EPA RFS Proposal Would Stymie a Surging Advanced Biofuels Sector

While much attention has been given to the hit corn ethanol will take under the EPA proposal to reduce in 2014 the amount of biofuel to be blended in the nation’s fuel supply under the federal Renewable Fuel Standard (RFS), advanced biofuels face what could be a fatal blow before the sector has a chance to meet the high goals Congress envisioned when it reauthorized the RFS just six short years ago.

When a bipartisan Congress adopted and President Bush signed into law the Energy Independence and Security Act in 2007, policy makers envisioned the incorporation of 36 billion gallons of renewable fuels being blended into the nation’s fuel supply by 2022. Of that, more than 21 billion gallons would come from “advanced” biofuels, so designated to note they have at least 50 percent fewer greenhouse gas emissions (GHGs) than their petroleum-based equivalents.

EISA called for a gradual increase of these cleaner burning fuels to be added each year, reaching a modest but achievable 2.75 billion gallons this year. However, the EPA proposal, which is subject to a 60-day public comment period, would reverse the progress being made by this innovative renewable fuel sector, shrinking the advanced biofuel requirement down to 2.2 billion gallons in 2014.

The proposed cutback sends a chilling message to the farsighted enterprises that have invested some $14 billion into the development of next-generation biofuels, including cellulosic ethanol. And that investment is being made because of the policy certainty provided by the RFS.

While the development of cellulosic biofuels has not met the expectations set by EISA, the industry is on the verge of a breakthrough. Three major cellulosic production facilities using agricultural residues and other non-food feedstocks are set to open next year, two in Iowa and one in Kansas. Smaller plants are operating in Florida and Mississippi. There are a number of advanced biofuel operations in California using algae as a feedstock that are on the brink of commercial production.

All of these facilities and the research that will lead to a wave of advanced biofuels that can reduce emissions by 60 percent or more when compared to fossil fuel equivalents, however, are left in a vulnerable position by an EPA proposal that slashes the market just as the sector is ready to take off.

Any effort to diminish the market potential for advanced biofuels runs counter to Obama administration efforts to take on a changing climate because oil companies would be allowed to blend fewer advanced biofuels, leading to even more GHGs.

The advanced biofuel number also includes biodiesel, which will easily reach a 2013 target of 1.28 billion gallons. The industry is on track to produce 1.7 billion gallons of biodiesel this year and had expected an equivalent increase in the RFS target in 2014. Unfortunately, the EPA proposal would hold biodiesel at 1.28 billion gallons again next year, a move that would stymie the industry and cost what the National Biodiesel Board says would be some 8,000 industry-supported jobs.

Recently, Brent Erickson, executive vice president of the Industrial and Environmental Section at the Biotechnology Industries Organization (BIO) noted that over the past five years, the RFS has opened up the transportation fuel market, and while encouraging domestic investments and rapid commercialization of advanced biofuels, has triggered research and development that has “given birth to biotech innovations for renewable chemicals and other biobased products.”

The 25x’25 Alliance strongly believes that the EPA proposal would essentially close the market to advanced renewable fuels, undermine investment and starve the innovative biofuels companies of the capital needed to bring these new technologies to the American consumer.

The obligation to address and demand that EPA withdraw this shortsighted proposal goes beyond renewable energy stakeholders. It is the responsibility of all who seek more choices in transportation fuels along with a cleaner and more secure U.S. energy future to let EPA know that its proposal endangers the very path to that future.

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