This post summarizes news items and other public policy developments over the last few months relating to use of biomass-derived diesel (“biodiesel”) as a motor vehicle fuel. I’ll plan to update such news periodically, to include not only biodiesel but also news about other biofuels (other than ethanol or butanol), including novel aviation fuels produced from renewable feedstocks.
New Mexico retains its biodiesel blend requirement. In its 2013 session, the New Mexico legislature rejected proposals to repeal the state’s requirement that diesel fuel sold in the state include a 5% biodiesel blend. According to the National Biodiesel Board, New Mexico is one of just seven states with legislation requiring a minimum amount of biodiesel to be blended in the transportation diesel fuel supply. This move was hailed by the biodiesel industry, although it has also been reported that this B5 requirement, first enacted in 2006, has never been enforced due to a lack of biodiesel production capacity within the state.
Arkansas considers biofuel tax credit. A bipartisan group of state legislators has introduced SB 933 into the Arkansas legislature to create a 10-cent per gallon fuel production tax credit for alternative fuel producers in the state. The bill would reportedly benefit two large biodiesel producers already located in the state. The law would take effect on January 1, 2014 if approved. The bill’s sponsors note that neighboring states already provide incentives for biodiesel production in their states, with Mississippi granting a production tax credit of 20 cents per gallon for alternative fuels, Texas exempting biodiesel from the state tax on diesel fuel, and with Oklahoma, Kansas, Missouri, Iowa, Illinois, and Kentucky also providing significant financial incentives for biodiesel production. The Arkansas bill is currently pending before the Senate Committee on Agriculture, Forestry and Economic Development.
Iowa biodiesel industry seeking exemption from pending gas tax increase. The Iowa legislature is seriously considering raising the state’s gasoline tax, and the state’s biodiesel industry is advocating that fuels containing a higher biodiesel blend than the currently common 5% mix qualify for an exemption from this potential tax increase. The Iowa Biodiesel Board is reportedly lobbying for the state to adopt a B10 biodiesel mandate by 2022.
RIN Quality Assurance Programs. Several independent companies are creating quality assurance plans (QAPs) to offer RIN validation services in accordance with pending EPA regulations. EPA’s proposed regulations setting the standards for RIN validation programs (described in an earlier entry in Biofuel Policy Watch) were created in response to several highly-publicized instances in 2012 of companies selling obligated parties fraudulent RINs not corresponding to actual volumes of renewable fuel. EcoEngineers of Des Moines, Iowa, partnered with Great Lakes Biodiesel, has received EPA approval for its proposed QAP program. In a February press release, Genscape says is the first service provider preregistered by the EPA to provide a QAP program for A-RIN and B-RIN assurance. Under EPA’s proposed rules, in validating RINs as A-RINs, the QAP provider must provide financial backing to replace those RINs if they later become invalid.
Perpetrator of fraudulent RINs receives jail sentence. In a related story, Rodney R. Hailey has been sentenced to twelve and a half years in prison and ordered to surrender profits and pay restitution to twenty energy companies who purchased fraudulent RINs from Hailey’s company Clean Green Fuel LLC.
Canada ending its biofuel subsidy program. According to the Toronto Globe and Mail, the Canadian government has decided to end its ecoEnergy program that has provided subsidies to ethanol and biodiesel producers. The newspaper reports that Natural Resources Minister Joe Oliver said in a late February letter to a Canadian industry group that “The government will not redesign or reopen the ecoEnergy for biofuels programs to new applicants,” citing budgetary constraints as the reason. Reportedly, the government has already granted $672 million in subsidies to ethanol and biodiesel producers planning or building plants, and plans to continue providing subsidies under existing commitments through 2017, at an estimated further cost of $1 billion. The Minister’s letter was apparently critical of the country’s biodiesel industry for failing to produce as much renewable fuel as promised. This decision apparently does not affect the country’s existing fuel regulations that require a 5% ethanol blend in gasoline and a 2% biodiesel component in the nation’s diesel supply.
Ecuador has announced that its B5 biodiesel blend mandate will take effect in May 2013. Reportedly, this mandate will increase over time to a B10 requirement.
U.S. FAA and Spain to cooperate on aviation fuels. The U.S. Federal Aviation Administration (FAA) and the Spanish Aviation Safety and Security Agency (AESA) signed a Declaration of Cooperation in February to promote the development and use of sustainable alternative aviation fuels in the United States and Spain. The declaration calls for exchanges of ideas and know-how, collaboration on projects of mutual interest, and other activities to promote the development of sustainable alternative jet fuels.
Previous Biofuel Policy Watch posts on biodiesel policy:
D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels.