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.
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