A measure that would renew the federal $1-per-gallon biodiesel tax incentive has cleared a congressional committee. The credit, which expired at the end of 2013, passed the Senate Finance Committee as part of a package of tax provisions. The news was welcomed by the National Biodiesel Board, which still appeared miffed it expired in the first place, as Congress let happen in 2010 and 2012.
“This is the third time in five years that the biodiesel incentive has lapsed, making it incredibly difficult for biodiesel businesses to plan for expansion or build infrastructure,” said Anne Steckel, vice president of federal affairs at the National Biodiesel Board, the industry trade association. “We applaud the Senate Finance Committee for taking the first step toward extending it and urge the House and Senate to continue the committee’s bipartisan work by acting quickly to extend this credit so the biodiesel industry can get back to work.”
“The U.S. biodiesel industry has plants in almost every state in the country, and this tax incentive is something Congress can pass today to stimulate growth and economic activity at all of them,” Steckel added. “This incentive is a job creator, and it also pays tremendous dividends in terms of reducing harmful emissions and strengthening our energy security.”
The measure calls for the incentive to be restored retroactively back to Jan. 1, 2014, and extended through the end of 2015.
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.
While yesterday was National Biodiesel Day, our friends at the National Biodiesel Board were not just cutting birthday cake. They were advocating on Capitol Hill for the green fuel. March 18th marks the 156th birthday of Rudolf Diesel, the inventor of the engine that bears his name and a man who wanted it to run on peanut oil, not petroleum. The NBB’s governing board spent the day talking to lawmakers and taking part in meetings in Washington, D.C.
While hearing more about the NBB’s communications efforts, NBB Governing Board Member Tim Keaveney, HERO BX (shown to the right), reviews a selection of the several dozen letters to the editor published to date regarding the Environmental Protection Agency’s proposal to cut drastically the amount of biodiesel required to be blended into the Nation’s fuel supply.
Meanwhile, in this picture on the left, NBB Governing Board members listen to representatives of Bingham McCutchen as they provide an update on litigation related to the RFS.
In a separate news release, while pointing out that the EPA is proposing 1.28 billion gallons of biodiesel to be blended – a sharp drop from last year’s record production in the biomass-based diesel of 1.8 billion gallons – NBB officials made another push for biodiesel.
“Nearly every product that ends up on a store shelf is dependent on diesel fuel to get it there. That heavy reliance on one fuel means our economy is directly linked to petroleum price swings. It’s in everyone’s best interest to have a choice in transportation fuel, and that’s where biodiesel – America’s first Advanced Biofuel – comes in,” said Joe Jobe, National Biodiesel Board CEO.
Yesterday we celebrated the patron saint of Ireland – today it is the patron saint of biodiesel.
National Biodiesel Day is celebrated on March 18, which is the birth date of Rudolf Diesel, inventor of the engine that bears his name. He would be 156 years old today, but he died a century ago last September, disappearing from a ship in the English Channel in an apparent suicide, despite his many accomplishments.
Diesel was only 39 when he introduced the first high-compression prototype engine in 1897, designed to run not on petroleum but on peanut oil. Today, diesel engines are responsible for moving the majority of goods, including electronics, from manufacturer to consumer. But, more than ever those engines are being run on the type of fuel their inventor envisioned.
“National Biodiesel Day is a reminder that diversity in fuel supply means more stable prices and less dependence on a global oil cartel. That benefits the economy, the environment and leaves more opportunities for our future,” said Joe Jobe, CEO of the National Biodiesel Board. “It’s in everyone’s best interest to have a choice in transportation fuel, and that’s where biodiesel – America’s first Advanced Biofuel – comes in.” With plants in almost every state, biodiesel production amounted to nearly 1.8 billion gallons in 2013.
Jobe notes that the EPA proposal to lower the Renewable Fuel Standard (RFS) this year would be a step backward for production, setting the volume requirement at just 1.28 billion gallons. “The biodiesel industry is asking the Administration to revise the biodiesel proposal so that it is at least consistent with last year’s production,” he said. Rudolf would probably agree.
“We applaud the Air Resources Board for recognizing the need to reduce carbon from transportation and fossil fuels to mitigate climate change,” said Don Scott, National Biodiesel Board Director of Sustainability, who was present at the workshop. “Since America’s Advanced Biofuel, biodiesel, is among the most effective tools for carbon reduction this represents a major step forward. We are hopeful the agency will continue on this path to use the best science to quantify the benefits of biodiesel.”
According to NBB, the proposal “recognizes biodiesel’s sustainability and environmental benefits, takes a notable step in the right direction, and will open new avenues for biodiesel use in the state.”
During the workshop, Scott made several comments and observations about the preliminary findings presented by CARB. “I think CARB is on the right track with improving these models to quantify those economic impacts that ripple through the world and impact food production,” he said at one point in the meeting. “The biodiesel industry was not thrilled initially about the idea of indirect land use change because our goals have always been to do what we can domestically without impacting food, either in prices or availability.” But, he says the iLUC models actually show that is true when it comes to biodiesel. Don Scott, NBB comments during CARB Workshop
Confidence in the identification numbers for the government’s Renewable Fuel Standard (RFS) is key to the growth in biodiesel. This article from Biodiesel Magazine says the National Biodiesel Board-backed Genscape RIN (Renewable Identification Number) Integrity Network is helping keep up the confidence that those record-breaking biodiesel production numbers are legit.
Genscape provides U.S. EPA preregistered [quality assurance plans] QAP services and a number of other RIN integrity, RFS and low carbon fuel standard services to more than 40 renewable fuel producers, obligated parties, and midmarketers across three continents.
QAP has translated into increased RIN value for Genscape producers. QAP provides additional value not just for producers with smaller balance sheets or for producers who are new to the industry, but also for larger, well-established producers. In one example, a longstanding biodiesel producer looked to Genscape to provide RIN integrity guidance and proof of RIN assurance to two new buyers. This is an indicator that buyers are starting to rely more on third-party RIN integrity, like QAP, even for larger, more well-established producers.
Using Genscape QAP, producers are making sure they’re getting the best prices for RINs, able to secure longer-term deals, grow their buyer base, and meet the increasing demand for QAP RINs in counterparty agreements.
Commodity Classic is the annual meeting that attracts more than 7,000 corn, soybean, wheat and sorghum farmers, but it’s also a great place to find biodiesel and ethanol producers. Joe Jobe, CEO of the National Biodiesel Board (NBB) says they make sure to connect with their allies from the commodity groups, especially those soybean growers.
“Biodiesel is made from a variety of feedstocks, but soy has always been the predominant feedstock for biodiesel and will be going forward,” he says, although corn oil from ethanol plants and animal fats have been making their mark in the green fuel as well. “The soybean leadership has really created the roots for biodiesel, and we still come to connect with our soybean farmer friends and leaders and talk about the status of biodiesel.”
And there was plenty to talk about at Commodity Classic when it comes to biodiesel. The double-whammy of the Environmental Protection Agency (EPA) proposing to cut in half the amount of biodiesel to be blended into the Nation’s fuel supply and the expiration of the $1-a-gallon federal biodiesel tax credit has made for plenty of conversations. Joe is really perplexed at the cut to the share of biodiesel in the Renewable Fuels Standard (RFS) considering how biodiesel is able to make up a lot possible shortfalls from cellulosic and blend wall issues facing ethanol.
“Biodiesel filled virtually the whole advanced biofuel pool, not just the biomass-based diesel pool. And because biodiesel has been so successful, the advanced biofuel goals have been met or exceeded every single year of the [RFS, despite] other advanced biofuels not coming online as quickly as hoped,” Jobe says.
The soybean growers Jobe and his folks have been able to connect with at Commodity Classic have been big allies in the push to get the RFS levels restored, but he’s also seeing help coming from corn growers who obviously have a bigger stake in what happens to ethanol but are pushing to keep the RFS as it was intended because of how it lifts all biofuels. He’s optimistic all of their efforts will be successful. “We have to believe the EPA is going to do the right thing, because the right thing is so easy and so obvious,” said Jobe.
The cutting edge of innovation was certainly on display at the recent National Biodiesel Conference & Expo in San Diego. Among the many innovations was a University of Kansas graduate student, who, with a little financial assistance from the folks at the Kansas Soybean Commission (KSC), talked about a new use for the biodiesel by-product, glycerin.
Derek Pickett … was part of the Next Generation Scientists for Biodiesel (NGSB) program that aimed to educate and collaborate with young scientists.
Pickett presented his findings about using glycerin for power generation during a conference session specifically designed for student-scientists to share their cutting-edge research. Glycerin is a byproduct of biodiesel production, with each gallon of biodiesel producing about 1 pound of glycerin. His research found glycerin that is converted to a synthetic gas has the potential to be an inexpensive source of power.
“Kansas soybean farmers are excited to see young scientists so enthusiastic about research related to biodiesel, which can be made from our crop,” said Dennis Gruenbacher, Andale, who represents the commission’s south-central district. “Those students already are working hard to find even more opportunities for biodiesel to benefit America’s environment and energy security.”
This year, the National Biodiesel Board’s NGSB program brought 36 students from 18 universities to the conference, with 18 of them received scholarships from state soybean organizations and USB. Last month’s gathering also marked the new session that focused solely on university biodiesel research.
Canada’s largest biodiesel producer has gained an important quality status. This news release from Great Lakes Biodiesel Inc. says the company received BQ-9000 Producer status, the highest level of industry recognized quality assurance, from the National Biodiesel Accreditation Commission (NBAC).
“Achieving BQ-9000 Producer status is just one of many goals we achieved in an effort to continuously provide our customers with the highest quality product and services” said Thomas J. Guzek, Chief Marketing Officer of Great Lakes Biodiesel. “ Our Great Lakes Team is a highly experienced and dedicated group that worked very diligently to achieve this outstanding accreditation. “We are proud to be a part of the BQ-9000 process. Most importantly, we know BQ-9000 accreditation means consistent, efficient production and supply of high quality fuel to help address the growing renewable energy demands both in Canada and US”
BQ-9000 is a cooperative and voluntary quality-assurance program administered by the National Biodiesel Board (NBB) for the accreditation of producers and marketers of biodiesel fuel. This unique program addresses requirements of the ASTM standard for biodiesel, ASTM D6751, within a structured quality system that controls storage, sampling, testing, blending, shipping, distribution, and fuel management practices. Certification is awarded following a successful formal review and audit of the applicants Quality System documentation, followed by a formal audit of the applicants conformance to its System.
Great Lakes Biodiesel Inc.’s Welland, Ontario facility is the largest biodiesel plant in Canada producing 45 million gallons per year of ASTM 6751 quality biodiesel.
Senators Maria Cantwell (D-WA) and Charles Grassley (R-IA) have introduced a bill to extend the expired biodiesel tax incentive for three years. The bill, S. 2021, would extend the tax incentive until 2017.
In response to the bill’s introduction, the National Biodiesel Board (NBB) called on Congress to move swiftly on the tax legislation.
“On behalf of biodiesel producers across the country, we want to thank Sens. Cantwell and Grassley for their leadership on this issue,” said NBB Vice President of Federal Affairs Anne Steckel. “The biodiesel tax incentive has expired three times over the past five years, and each time it has severely disrupted production. By comparison, we know that at least $4 billion in incentives encouraging domestic petroleum production are built into the tax code. We need that same kind of stability for younger, cleaner industries like biodiesel and renewable diesel to compete.”
“This incentive clearly stimulates production and creates jobs at biodiesel plants across the country, and we urge the leadership of both parties to quickly take up this bill to ensure that we can continue the momentum that the biodiesel industry built last year with record production of almost 1.8 billion gallons,” Steckel added.
The $1-per-gallon incentive covers biodiesel, renewable diesel – a similar diesel alternative made with a different technology – and renewable aviation fuel. First implemented in 2005, it expired on Dec. 31, 2013. It also was allowed to lapse in 2012 and 2010. The bill would extend the tax incentive until 2017, providing the tax certainty the industry needs to gain access to capital and plan for production expansions and additional hiring.
“We see your support as an investment in our future,” the co-chairs said in their formal comments. “As scientists, we can contribute to the sustainable growth of biodiesel and make it an even more valuable product for the nation’s fuel supply. Cutting the RFS will weaken our career prospects by introducing undue risk into the biodiesel industry.”
The comments went on to say, “Why do we strongly support renewables? Among other reasons, the process of petroleum and natural gas extraction entails drilling far into the ground, using a number of undisclosed chemicals and questionable methods, all the while hoping that the chemicals will not contaminate groundwater and endanger the public. In contrast, biofuels facilities are installed close to their feedstock sources; directly contribute to the growth of the local economies in which they exist; and operate with a much higher degree of environmental safety and responsibility.
“The RFS has been a highly successful piece of legislation thus far and we hope that you will allow it to continue to function as such moving into the future,” the comments concluded. “Our greatest hope is that the United States will remain the top producer of biofuels among any country, consistent with our tradition of excellence, creating opportunities for youth, and leading the world by example.”
The four co-chairs of NGSB include Bernardo del Campo, Iowa State University; Dan Browne, Texas A&M University; Deval Pandya, University of Texas – Arlington; and Morgan Curtis, Dartmouth College.
Students from across the country took advantage of this year’s National Biodiesel Conference and presented their research to gain feed back and awareness of the biodiesel industry. This opportunity also allowed them to network with fellow researchers and learn more about the biodiesel community.
Chuck met up with three of the young people and they shared what sparked their interest in biodiesel and what their research has consisted of. All three were really excited to see how respective the professionals they presented to were to their new ideas and research.
They also committed about the opportunity to met and ask questions from other fellow students who attended the event. Peer review is an essential part of these in-depth research studies.
It is easy to say that many of the promotional opportunities we see from the biodiesel industry wouldn’t be possible without the Biodiesel Foundation. During the 2014 National Biodiesel Conference the foundation was hard at work to raise money in order to increase awareness.
Beth Calabotta, Vice President of the Biodiesel Foundation, shared with Chuck in an interview that their goal is to work to promote biodiesel education, infrastructure and awareness.
“We promoted a sustainability tour where we brought a lot of policy makers and their support staff out to see farms in Iowa and biodiesel plants. They really got a feel for what the renewable fuels industry is. We have co-hosted a tour of some environmental groups from California who had never been to a farm before and actually see how biodiesel is made. We have also been sponsoring some educational studies at Purdue University aimed at really understanding what this indirect land use change is and really improving the science.”
The Foundation has a very wide variety of people on it’s board, including producers, farmers and many others involved and passionate about the industry. Those interested in doing their part and contributing to the Biodiesel Foundation can do so at www.BiodieselFoundation.org.
Kevin shared that if we don’t move past what RFS has already provided then we become stuck and the innovation stops. He says everyone needs to do what they can to ensure the investments continue and technologies are utilized. He feels the government has given mixed signals and believes simple education on the issue could help.
“The Renewable Fuels Standard (RFS) itself is vitally important to my operation at home and to my neighbors. Not just from the farming side, but also from the livestock side. Especially, operations like mine in western Iowa where we can utilize the fats and add value back to the livestock. I am not sure how many people know that its even possible. Let alone be done on an industrial scale. Agriculture is about value-added. Creating markets in those new economies within a broader ag industry is what it is all about.”
Kevin goes on to discuss what types of precision agriculture they have taken advantage of on his operation.
“On our farm it has been a fast ramp up of precision technology. Just a couple years ago on our own farm we’ve gone to auto steer. I couldn’t plant straight rows if I tried. We also use single row shut-offs and it has been a huge plus for us. Overall newer equipment is more efficient with yield monitors and data that we collect. We are going into a new soil data collection phase on our farm which is an entirely new way of doing it then before. We have made major advancement in the recent years and profitability in ag and RFS have really had a huge role in making that possible.”
Commodity groups across the country also took interest in the happenings at the recent National Biodiesel Conference. Frank Legner, Legner Farms is a member of the Illinois Soybean Association and attended the conference to relay the update on biodiesel to growers in Illinois. He talks about how he uses precision agriculture on his farm where they grow 50/50 soybeans and corn.
“With the high prices of commodities in the years previous farmers have used their capital in many different ways. Our farming operation decided to put our capital towards technology. Where we farm you could have about four different soil types on a piece of land and those soil types all have different productivity indexes that have been benchmarked from the University of Illinois. We use those soil maps as a good foundation of how we are going to come up with a plan. We soil sample on two and a half acre grids and when we make these sample sites we overlay them on our SMS advance desktop software to make sure that sample site is in one soil sample. When we get the readings from the lab, we use that to write our VRT recommendations.”
They can then compare results from previous years and start selecting what hybrids will work in each field. Frank said it is kind of like a draft. The multiple hybrid planting is something that he sees them utilizing in the very near future as well.
Frank also shared that colors don’t mix when you are dealing with this level of technology. He shared that precision planting has been the best way for them to use their green planter with their red tractor. Legner Farms has truly adopted the use of technology to create efficiency and increase profitability. He goes on to explain how they have taken advantage of different precision ag company’s innovations and looks forward to seeing what’s next.