Here’s an update on recent news items and other public policy developments relating to the U.S. Renewable Fuel Standard (RFS), and the efforts to produce commercial quantities of cellulosic biofuels which qualify to generate Renewable Identification Numbers (RINs) under the RFS.
EPA proposes to voluntarily reconsider 2011 cellulosic fuel mandate. On April 3, the EPA filed a motion in the U.S. Court of Appeals asking the Court to allow the agency to voluntarily reconsider the mandated 2011 volumes for cellulosic biofuels under the RFS. As previously reported, the 2011 mandate has been challenged by a coalition of groups led by oil company trade associations, and in a separate case, the Appeals Court vacated EPA’s 2012 cellulosic fuel mandate. All parties to the pending lawsuit over the 2011 mandate are reportedly in favor of EPA’s motion, which is expected to lead to a decision by the agency to retroactively set the 2011 mandate to zero.
Trade associations, companies comment on EPA 2013 mandates, RFA breaks ranks. The public comment period on EPA’s proposed 2013 RFS volume mandates closed earlier this month, with almost 50 public comments received, including comments from several companies and trade associations within the biofuel industry. Although most of the industry commenters supported EPA’s proposed target of 14 million gallons of cellulosic biofuel, the Renewable Fuels Association called for EPA to reduce this mandate to better correspond to the actual volumes of cellulosic fuel that are expected to be produced by companies later this year. RFA, along with the American Coalition for Ethanol, also highlighted the “advanced biofuels” mandate as favoring importation of Brazilian sugarcane ethanol at the expense of domestic production. RFA called for EPA to partially reduce the advanced biofuels volume mandate.
January 2013 RINs. EPA has reported that over 44 million advanced biofuel (D5) RINs and 1.03 billion renewable fuel (D6) RINs were generated in January, most of which were attributed to ethanol. All of the renewable fuel RINs were generated domestically (most likely predominantly corn ethanol) while all but 3 million of the advanced biofuel RINs were generated overseas (with the imported fuel most likely dominated by Brazilian sugarcane ethanol). Similar (but slightly lower) figures have been released for RIN generation in February, including about 32 million D5 RINs and 937 million D6 RINs. No RINs for cellulosic fuels have yet been generated this year in the months reported to date.
Studies say RIN prices have not caused rise in gasoline prices; but may trigger other market shifts. Several studies or other online reports have appeared in recent weeks to refute the allegation that the recent spike in the price of corn ethanol RINs was a factor in rising gasoline prices. These include an analysis conducted by Informa Economics commissioned by the Renewable Fuels Association, an analysis of two University of Illinois economists, and an opinion piece written by Marshall Kaplan, an adviser to the Fuel Freedom Foundation. In a separate development, the U.S. Energy Information Administration, in its April Fuels Outlook issue, predicted that the high prices of ethanol RINs and the expected drawdown of banked RINs would stimulate E85 sales by lowering its price relative to E10, and also create increased incentive for biodiesel blending. Meanwhile, it has been reported that D6 ethanol RIN prices rose in early April to the highest levels since the price spike in March: prices on April 8 were reportedly $0.80/gallon for 2012 RINs and $0.86/gallon for 2013 RINs.
New Congressional bills opposing RFS. On April 10, Representative Bob Goodlatte (R-Va.) and several cosponsors introduced two bills that would substantially alter the U.S. Renewable Fuel Standard. One bill, H.R.1462, would amend the RFS to eliminate the requirements for corn ethanol under the renewable fuel program, and also prohibit the EPA from approving the sale of gasoline that contains greater than 10% ethanol. The other bill, H.R.1461, would simply repeal the RFS in its entirety. The introduction of these bills triggered the predictable responses from both sides of the renewable fuels debate, including strong statements of opposition from groups representing the renewable fuels industry.
Wyden to examine RFS and impact on gas prices. Senator Ron Wyden (D-Ore.), the chair of the Senate Energy and Natural Resources Committee, has voiced his skepticism about whether the volume mandates of the RFS can be met. At a public meeting held April 12, Sen. Wyden indicated that he intended to hold hearings later this spring on the RFS and its impact on gasoline prices. Wyden, who is characterized as a supporter of the RFS, had also recently asked EPA for market data relating to volatility in ethanol RIN prices.
International Energy Agency reports on cellulosic biofuel capacity. The International Energy Agency has issued a 207-page report entitled “Status of Advanced Biofuels Demonstration Facilities in 2012,” which reports that global capacity for cellulosic biofuel production has tripled since 2010. According to a published summary, the IEA report describes 71 actively pursued projects for commercial production of advanced biofuels, with current capacity for cellulosic fuels at approximately 140,000 metric tons per year. The report can be downloaded here.
New market report on cellulosic ethanol. A newly-published market report by the consulting firm GlobalData estimated that global cellulosic ethanol production would rise from 14.25 million gallons in 2012 to 412.25 million in 2020, and that the U.S., currently the market leader with over 5 million gallons produced in 2012, would retain its lead through 2020. This report is available for purchase from GlobalData.
Previous Biofuel Policy Watch posts on RFS policy:
- March 25, 2013: Renewable Fuel Standard News
- February 28, 2013: Renewable Fuel Standard News
- February 12, 2013: Renewable Fuel Standard News
- February 1, 2013: EPA’s 2013 Proposed Rules under the RFS
- January 25, 2013: Appeals Court Ruling on Cellulosic Volume Mandate
- January 15, 2013: RFS Issues and Controversies Part 2
- January 14, 2013: RFS Issues and Controversies Part 1
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.