about the RFS program that EPA made in earlier years, stating that “the time to challenge that decision has passed.”
The biofuel groups said that today’s decision is a victory for American consumers, renewable fuel advocates, and the RFS program. Once again, they note, the Court has rejected attempts of the anti-biofuel parties to undermine the RFS in court. The RFS is arguably the nation’s most effective energy policy. It has spurred the development of a domestic biofuels industry that is creating hundreds of thousands of jobs that cannot be outsourced. In addition, it is providing environmental benefits, helping to decrease the nation’s reliance on imported oil, and reducing prices at the pump, as Congress intended.
In this edition of the Domestic Fuel Cast, we hear from Growth Energy CEO Tom Buis, Renewable Fuels Association (RFA) president Bob Dinneen, Biotechnology Industry Organization (BIO) Executive Vice President Brent Erickson, and Jon Doggett with the National Corn Growers Association, talking about how they want to rig the debate back to the facts.
Leading biofuel industry groups are opposing a delay requested by petroleum industry in a 2013 Renewable Fuel Standard case.
The Renewable Fuels Association (RFA), Biotechnology Industry Organization (BIO) and Growth Energy together filed a joint response yesterday in the U.S. Court of Appeals for the District of Columbia Circuit in opposition to the American Petroleum Institute’s and American Fuel & Petrochemical Manufacturers’ motion to “sever and hold in abeyance their challenge to the 2013 Renewable Fuel Standard” that was filed on Friday. The case is Monroe Energy, LLC v. United States Environmental Protection Agency, which was argued before the Court on April 7.
As the groups explained in their response to the motion, “Respondent-Intervenors Biotechnology Industry Organization, Growth Energy, and Renewable Fuels Association oppose the motion to sever API and AFPM’s petitions and place them in abeyance. The petitions have been fully briefed, responded to, and argued. No purpose is served by pulling API and AFPM’s petitions back a week after argument, to hold them indefinitely and consolidate them with hypothetical later-filed petitions.”
The Environmental Protection Agency has announced it will halt new petitions for renewable fuel pathways for six months or so. In response, the Biotechnology Industry Organization (BIO) urged the agency to speed up rather than slow down the Petition Process for New Renewable Fuel Pathways under the Renewable Fuel Standard (RFS). The petition process was established in March of 2010 during the process of finalizing the rules for the Renewable Fuel Standard (RFS).
“EPA’s effort to improve the petition process for new renewable fuel pathways under the RFS is welcome. But the agency should aim to complete this review process in a more timely manner,” said Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section. “Advanced biofuel companies need a pathway to the fuel market in order to attract necessary investment to build and start up new production facilities that create new jobs. The lengthy wait for approval of new pathways chills job creation and investment in the sector.”
Erickson noted that in the last four years, the EPA has completed less than half of the 62 petitions it has received for approvals for new renewable fuel pathways. In fact, he said there are 36 petitions are still waiting action with an average wait time of nearly 17 months. Companies filing cellulosic biofuel pathway petitions have faced the longest wait times, an average of 24 months. Erickson said this delay has slowed deployment of new advanced biofuel technologies.
Erickson concluded, “Combined with the proposed rule the proposed delay of the petition process may further undermine the development of advanced and cellulosic biofuels just as they are set to produce millions of commercial gallons and launch a rapid scale up.”
According to Brent Erickson, Executive Vice President of BIO’s Industrial & Environmental Section and lead author of the special report, the proposal from the Environmental Protection Agency could “reverse progress on one of the central goals of the law – reducing climate-changing emissions from the U.S. transportation sector.”
The paper utilizes Energy Information Administration projections of fuel use from 2014 to 2022 to estimate volumes of petroleum and biofuel use for each year. The authors then assigned estimates of greenhouse gas emissions from the GREET1.2013 model to the volumes and added up year-by-year emissions. Based on EPA’s proposed requirements for 2014, the United States would emit 6.6 million more metric tons of CO2 equivalent greenhouse gases than it did in 2013. If EPA followed past practice, allowing the overall requirements to remain at the statutory level, the achieved reduction in GHG emissions would be 21.6 million metric tons CO2e. The difference between the increase and the achievable decrease is equivalent to putting 5.9 million additional cars on the road next year. Under other available options for setting the RFS volume requirements, the United States could still achieve carbon emission reductions, the paper finds.
The letter reads, in part, “The advanced biofuels industry is at a critical stage of development. Despite a difficult financial market, we are now operating commercial plants across the country and continue to make progress on dozens of additional projects in the final stages of development. Advanced biofuel tax credits have allowed the biofuels industry to make great strides in reducing the cost of production and developing first-of-kind technologies to deploy the most innovative fuel in the world.
“As leaders in a critical innovation sector in the United States, we are well aware of the financial constraints facing this country. However, the United States’ global competitors are offering tax incentives for advanced biofuels and in fact are attracting construction of new facilities – and associated high skilled jobs. If Congress wants American companies to continue developing these homegrown technologies in the United States, it must extend these credits. Biofuel producers are also competing with incumbent fossil energy industries who continue to enjoy tax incentives on a permanent basis.”
The letter marks the latest effort by biodiesel and ethanol producers and their backers to get better federal government support for their green fuels. Late last year, the Environmental Protection Agency undercut the industries when it proposed drastic reductions in the amount of biodiesel and ethanol to be mixed into the Nation’s fuel supply. In addition, Washington also let these vital federal tax credits expire at the end of the year.
Signing the new farm bill into law on Friday, President Obama commented that the legislation “supports businesses working to develop cutting edge biofuels” which have the “potential to create jobs and reduce our dependence on foreign oil.” The president also announced a new “Made in Rural America” export and investment initiative “to help more rural businesses expand and hire and sell more products.”
In response, Renewable Fuels Association (RFA) president Bob Dinneen noted the great economic benefit biofuels production has brought to rural America. “Under the Renewable Fuel Standard, the U.S. ethanol industry created and supported over 386,000 jobs in the past year,” said Dinneen. “To build on the success of the Farm Bill, we call on President Obama and the Environmental Protection Agency to protect the RFS and restore the 2014 conventional ethanol requirement to its statutory level.”
During a press call about the benefits of the farm bill for bioenergy, Matt Carr with the Biotechnology Industry Organization (BIO), also pointed out the importance of the RFS. “The Renewable Fuel Standard is really the fundamental policy foundation for the growth of the advanced biofuels industry,” said Carr, noting that BIO submitted comments to EPA regarding the proposal to lower the volume requirements under the law. “That proposal puts at serious risk the investment (our members) have made in advanced biofuels projects.”
“We like to say that the farm bill policy as well as the tax code work hand in hand with the RFS to help accelerate the adoption and deployment of advanced biofuels,” Carr added.
“Renewable chemicals are now defined in the farm bill, an important and long overdue change,” said Matt Carr, BIO Industrial and Environmental Director about that inclusion in the Biorefinery Assistance Program and Biomass Research and Development Program, which had been primarily for advanced biofuel projects.
One of the participants in the call was Hugh Welsh, President of DSM North America, the Netherlands-based company that partnered with POET two years ago on cellulosic ethanol production. “We’ve made significant investments in the United States over the past three years,” said Welsh. “Some of that, in excess of $150 million, has been directly into the biofuels base and we’re encouraged by the inclusion of biochemicals in the farm bill.”
While DSM used its own funds for investment rather than taking advantage of the program, Welsh says it will help others. “We see the loan guarantee program now extended to biochemicals as something that offers greater opportunity for the development of this technology going forward,” in licensing the technology to others and “ultimately creating a true biorefinery.”
Welsh noted that the two technologies will work together. “We’re looking to grow both the advanced biofuels business and the biochemistry business,” he said.
Also participating in the call were Agriculture Energy Coalition co-director Lloyd Ritter, and Renmatix Senior VP Mark Schweiker.