Biodiesel and Biojet News: April 24, 2013

This post summarizes recent news items and other public policy developments 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.

United States


Another perpetrator of fraudulent RINs receives jail sentence. In early April, the head of Absolute Fuels, Jeffrey David Gunselman was sentenced to fifteen years in prison and to pay $55 million in restitution, after pleading guilty last year to the charge of selling fraudulent RINs. This came shortly after  Rodney R. Hailey of Clean Green Fuel LLC was been sentenced to twelve and a half years in prison and monetary damages for RIN fraud.

Dispute arises over waivers of New Mexico biodiesel blending requirement. The New Mexico Petroleum Marketers Association intends to seek a third waiver of a state law that institutes a 5% biodiesel blending mandate in the state. The current waiver, the second granted by the state because of low biodiesel production by in-state companies, expires on April 30, and the state’s Department of Agriculture is considering the request to grant a further waiver. The Renewable Energy Group of Ames, Iowa opposes any further waivers and wants the mandate enforced. As previously reported, in the legislative session that recently ended, the New Mexico legislature rejected proposals to repeal the 5% biodiesel blend mandate.

International


The European Union has announced that it will register larger amounts of imports of biodiesel from Argentina and Indonesia, based on evidence that subsidies given by these countries were “causing material injury to the European Union industry”. The EU has reportedly instituted both anti-subsidy and anti-dumping inquiries against biodiesel imports from these countries, and has already been registering imports from certain Argentine and Indonesian companies under the anti-dumping inquiry. These inquiries were instigated in response to complaints lodged by the European Biodiesel Board, and the European Commission is reportedly considering duties of 28.5-29.5% for Argentinean imports and 35.5-37.5% for Indonesian imports.

It has been reported that senior Indonesian government officials will meet with an EU delegation during the week of April 22, to give Indonesia a chance to respond to the ongoing EU investigations of anticompetitive activities regarding Indonesian biodiesel. Indonesian officials believe that the EU’s findings are based on a misunderstanding, and that the subsidies the government gives to biodiesel are aimed at the domestic market and do not affect the price of biodiesel sold in the international market.

The Argentina Chamber of Biofuels (Carbio) says that the country’s biodiesel industry is running at 40-50% production capacity because of the anti-dumping investigation currently being undertaken by the European Commission. Exports of biodiesel from Argentina to Europe reportedly dropped 50% after the EC opened its investigation. More recently, the Argentinean government announced that it will raise its biodiesel blend mandate from 7% to 10%, effective June 1, 2013. The government says this move was not related to the EU anti-competitive investigations but was instead triggered by a desire to compensate for the effects of a fire at Argentina’s largest oil refinery, which has caused the refinery to operate at half capacity.

In Brazil, According to Biofuels Digest, the fuel regulator ANP was only able to secure 65% of the 750 million liters of biodiesel sought in order to supply the country’s B5 blend. The 488.4 million liters were purchased during the 30th biodiesel auction held earlier this month and are meant for May/June delivery.

Biofuels Digest is also reporting that the environmental coordinator in the Asturias region of Spain is balking at granting approval for a proposed biodiesel plant in the city of Lleu, because economic conditions have idled so many other biodiesel plants around the country.

It has been reported that trading of biodiesel that is compliant with the European Union Renewable Energy Directive (RED) has been complicated in some European countries by purchasers’ insistence that the fuel meet stricter sustainability criteria than required under the RED. Although standards vary across EU member states, in some countries customers are reportedly requiring compliance with the biodiversity criteria of Birdlife International and UNESCO programs to preserve biosphere reserves. Customers in Germany require a certificate from the Nabisy sustainable biomass system, although non-Nabisy biodiesel is acceptable in other parts of Europe such as Italy and the UK.

Biojet and Renewable Aviation Fuels


USDA and FAA extend partnership to promote development of biojet fuel. On April 15, the U.S. Department of Agriculture and the Federal Aviation Administration announced an agreement to continue working together for another five years on a program to promote the development of a viable biobased aviation fuel. This new agreement follows the creation in 2010 of the “Farm to Fly” initiative, initially created by USDA, Airlines for America and Boeing, and a three-year agreement between USDA and FAA to develop aviation fuel from forest and crop residues and other renewable feedstocks. The goal of these programs is to support the annual production of 1 billion gallons of drop-in aviation biofuels by 2018.

Think tank report critical of aviation biofuels released. The Oakland Institute, a California think tank, has issued a report criticizing current strategies for developing renewable aviation fuels from agricultural commodities. The report, entitled “Eco-Skies: The Global Rush for Aviation Biofuel,” concludes that it will require an enormous amount of agricultural land to meet the aviation industry’s goals of greenhouse gas emission reductions by 2050, and that biofuels are a “false solution” to achieve these goals. While criticizing the aviation industry’s reliance on biofuels to reduce carbon emissions, the report does not present a clear alternative other than vague calls for improvements in airplane fuel efficiency, more efficient flight paths, etc. Furthermore, the report sets up a “straw man” by its implicit assumption that the 2050 goals could only be met by the agriculture-intensive technologies existing today (e.g. used cooking oil and oils from palm, Jatropha and Camelina), 37 years before the target date, thus ignoring yield and efficiency improvements as well as the potential impact of emerging technologies such as the use of algae or other photosynthetic bacteria.

Previous Biofuel Policy Watch posts on biodiesel and biojet 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

Biodiesel and Biojet News: April 1, 2013

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.

United States


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.

International


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.

Biojet and Renewable Aviation Fuels


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