Biofuel Groups Oppose RFS Delay Request

Leading biofuel industry groups are opposing a delay requested by petroleum industry in a 2013 Renewable Fuel Standard case.

Dont Mess with RFSThe 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.”

BIO Calls on EPA to Approve New Biofuel Pathways

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.”

alamo_switchgrass_2Erickson 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.”

BIO Report Says Lowering RFS Will Increase GHG

biologo2A new white paper from the Biotechnology Industry Organization (BIO) finds that lowering the volume requirements for biofuels under the Renewable Fuels Standard (RFS) as proposed by the administration will lead to an increase in emissions of greenhouse gases next year.

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.

Read the report here.

Biofuel Organizations Call for Tax Credits Extensions

US Capitol at dusk photo Joanna SchroederLeaders from several biofuel trade organizations are calling for the extension of some federal advanced biofuel tax credits. The Advanced Ethanol Council, Advanced Biofuels Association, Algae Biomass Organization, Biotechnology Industry Organization, Growth Energy, National Biodiesel Board, and Renewable Fuels Association have sent a letter to the Senate calling for the restoration of the Second Generation Biofuel Producer Tax Credit, the Special Depreciation Allowance for Second Generation Biofuel Plant Property, the Biodiesel and Renewable Diesel Fuels Credit, and the Alternative Fuel and Alternative Fuel Mixture Excise Tax Credit.

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.

Both Farm Bill and RFS Important

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.”

RFA-logo-13In 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.

Farm Bill Biofuel Benefits

BIOlogoJust as President Obama was preparing to sign the Agricultural Act of 2014 into law today, the Biotechnology Industry Organization (BIO) held a media conference to highlight how expansion of the new farm bill’s energy programs to include renewable chemical technologies can help advanced biofuel producers.

“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.

dsm-welshOne 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.

Listen to or download the call here: BIO farm bill call

Biofuel Groups Ask to Intervene in RFS Case

Three organizations that represent biofuel producers have asked to intervene in the latest legal challenge to Renewable Fuel Standard (RFS).

mess-rfsThe Renewable Fuels Association (RFA), Growth Energy, and the Biotechnology Industry Organization (BIO), filed a motion Friday with the U.S. Court of Appeals for the District of Columbia Circuit to intervene in the challenge against the RFS by Monroe Energy, the American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers (AFPM). The lawsuit seeks a reduction of the 2013 volume obligations for all renewable fuels.

The groups are asking the Court’s permission to intervene in this lawsuit on behalf of member companies which would be directly impacted by that action. “Moreover, a reduction in the volumetric requirement for any one type of renewable fuel under the RFS could affect the demand for other types of renewable fuels,” the groups stated in the filing.

In January, the same court upheld EPA’s authority to set advanced and cellulosic biofuel volume obligations at the maximum achievable level, in order to achieve Congress’ intent to promote production and use of renewable fuels. The trade groups will ask the Court to reaffirm this finding.

BIO Tells EPA to Just Say No to Big Oil’s RFS Waiver

biologo2Big Oil is trying to get out of its obligations under the Renewable Fuels Standard (RFS), but an organization with close ties to the biofuels industry is calling on the government to stand its ground. The Biotechnology Industry Organization (BIO) is asking Environmental Protection Agency (EPA) Administrator Gina McCarthy to reject the recent petition from American Petroleum Institute and American Fuel and Petrochemical Manufacturers for a waiver of the 2014 volume obligations under the RFS. In an 11-page letter to the EPA, Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section said that Big Oil already enjoys great flexibility in planning and choosing how it will comply with the RFS, shooting holes in the petroleum industry’s argument that compliance would hurt the U.S. economy.

“BIO urges the EPA to deny the joint petition for several reasons. First, the petitioners do not meet the requirements to file the joint petition. The joint petition is also premature. The petitioners cannot demonstrate harm when the 2014 renewable volume obligations (RVOs) have not even been formally proposed.”

Erickson continues the 11-page letter, writing:

“The reality is that because they have blocked investment in infrastructure and created marketing challenges for higher blends of biofuels, the petitioners are now requesting the Administrator waive the 2014 RVOs to 9.7 percent of the domestic fuel supply. They created the very situation from which they are requesting relief.”

Erickson outlined the options Big Oil has, including accumulating Renewable Identification Numbers (RINs) to meet its 2014 RFS RVOs. And he says “while some individual refiners may choose to restrict U.S. fuel supply as a compliance strategy, market competition and the increasing production of biofuels will work in tandem so such a restriction will not harm the U.S. economy or consumers.”

Erickson concludes saying that the oil companies have had five years to prepare for the 2014 obligations but chose not to, mostly to protect their monopoly on energy.

“The petitioners and their members should not be rewarded for these efforts.”

EPA Proposes RFS Amendments

The Environmental Protection Agency has announced proposed Renewable Fuel Standard (RFS2) amendments and clarifications, which include new pathway determinations for advanced biofuels such as isobutanol and ethanol from crop residues.

epaThe EPA proposal also includes “various changes to the E15 misfueling mitigation regulations (E15 MMR) which are minor technical corrections and amendments to sections dealing with labeling, E15 surveys, product transfer documents, and prohibited acts” as well as changes to the survey requirements associated with the ultra-low sulfur diesel (ULSD) program.

EPA is proposing to allow renewable diesel, renewable naphtha, and renewable electricity (used in electric vehicles) produced from landll biogas to generate cellulosic or advanced biofuel RINs. Renewable compressed natural gas (CNG)/liquified natural gas (LNG) produced from landfill biogas are also proposed to generate cellulosic RINs. EPA is also proposing to allow butanol that meets the 50% GHG emission reduction threshold to qualify as advanced biofuel. The rulemaking also proposes a clarication regarding the definition of crop residue to include corn kernel ber and proposes an approach to determining the volume of cellulosic renewable identication numbers (RINs) produced from various cellulosic feedstocks. Further, this proposal discusses and seeks comment on the potential to allow for commingling of compliant products at the retail facility level as long as the environmental perfor­mance of the commingled fuels would not be detrimental. The action also addresses “nameplate capacity” issues for certain production facilities that do not claim ex­emption from the 20% GHG reduction threshold. Several other amendments to the RFS program are included.

“This proposed rulemaking package is essentially a collection of ‘housekeeping amendments’ that will address several odds and ends that needed to be addressed in the regulatory text,” commented Renewable Fuels Association president and CEO Bob Dinneen. “We are pleased that among these proposed amendments is a provision clarifying that ethanol produced from the cellulosic portions of the corn kernel can qualify as cellulosic biofuel under the RFS2.”

“Companies continue to make investments, put steel in the ground, create jobs and develop technologies that reduce dependence on foreign oil and contribute to a cleaner environment,” said Brent Erickson, executive vice president of the Biotechnology Industry Organization’s (BIO) Industrial & Environmental Section. “They are preparing to make additional investments with assurance that U.S. policy is committed to energy security and production of biofuels.”

The proposal has been submitted to the Federal Register for public comment.

Industry Supports Reconsidering Cellulosic Target

A coalition of biofuel producer organizations the reconsideration of the 2011 cellulosic obligation under the Renewable Fuel Standard (RFS).

In January 2013, the U.S. Court of Appeals for the D.C. Circuit ordered the Environmental Protection Agency (EPA) to reconsider the 2012 Renewable Fuel Standard obligation for cellulosic biofuels. EPA has implemented the Court’s order and is now voluntarily reconsidering the 2011 obligation for cellulosic biofuels, which is the subject of a separate lawsuit before the Court.

In a joint statement, organizations that make up the Biofuel Producers Coordinating Council, noted that the “RFS was established to open the U.S. transportation fuel market to renewable fuels, and it ensures that the market remains open as cellulosic biofuel production starts up. The program has worked. Advanced biofuel companies across the United States have invested in technology development and construction of first-of-a-kind commercial scale refineries for cellulosic and other advanced biofuels. EPA’s implementation of the Court order does not impact the industry’s progress in developing technologies that reduce dependence on foreign oil and contribute to a cleaner environment.

The industry remains focused on starting up production this year and increasing it in years to come. We look forward to working with EPA to establish 2013 targets that are consistent with expected production volumes this year from the facilities that have already been built.”

Intervenors in the case included the Advanced Biofuels Association (ABFA), Advanced Ethanol Council (AEC), American Coalition for Ethanol (ACE), Biotechnology Industry Organization (BIO), Growth Energy, and Renewable Fuels Association (RFA).

Advanced Biofuel Orgs Set Record Straight

The American Petroleum Institute (API) is currently engaging in an all-out attack on the Renewable Fuel Standard (RFS) and the advanced biofuel industry is continuing to fight back. Last month, the Court ordered the Environmental Protection Agency (EPA) to reconsider the cellulosic biofuels obligations. In response, API is pressuring the EPA to actually zero out the 2012 obligation, according to a letter sent to EPA Assistant Administrator Gina McCarthy.

feb 2013 gas prices copy Photo Greg BollThis is in odds with what API send in its brief to the Court, that the number should not be zero. “EPA’s projection should not be unrealistically low, but it also may not be unrealistically high.” API also claimed to the Court that its members paid $17 million in compliance costs for the RFS, when public records available at the time showed the true cost to be a fraction of that amount.

In response to the letter, Brooke Coleman, executive director of the Advanced Ethanol Council (AEC) said the cellulosic biofuel industry has facilities under construction or starting up in 20 states. “API’s strategy on the RFS is simple: create as much uncertainty and doubt around the program as possible to scare off investors from advanced biofuels. They have lost 10 percent of their market share to domestically produced renewable fuels to date, and they are not going to let the truth stand in the way of their efforts to short-circuit this incredibly successful program.”

According to a statement from the biofuels industry, API is decrying the new EPA proposal to blend 14 million gallons of cellulosic biofuels in 2013, saying the fuel does not exist. In reality, the industry says, EPA’s targets are based on production capacities of plants that are already built. The advanced biofuel industry is asking the EPA to follow the Court’s direction and remain consistent in its implementation of the program’s rules.

Brent Erickson, executive vice president of the Biotechnology Industry Organization’s Industrial & Environmental Section, added, “API is trying to re-litigate in the press the issues it lost in court. The Court recognized EPA’s authority to administer the rules for the RFS, and EPA should reject this attempt to spin that decision.”

“It is interesting that just as reputable companies such as DuPont, INEOS, POET-DSM, and Abengoa are actually getting steel in the ground and building commercial cellulosic biorefineries, API is turning on the crocodile tears and ramping up gross distortions in a desperate and foolish effort to derail American biotech innovation for new and cleaner transportation fuels. They want to strangle the infant cellulosic biofuel industry in the cradle in order to keep Americans captive consumers of high-priced foreign oil,” concluded Erickson.

BIO, Fuels America Talk 2013 RFS

As the ethanol industry awaits what the U.S. Environmental Protection Agency (EPA) will release for targets for this year’s Renewable Fuels Standard, members of the Biotechnology Industry Organization (BIO) and Fuels America expressed their support for the green fuel.

ericksonBIO‘s Executive Vice President, Brent Erickson, said today in a news conference that they are expecting EPA’s release of the 2013 renewable volume obligations, very soon, calling them “vitally important to companies commercializing advanced biofuels,” and this is expected to be a pivotal year for cellulosic and advanced biofuels.

“Stability in the RFS is crucial to investment [in the advanced biofuels sector],” Erickson explained, adding that “competing industries” would like to preserve their long-standing choke-hold on the fuel market in this country. “While other industry groups are spending large amounts of money to undermine or destabilize the RFS, it’s time for Congress to reaffirm its commitments to this successful policy.”

Standlee2Christopher G. Standlee, Executive Vice President, Abengoa Bioenergy, said that the road to commercialization of any new technology is not short or inexpensive, but the RFS “provides a roadmap to increased energy independence and national security, with a long-term vision for the U.S. fuel industry through 2022.” He also highlighted Abengoa’s efforts in the Midwest to be on the leading edge of the new technology, citing its 25 million gallon cellulosic ethanol plant in Kansas under construction and expected to be running by the end of the year.

robeyOthers on the news conference called the RFS a bold, aggressive vision, with Wade Robey, a board member of POET-DSM Advanced Biofuels, saying Congress took the leap of faith without having the commercialization of cellulosic ethanol in place when it was passed. “It is clear [the EPA's] volume targets have been optimistic; however, it is that optimism that has spurred many projects to be under construction and coming online soon across the United States. It has sped the development of this clean, domestic energy source,” prompting even foreign investors to jump into U.S. production, Robey said.

koninckxJan Koninckx, Global Business Director for Biorefineries, DuPont Industrial Biosciences, said America is now leading the world in renewable fuels because of the RFS. And he warns that abandoning this successful policy is not the way to go. “When we listen to those who want to repeal the RFS, what we hear is essentially an industry organization that wants the United States to turn its back on new technology … and keep the [U.S.] dependent on a 20th century technology. Turning our backs on innovation is certainly not in the tradition of the U.S. or the company that I am with.”

Listen to all of their opening remarks here: BIO/Fuels America News Conference

Ethanol Industry Pleased With Tax Extensions

Very early this morning the American Taxpayer Relief Act of 2012 was passed that included several one-year biofuel tax extensions including the Cellulosic Producer Tax Credit. While the ethanol industry was pleased with the bill, they remain outspoken that the biofuel industry needs a long-term federal commitment – not just one year.

aeclogoBrooke Coleman, Executive Director of Advanced Ethanol Council responded to the passage of the bill. “The advanced ethanol industry commends President Obama and the 112th Congress for extending the cellulosic producer tax credit and accelerated depreciation allowance as part of the American Taxpayer Relief Act of 2012. Just five years after the passage of the amended Renewable Fuel Standard (RFS), the cellulosic biofuels industry is breaking through at commercial scale.”

Coleman continued, “The one year extension will allow those projects coming online to continue development while Congress acts more broadly to reform the U.S. tax code to allow new players in the energy space to compete on a level playing field with oil and gas. We look forward to working with the Obama Administration and the next Congress to ensure that we continue to grow the next generation of biofuels right here in the United States.”

Growth_Energy_logo-1In addition to the Cellulosic Producer Tax Credit, the package included the Alternative Fuel Infrastructure Tax Credit. Tom Buis CEO of Growth Energy noted that by extending the Alternative Fuel Infrastructure Tax Credit to retailers through 2013, “Congress has also taken a critical step to bring E15 to the marketplace, “providing a choice and savings to the consumer. Furthermore, this provision will help decrease our addiction to foreign oil and help the renewable fuels industry break through the blend wall.”

“However,” added Buis, ” by only extending them for one year, Congress failed to provide the necessary certainty for investors and businesses to plan for the long term, which is imperative for continued stability and growth.”

Despite extension of one-year only, there were still some achievements with the second generation biofuel producer tax credit and the special allowance for second generation biofuel plant property. The Act, says the Biotechnology Industry Organization (BIO), will incentivize both cellulosic and algae biofuel production with the renewal of the $1.01 per gallon tax credit for producers, accelerated depreciation for newly constructed facilities during 2013 and modifying these credits to include algae. Continue reading

BP Continues Biofuels Backout

BP is continuing its biofuels backout with the announcement that it is abandoning its $300 million cellulosic project in Highlands County, Florida. This is the second major announcement of the company moving away from the production of renewable energy. Last December, the company exited the solar business. According to an interview with Matt Hartwig in the Washington Post, the company will continue to focus its U.S. efforts on research and development and licensing its technology.

“Ethanol is not something a lot of people are interested in investing money in,” said Mark Schultz, an analyst at Northstar Commodity Investment Co. in Minneapolis, to the Post. “Corn-based ethanol hasn’t been profitable for about a year. BP is seeing that this isn’t the right street to go down anymore.”

Many advanced biofuels players responded to the news today including Brooke Coleman, the executive director of the Advanced Ethanol Council. “BP has been reallocating its resources when it comes to biofuels for some time. BPs’ decision today signals a move by that company away from that particular project. This happens all the time in the oil, gas, and biofuel industries. As BP pulls back in Florida, the first movers in the space continue to move forward with commercial projects in more than 20 U.S. states. We are expecting first commercial gallons of cellulosic ethanol to come online by the end of the year, which is a tremendous accomplishment in this economic climate.”

Many of the 20 companies mentioned by Coleman are members of the Biotechnology Industry Organization (BIO) Continue reading

NRC Releases Algae Sustainability Report

This week, the National Research Council (NRC) released a new report, “Sustainable Development of Algal Biofuels in the United States.” The report was a result of a request from the Department of Energy, Office of Energy Efficiency and Renewable Energy’s (DOE-EERE) Biomass Program.

The purpose of this study was to identify and anticipate potential sustainability concerns associated with a selected number of pathways for large-scale deployment of algal biofuels; discuss potential strategies for mitigating those concerns; and suggest indicators and metrics that could be used and data to be collected for assessing sustainability across the biofuel supply chain to monitor progress as the industry develops. In addition, NRC was asked to identify indicators that are most critical to address or have the greatest potential for improvement through DOE intervention as well as to suggest preferred cost and benefit analyses that could best aid in the decision-making process.

Ultimately, the report found that scaling up the production of biofuels made from algae to meet at least 5 percent, or approximately 39 billion liters, of U.S. transportation fuel needs would place unsustainable demands on energy, water, and nutrients. However, these concerns are not a definitive barrier for future production, and innovations that require research and development could help realize algal biofuels’ full potential.

The Biotechnology Industry Organization (BIO) today welcomed the report and noted that mitigation strategies are currently being developed to reduce energy, water and nutrients needed to convert algae to biofuels.

Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, said, “While the National Research Council catalogued and prioritized every potential environmental and resource challenge for the development of algae biofuels, their report correctly concludes that the industry has developed or is developing sustainable strategies to overcome these challenges. Biotechnology will continue to play a crucial role in the improvement of the productivity and economic viability of algae biofuels and other advanced biofuels that are cleaner, safer and healthier than petroleum-based fuels.”

Erickson added, “The potential benefits of developing algae biofuels – which include reducing reliance on foreign oil and contributing to a healthier economy by deploying U.S. technology – warrant continued research, development and commercial development of algae biofuels.”