RFS Uncertainty Chills Advanced Biofuel Funding

biologoA new analysis from the Biotechnology Industry Organization (BIO) finds delays in rulemaking for the Renewable Fuel Standard (RFS) have chilled necessary investment in advanced and cellulosic biofuels.

According to the analysis, the industry has experienced an estimated $13.7 billion shortfall in investment over the past two years as the Environmental Protection Agency has delayed setting volume obligations for biofuels under the RFS.

(EPA) was nine months late issuing the 2013 RVOs and is more than 17 months late in issuing the 2014 rule. Further, the agency has made cellulosic biofuel producers wait an average of 29 months (more than two years) for approval of production pathways. Currently, 29 companies have unresolved petitions filed with EPA and they have been waiting on average more than 32 months for resolution. A majority of an estimated $13.7 billion shortfall in investment for cellulosic and new advanced technologies should therefore be attributed to EPA’s delays in issuing timely rules.

Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, notes that the situation came about just as plants were beginning to reach the commercial stage. “The chill in investment has had the heaviest impact on cellulosic biofuel developers,” said Erickson. “The delays in rulemaking have also undercut the industry’s ability to create new employment opportunities, resulting in the loss of more than 80,000 direct jobs.”

According to BIO, the industry has invested more than $5 billion in first-of-a-kind demonstration and commercial-scale biorefineries around the world. The analysis finds that as of April 2015, there are five commercial cellulosic biorefineries with a combined capacity of more than 50 million gallons within the United States and registered to meet the goals of the RFS, along with several pilot and demonstration plants. Additional commercial biorefineries are under construction.

Iowa Gov, Lt Gov to Tour Cellulosic Ethanol PLant

QCCPsyngentaQuad County Corn Processors (QCCP) and Syngenta will host Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds for a tour of the cellulosic ethanol production facility in Galva, Iowa, Tuesday, April 21. The QCCP plant is the first commercial cellulosic ethanol production in the state.

QCCP recently passed the 1 million gallon milestone for cellulosic ethanol production using Cellerate™ process technology. Cellerate is a collaboration between Syngenta and Cellulosic Ethanol Technologies, LLC, a wholly owned subsidiary of QCCP. Cellerate process technology is designed to increase an ethanol plant’s production by allowing the corn kernel fiber to be converted into cellulosic ethanol. With Cellerate, the biofuels industry now has the technology available to create 2 billion gallons of additional cellulosic ethanol – all from corn already being processed.

Think Tank Ponders Cellulosic Ethanol Link

3rd-wayA new report from centrist think tank Third Way ponders the quest for cellulosic biofuels and concludes that the pathway is via corn ethanol.

This report confirms what the biofuels industry has been saying for some time now – that you cannot have cellulosic ethanol without the continued production and support of grain-based ethanol,” said Growth Energy CEO Tom Buis.

One of the takeaways from the Third Way report is that, “proposals to reform the Renewable Fuel Standard (RFS) would discourage engagement from the corn ethanol industry” and thus delay commercialization of cellulosic ethanol and steer investment overseas.

Renewable Fuels Association (RFA) president Bob Dinneen says the report highlights the importance of consistent policy for the continued evolution of biofuels. “Legislative efforts to undermine either will set the nation’s energy and economic future back generations,” said Dinneen. “Third Way should be commended for adding a thoughtful component to this ongoing discussion and I can only hope that it is read with interest by Senators Feinstein and Toomey.

“(T)he biggest point, coming from a thought leader in the space like Third Way, is that Congressional intervention on the RFS would be highly detrimental to the deployment of cellulosic biofuel,” said Brooke Coleman of the Advanced Ethanol Council.

“The success of the conventional ethanol industry has driven serious investment in the cellulosic industry and there is an important linkage between them,” says Adam Monroe, President Americas for Novozymes which produces enzymes used for cellulosic ethanol production. “Tinkering with the corn portion of the RFS now will only hurt both industries.”

The report also concludes that “companies with an extensive background in the corn ethanol industry are cracking the cellulosic code,” and continued investment from these companies in facilities and innovation is critical to growing U.S. cellulosic capacity.”

EPA Changes Cellulosic Waiver Credit Provisions

epa-150The Environmental Protection Agency (EPA) issued final rulemaking this week to clarify the data sources and methodology used to calculate the Cellulosic Waiver Credit (CWC) price.

Under the rule, EPA has calculated the CWC prices for 2014 at $0.49 and for 2015 at $0.64. According to the EPA document, “The price of CWCs are determined using a formula specified in the Clean Air Act (CAA). The cellulosic waiver credit price is the greater of $0.25 or $3.00 minus the wholesale price of gasoline, where both the $0.25 and $3.00 are adjusted for inflation.”

The direct final rule also amends the regulations to remove the CWC prices from the code of federal regulations allowing them to be announced in a more timely fashion on EPA’s website.

Partnership Accelerates Cellulosic Ethanol

nec15-cellerateAt the National Ethanol Conference last week, the Renewable Fuels Association (RFA) presented Quad County Corn Processors (QCCP) with the RFA 2015 Industry Award for the development of a process that led to the plant producing the very first gallons of cellulosic ethanol last year.

Cellerate process technology is a collaborative effort between Syngenta and QCCP’s subsidiary company Cellulosic Ethanol Technologies LLC that QCCP licenses to other ethanol plants. Cellerate, which was previously known as the Adding Cellulosic Ethanol process, was invented by QCCP plant engineer Travis Brotherson, pictured here with Jack Bernens of Syngenta.

I talked with Travis and Jack about what Cellerate can do for the industry as a whole and individual plants in this interview: Interview with Quad County Corn Processors and Syngenta

2015 National Ethanol Conference Photo Album

RFA Presents Ethanol Industry Awards

The Renewable Fuels Association (RFA) honored industry leaders during the 20th annual National Ethanol Conference in Grapevine, Texas this week.

nec15-awardBob Reynolds, president of Downstream Alternatives, received a Lifetime Appreciation Award for his role in the expansion of ethanol in today’s transportation fuel market.

Presenting the award, RFA CEO Bob Dinneen said Thompson spent his entire professional career working on fuel quality issues. “When he founded Downstream Alternatives, he did so to make sure that as renewable fuels, like ethanol, were introduced to the market, consumers would see no degradation in product quality,” said Dinneen.
2015 RFA Lifetime Award, Bob Reynolds

During his career, Reynolds authored numerous studies on the transportation and logistics of oxygenated fuels and was deeply engaged in projects involving fuel blending, product quality assurance, and terminal operations. In his nearly three and a half decades of working with the RFA, Reynolds had a hand in nearly every aspect of the downstream portion of the fuels industry. The ethanol industry continues to benefit from his work in developing fuel standards and technical guidelines for auto manufacturers and his ability to find common ground within the oil and automotive industries.
Interview with Bob Reynolds, RFA Award Winner

nec15-quad-awardIn recognition of their achievements in advancing the use of cellulosic ethanol technology, RFA presented Delayne Johnson and his Cellerate team at Quad County Corn Processors (QCCP) with the 2015 Industry Award.

“Delayne and his team have worked tirelessly toward making the production of cellulosic ethanol a reality,” said Dinneen. “The company helped officially kick off a new era, not only for the company but for the entire biofuel industry, when it opened its 2-million-gallon cellulosic bolt-on facility in Galva, Iowa, last September. Their breakthrough technology reflects their leadership in the industry and their commitment to innovation.”

Cellerate process technology is a collaborative effort between Syngenta and QCCP’s subsidiary company Cellulosic Ethanol Technologies LLC that QCCP licenses to other ethanol plants. Cellerate, which was previously known as the Adding Cellulosic Ethanol process, was invented by QCCP plant engineer Travis Brotherson.

2015 RFA Industry Award, Quad County Corn Processors

Cellerate process technology is a collaborative effort between Syngenta and QCCP’s subsidiary company Cellulosic Ethanol Technologies LLC that QCCP licenses to other ethanol plants.

2015 National Ethanol Conference Photo Album

New President for POET-DSM Joint Venture

POET DSM logoPOET-DSM Advanced Biofuels has announced that Dan Cummings will serve as first president for the joint venture.

“Dan has more than 25 years of experience in the energy sector, and we’re excited to have him leveraging that knowledge to grow cellulosic ethanol production for the world,” said Jeff Lautt, Chairman of the POET-DSM Board. “We look forward to Dan taking the reins and leading this joint venture into 2015.”

cummingsCummings, who previously served as President and Director of INEOS New Planet BioEnergy, will oversee day-to-day operations of POET-DSM, represent the joint venture publicly, and coordinate functions between the parent companies. He will also act as the central point of contact for external relations, which includes all technology licensing activities for POET-DSM worldwide.

“This joint venture has already proven it can change the world, and I look forward to working with the individuals who helped make that happen,” Cummings said. “After two decades in the energy and clean tech sectors, I’m excited to start this new journey with POET-DSM.”

POET-DSM announced the startup phase in September for its 20 million-gallon-per-year cellulosic ethanol plant, which will later ramp up to 25 million gallons per year. The Emmetsburg, Iowa plant, dubbed “Project LIBERTY,” uses corn cobs, leaves, husk and some stalk to make renewable fuel. The joint venture is now marketing its LIBERTYTM Technology package to third parties for continued energy development.

Sorghum for Cellulosic Ethanol Update

While corn stover might be the big talk recently in the cellulosic ethanol game, sorghum could emerge as an alternative to the feedstock for the advanced green fuel. During the recent American Seed Trade Association CSS 2014 and Seed Expo in Chicago, Leah Guffey caught up with Scott Staggenborg of Chromatinasta-css-14-chromatin, a sorghum genetics company, and they talked about using sorghum for cellulosic ethanol.

“People forget that many of sorghum’s original uses were for animal feed, so biomass yield is important and digestability is important,” said Staggenborg. “So if you think about cellulosic ethanol production, it’s just really a big, steel or concrete digester, rather than a four-legged digester.”

He went on to say that with the 40,000 varieties of sorghum availability, his company is taking advantage of traditional breeding and modern molecular methods to get the most out of sorghum, especially for cellulosic biofuels. One of the breeds he points to as having great potential for biofuels is sweet sorghum, which he compares to an annual sugarcane, except sorghum has to re-established each year from seed.

“It’s high biomass, and it has high juice yields, as well as high sugar yields,” Staggenborg explained. “Those three combined result in high sugar yields per acre, and that’s the goal of our breeding program, as well as altering the composition of the sugar itself.”

He added that the Renewable Fuels Standard is a big driver in making sure there is a market for sorghum-based, or any other feedstock-based, cellulosic biofuel.

“The RFS establishes a market, establishes a need, sort of primes the pump for the demand, until it becomes something that widely available, although it’s already widely accepted, and allows a fledgling industry to move forward.”

You can hear all of Leah’s interview with Scott here: Scott Staggenborg, Chromatin

DF Cast: Bundling Biomass for a Cellulosic Future

As cellulosic ethanol plants are opening up across the country, those facilities need a way to get the feedstocks, while farmers need a way to get that biomass to those new refineries. That’s where Pacific Ag comes in.

In this edition of the Domestic Fuel Cast, we talk to CEO Bill Levy and Steve Van Mouwerik, Vice President of Operations for Pacific Ag, as they talk about how their custom field residue business, which started in 1999 for baling crop residues for animal feeding operations, is a good fit for the emerging cellulosic industry, as Pacific Ag is demonstrating at Abengoa’s cellulosic ethanol biorefinery in Kansas that went online this past October and is expected to produce 25 million gallons of advanced ethanol per year.

Hear more about it here: Domestic Fuel Cast - Bundling Biomass for a Cellulosic Future

PacificAg Can Help Ethanol Plants Go Cellulosic

pacificag-logoThe largest and most experienced biomass harvest company in the country wants to help ethanol plants develop or expand operations into the production of cellulosic ethanol by saving time and money on supply chain development. PacificAg, which is already supplying biomass for plants in Iowa and Kansas, enables cellulosic biorefineries the ability to source cost-competitive biomass for biofuel and biochemical production.

PacificAg started in the residue management business nearly 20 years ago harvesting forage crops for feed in Oregon and CEO Bill Levy says they have expanded to meet the needs of the growing biofuels industry in the Midwest.

pacificag-harvest“We can save an ethanol plant the time and money in developing a supply chain,” says Levy. “It’s a very specific supply chain with very specific challenges and I think we have a lot of experience overcoming these challenges and developing these supply chains quicker than anybody else.”

Biomass products include corn stover, wheat straw and milo stover products because of their abundance and supply. “What we’ve found in the Midwest is that not all growers are accustomed to removing this supply,” says Levy, stressing that a major component of their suite of services includes a balanced residue management program.

There are two critical elements an ethanol plant must consider when ramping up cellulosic ethanol production: year round biomass supply and sustainability around biomass residue harvest.

Harrison Pettit, a company partner who works with ethanol plants to help them get their biomass programs off the ground, notes that market needs for advanced biofuels industry are long-term and year round. “Ethanol plants are built to operate for more than 30 years.”

How does a grower know if he or she should participate in a biomass residue harvest program? Pettit says the first question to ask is, Are you within 100 miles of a cellulosic ethanol facility? “If you are a corn grower, wheat grower or milo grower, then you really ought to give us a call,” says Pettit. “If you really want to learn about how a residue management program can benefit your ground and benefit your bank account, then we want to talk.”

Learn more about PacificAg and the services they offer for both farmers and ethanol plants in these interviews with Levy and Pettit.
Interview with PacificAg CEO Bill Levy
Interview with PacificAg partner Harrison Pettit

Leifmark, New Holland Bale Stover for Ethanol

leifmark-new-holland-1Baling corn stover is part of the next generation of cellulosic ethanol, and two major players in the green fuel and agribusiness markets are moving that process forward. Leifmark, LLC and New Holland Agriculture recently teamed up to test equipment and methods used to gather, bale, and store the corn stover left behind after the grain harvest in two Iowa cornfields.

Paul Kamp, Leifmark’s Chicago-based partner, coordinated the 520-bale collection. “Using local specialists and best practices, we showed stover harvesting on area farms is very practical. That’s good news for three ethanol producers now considering new businesses making cellulosic ethanol from biomass.”

Developing more efficient methods and equipment brings down the overall cost of stover, says Kamp, whose company markets Inbicon Biomass Refinery technology in North America.

“Couple lower stover prices with a predictable supply chain,” adds Kamp, “and you reduce risk perceptions with biomass. So future plant owners can feel confident putting their capital into cellulosic ethanol projects.”

New Holland Agriculture’s Scott Wangsgard emphasizes that “technology companies like Inbicon have certain specifications for corn stover bales. To meet them, we’ve been designing specialized equipment that also boosts collection efficiencies.”

New Holland used a high-capacity baler and automated bale wagon that picks up, transports, and stacks the 3′ x 4′ x 8′ square bales required for Inbicon’s refining process. Officials say the square bales handle more easily than round ones, store in much less space, and pack tighter so flatbed trucks can haul more tonnage per trip.

POET-DSM Commends Partners in Cellulosic Ethanol Venture

POET DSM logoPOET-DSM is commending its partners in a cellulosic ethanol venture. This company news release says POET is praising Suomen Bioetanoli Oy and the government of Finland after the Finnish government announced a 30 million euros grant to Suomen Bioetanoli Oy to build a plant that will convert wheat straw into about 24 million gallons of ethanol annually.

“Suomen Bioetanoli Oy is taking a bold step forward in growing Europe’s bioeconomy and expanding our sources for transportation fuel,” said Rob van Leen, Chairman of the POET-DSM Board. “Additionally, the grant award shows Finland’s firm commitment to growing sustainable energy production. Our joint venture partners look forward to working with Suomen Bioetanoli Oy to make commercial cellulosic bioethanol a reality in Finland.”

POET and DSM are in discussions with Suomen Bioetanoli Oy on how to utilize process, yeast and enzyme technology from the respective companies for the conversion of cellulose to ethanol.

Deck Stacked Against Ag and Biofuels in Report

bpcThe Bipartisan Policy Center (BPC) appears to be a bit partisan in a new report released this week on “Options for Reforming the Renewable Fuel Standard.”

The report was produced after several meetings during the year with an advisory group that consisted of 23 members, seven of which were oil companies representatives. Only five members of the group represented agriculture or advanced biofuels and biodiesel producers. The rest were a mix of academia (2), big business (4) with two of those representing Toyota, environmental groups (2), and policy organizations (3).

Both of the agriculture representatives were from the National Farmers Union (NFU), president Roger Johnson and vice president of programs Chandler Goule. “It was very important that agriculture that supports the renewable fuels industry be present at the table,” said Goule, who said the meetings were held in a very professional manner. “The problem with the meetings is that they were heavily skewed toward big oil.”

NFUlogoThe report concluded that improvements to the RFS are needed, but did not recommend actual repeal of the law. Goule says NFU has major objections to two of the policy recommendations made in the report. “The flattening of the total renewable fuel mandate at its current level going forward, but continuing to increase the three advanced categories, we have significant concerns about what that would to do ethanol and biodiesel,” he said. “Even more concerning was removing the total renewable fuel mandate and only mandating the three advanced categories. Basically what they are doing is giving in to Big Oil’s conclusion that a blend wall exists, which it does not.”

Chandler talks more about the BPC report in this interview: Interview with Chandler Goule, NFU

Seeds of Cellulosic Ethanol

asta-css-14-dupontLike all good things, cellulosic ethanol starts with the seed.

During a presentation at the American Seed Trade Association CSS 2014 and Seed Expo last week in Chicago, John Pieper with Dupont Industrial Biosciences talked about the importance of seed to the cellulosic ethanol industry. “It has everything to do with seed because it has to do with farming,” he said. “It has to do with making our lands and soils more productive as well as being able to realize the full potential of seed and other crop inputs that we have today that are hindered because of tillage and crop rotation practices.”

Using non-food agricultural products to make ethanol also provides economic benefits for farmers on several levels. “By taking stover and converting it from an agricultural landfill, waste product, into a recycled or used by-product, we get more money back to the farm operation to invest in tools and production practices – and we get a better seed bed for their next crop to be prolific and highly productive,” said Pieper.

Pieper talked about what Dupont is doing in the cellulosic ethanol field. “We’ve been operating a demonstration facility in Vonore, Tennessee for the last four years and for over two years we’ve taken corn stover from central Iowa down to the plant and made transportation fuel-grade ethanol from it,” he said. Now they are preparing to open a commercial facility in Nevada, Iowa next year and Pieper says they were pleased to see Abengoa and POET open their first plants this year. “It’s a very exciting time,” he said, but he does note that stable government policy – including the Renewable Fuel Standard – is key to moving forward in the future.

Listen to my interview with Pieper here: Interview with John Pieper, Dupont Industrial Biosciences


2014 ASTA CSS & Seed Expo photo album

Senate Passes Tax Extenders

senateFollowing the recent action by the U.S. House of Representatives, the Senate on Tuesday evening passed the package of tax incentives for 2014 that will expire once again in just two weeks.

For the renewable energy industry, the legislation includes the second-generation biofuel production tax credit and the accelerated depreciation allowance for cellulosic biomass properties, as well as tax credits for alternative fuel vehicle refueling infrastructure, alternative fuel mixtures, and wind energy and the dollar-per-gallon Biodiesel Tax Incentive.

Renewable Fuels Association
(RFA) president Bob Dinneen says the temporary extensions are a step in the right direction, but called on Congress to provide more certainty in the future. “These incentives can help to level the playing field in a tax code that is overwhelmingly tilted toward incumbent fuels and established oil extraction technologies,” said Dinneen. “Congress should be commended for helping businesses and consumers alike. But next year is a whole new ball game and in order to balance the scales and make future tax incentives truly helpful, Congress must take a good hard look at overarching tax reform legislation.”

Noting the short term nature of the legislation, Senate Finance Committee Chairman Ron Wyden said, “With this tax bill, the Congress is turning in its tax homework 11 months late…The legislation accomplishes nothing for 2015.”

The bill now goes to the president who is expected to sign it.