EU Parliament Adopts Revisions to Proposed Amendment to the Renewable Energy Directive

On September 11, 2013, the European Parliament held its vote on proposed amendments to the EU’s Renewable Energy Directive (RED) and its companion legislation the Fuel Quality Directive (FQD). This amendment, first proposed in October 2012, has been the subject of considerable debate and controversy, as well as spirited debate by several EU parliamentary committees. The Parliament adopted the amendment with a number of revisions, although the path to final enactment of the new provisions is far from clear, with final adoption not expected until 2014 at the earliest.

The Renewable Energy Directive was put in place in 2009 to ensure that all EU member states achieve specified targets for use of renewable fuels and reduction of greenhouse gas (GHG) emissions across all energy sectors, with specific requirements for the subset of fuels used for transportation. These targets are to derive 20% of overall energy consumption, across all sectors, from renewable sources by 2020, to derive 10% of energy consumption within the transport sector from renewable sources by 2020, and to achieve greenhouse gas emission reductions of at least 35%, relative to fossil fuels, by mid-2010, with this target rising to 50% in 2017 and 60% in 2018 for fuels produced in 2017 or later. The Fuel Quality Directive has additional, complementary requirements for GHG reductions within the transport sector. (Note that European Union legislation takes the form of “Directives”, which are adopted centrally by the European Commission and which are binding upon all EU member states, which must then adopt national laws that conform with the provisions of the directive). I’ve described these directives in more detail in an earlier post on my Advanced Biotechnology for Biofuels blog.

On October 17, 2012, the European Commission (EC) announced a proposed directive that would amend both the RED and the FQD. The complete text of the proposed amendment can be found here. I described the October 2012 proposal in an earlier post on Biofuel Policy Watch. In making this proposal, the EC made clear that the driving force behind the proposed revision was the growing belief by some observers in Europe that the overall carbon footprint and environmental impact of biofuels derived from food crops like corn were not favorable, and by general concern over the “food vs. fuel” issue and the impact of biofuel production on land use. The press release also stresses the desire to promote the development and use of second generation biofuels, which are presumed to have more favorable carbon intensities and environmental impacts.

The key components of the original proposal were as follows (see my earlier post for more details).

  • A proposed 5% cap on the amount of food crop-derived biofuels used to meet the EU’s goal of meeting 10% of transport energy usage with renewable fuels by 2020.
  • Multiple counting of credits for second-generation biofuels: that is, that, when calculating a member state’s progress towards meeting the 10% goal, the contribution of certain listed biofuels would be counted as doubled and others on the list counted as quadrupled.
  • A 60% greenhouse-gas-saving threshold that will apply to new biofuels production plants coming online on or after July 1, 2014.
  • A review of policy and scientific evidence on indirect land use change (ILUC), which will take place in 2017, coupled with a requirement for mandatory reporting by fuel producers of the indirect land use that could possibly result from their process.

This proposal generated a substantial amount of discussion and criticism in the months that followed. Some of the early reactions were summarized in my original post. I have covered some of the ongoing discussion in several “International Biofuel News” updates on this blog, including posts of March 6, 2013, April 3, 2013, and May 6, 2013. As reported in a May 21, 2013 post, the proposal was reviewed by several committees of the EU Parliament, and differing views emerged about the cap for food-derived fuels, the policies on ILUC, and the strategies for promoting the use of advanced biofuels. The EU’s Environment Committee ultimately proposed a 5.5% cap on food-derived fuels and the Industry Committee proposed a 6.5% cap for food derived fuels. The idea also emerged of having a separate target for advanced biofuels, nested within the overall 10% target by 2020.

On September 11, 2013, the Parliament approved the proposal as revised by a significant number of amendments, by a vote of 356-327. A complete listing of the amendments adopted by Parliament are available here. The following is a very brief summary of the key points.

  • Retains the current goal of 10% renewable fuels for the whole transport sector in each member state by 2020.
  • Sets the goal of 7.5% renewable fuels in petrol (gasoline) in each member state by 2020.
  • Sets a limit of 6.0% for the extent to which food-derived fuels could contribute to the 10% target. This limit applies not only to fuels derived from food crops, but also to “other energy crops grown on land”.
  • Sets separate targets for the use of advanced biofuels in the overall transport sector at 0.5% by 2016 and 2.5% by 2020.
  • Revised how certain advanced biofuels would be eligible for multiple counting, by creating three categories.
    • Group A, where feedstocks are from certain food-derived wastes and residues, would count for only 1x their energy content, but would be eligible to be counted towards the 2.5% target for advanced biofuels.
    • Group B: where feedstocks are from cooking oil or animal fats, would count for 2x their energy content, but would not be counted towards the advanced biofuels target.
    • Group C: including fuels derived from algae or bacteria, along with fuels derived from waste carbon dioxide streams as feedstock, would count 4x their energy content and be eligible to be counted towards the 2.5% advanced biofuels target.
  • Requires the EU to develop by June 30, 2016, data and methodology to take ILUC into account, and to report this to the Parliament by December 31, 2017.

From here, the proposal must be debated and approved by the European Council, the body made up of the heads of government of all 28 EU members. However, according to at least one press report, a motion in Parliament to proceed to this step failed to pass, which apparently means there must be a second reading before Parliament before the measure can be passed along to the EU Council. This could delay final adoption of the measure until next year, perhaps even after the scheduled May 2014 EU elections.

Reaction to Parliament’s action was (predictably) mixed. Many environmental groups and other NGOs were critical (often in sharp rhetoric) of the decision to raise the cap on food-derived fuels to 6 percent from the originally proposed 5 percent. Even within the industry, the response was somewhat mixed – while most industry spokesmen praised the adoption of the separate target for advanced biofuels, there was also concern expressed from within the traditional ethanol community over the fact that there was any cap at all for food-derived fuels. And most industry commenters opposed the inclusion of ILUC accounting in the proposal. With the extended timeline for final adoption of this amendment, we can count on these debates to continue in the media and other public forums.

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’ regulatory affairs 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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International Biofuel News: May 21, 2013

Here’s an update on recent news items and other public policy developments in recent weeks relating to the development and commercialization of renewable fuels around the world.

European Union Renewable Energy Directive


European Parliament continues debate on RED revisions and indirect land use change. As debate on the proposed revisions to the Renewable Energy Directive continued in the EU Parliament Environment Committee in May, it is clear that member states are divided on aspects of the proposal, particularly regarding the approach to indirect land use changes (ILUC).  While some member states strongly support the inclusion of ILUC in calculating the carbon intensity of fuels under the policy, the representatives of other nations question whether such calculations are exact enough to be used in this way. The Environment Committee is scheduled to vote on the proposal on July 10, with a vote by the full Parliament expected in November.

The opposing sides of this debate seem to mirror two competing proposals from EU Parliament Committees for how the proposed October 2012 revision should be amended. The Committee on the Environment, Public Health and Food Safety, in a Draft Report issued April 15, recommended mandatory accounting for ILUC as a means to promote use of biofuels having a more favorable carbon intensity, although it also recommended a “grandfathered” grace period for current producers of biodiesel. The Rapporteur for this Committee is Corinne Lepage, a liberal French MEP who also led the recent Parliamentary debate mentioned above.  Several weeks earlier, however, the Parliamentary Committee on Industry, Research and Energy (known by the acronym ITRE) published a Draft Opinion on March 28, which suggested a different approach. This Committee proposed eliminating all references to ILUC in the RED revision, stating that ILUC calculations were based on “imprecise” science. The ITRE Committee also proposed that the use of advanced biofuels be promoted through mandatory targets of 2% usage by 2020 and 4% usage by 2025, in lieu of the double or quadruple counting for such fuels that was proposed in October. The ITRE approach has generally been supported by European industry groups, including the Renewable Energy Association, ePURE, and the recently-formed group Leaders of Sustainable Biofuels. 

European Union Ethanol Policies


Challenges to EU ethanol anti-dumping duty
. The U.S. trade groups Growth Energy and the Renewable Fuels Association filed a complaint with the General Court in Luxembourg challenging the duty on U.S.-produced fuel ethanol that was recently imposed by the European Union.  This followed action in late April by a bipartisan group of 14 U.S. senators recommending that the U.S. ask the World Trade Organization to challenge this duty.

Alleged circumvention of EU ethanol import duty. The European trade association ePURE has asked the European Commission to investigate a situation where U.S. ethanol is possibly being imported into Finland as a blend of 8% gasoline/92% ethanol, as a means to avoid the anti-dumping duty that the EC has imposed on U.S-produced bioethanol.

European Union Biodiesel Policies


EU Biodiesel investigations of imports from Argentina and Indonesia
. The EU, which has instituted both anti-subsidy and anti-dumping inquiries against biodiesel imports from these countries, and has been registering imports from certain Argentine and Indonesian companies under the anti-dumping inquiry, has now reportedly decided to impose anti-dumping duties on imports from these countries. Reports on May 17 indicated that the European Commission has set provisional tariffs at between 7 and 11 per cent for imports from Argentina and between zero and 10 per cent for those from Indonesia. Following two days of talks with EU officials in late April, the Indonesian government is reportedly considering a complaint to the World Trade Organization if the EU follows through with these tariffs. More recently, Argentina has in fact already filed such a complaint with the WTO, in the latest installment of that country’s running battle with the EU over biodiesel imports into Europe.  Argentina had previously launched a complaint against Spain’s biodiesel policies, but dropped the complaint when Spain changed its policies.

News Briefs from Around the World


It has been reported that the leaders of the G8 nations are under increasing pressure to revise biofuel mandates in view of the alleged impacts of biofuel development on global food prices. Calls to revise the mandates come as the UK plans to hold a global meeting on nutrition and food a week prior to the general G8 meeting being held in Northern Ireland in June.

It has been reported that 41% of Canada’s ethanol mandate is being met by cornstarch ethanol made in the United States. Canada’s federal E5 mandate, enacted to stimulate domestic ethanol production, requires 2.2 billion liters of ethanol to be blended into gasoline each year, but 2012 imports of U.S. ethanol reportedly totaled 893 million liters.

Biofuels Digest reports that the South African government is finally moving forward on the implementation of legislation for E2 and B5 blends for ethanol and biodiesel, respectively, for implementation later this year along with a proposed incentive scheme said to be unveiled by the end of June.

In Zimbabwe, the government has decided to take control over the Green Fuel ethanol facility, a controversial project that earlier this year was restarted after a long shutdown, following the government’s decision to adopt a policy of mandatory blending of ethanol into gasoline.

Although Nepal instituted a 10% ethanol blending mandate in 2004, this policy is reportedly unimplemented because the country’s sole ethanol plant has never commenced commercial operations. 

Shell has begun sales of E20 ethanol/gasoline blends in Thailand

Previous Biofuel Policy Watch posts on international biofuel news:

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

 

International Biofuel News: May 6, 2013

Here’s an update on recent news items and other public policy developments in recent weeks relating to the development and commercialization of renewable fuels around the world.

European Union Actions


European Parliament report on ILUC.  The Industry Committee of the European Parliament has issued a report on indirect land use change (ILUC) under the Renewable Energy Directive that is attracting opposition from the biofuels industry.  The report concluded that different biofuels have different potential impacts on ILUC, and recommended that the RED take these differences into account in measuring progress towards meeting GHG reduction goals. Industry sources are critical of the methodology the EC uses to measure ILUC.

Biofuel industry opposition to EC’s ILUC proposal. In late April, a coalition of biofuel industry associations in Germany, Poland, Portugal, Spain and the UK issued a joint statement  critical of the recent European Commission proposals to amend the RED and to take indirect land use change (ILUC) into account. The group’s statement criticizes the Commission’s ILUC stance as “based on very uncertain science” and “triggered by the non-factual food vs. fuel debate”.  The paper also took issue with other aspects of the proposed RED revision, stating that the proposed 5% cap on food-derived biofuels is a “setback” from current market share, and criticizing the focus on advanced biofuels, which the paper maintains “demonizes” first generation biofuels.

U.S. senators challenge EU anti-dumping duty. On April 29, a bipartisan group of 14 U.S. senators sent a letter to the Acting U.S. Trade Representative and the Acting Secretary of Commerce, recommending that the U.S. ask the World Trade Organization to challenge the duty on U.S.-produced fuel ethanol that was recently imposed by the European Union.

Looking at it from another perspective, the EU’s anti-dumping duty on U.S. ethanol is predicted to provide a boost to European ethanol production. In 2011, U.S. imports accounted for 20% of the EU market, but analyst F.O. Licht now projects this market share to decrease to less than 5%. This is said to open opportunities for European ethanol producers.

News Briefs from Around the World


It has been
reported that fuel refiners in India are rushing to produce or procure enough ethanol to fulfill the government’s mandate to blend 5% ethanol into the nation’s gasoline supplies. The mandate is due to take effect on June 30, 2013.

Also in India, the Ethanol Manufacturers’ Association has decided to again approach the national government to demand a price for ethanol that is high enough to cover manufacturing costs in all regions of the country, including those states with the highest production costs.

The government of Thailand has set ambitious goals that call for alternative fuels to make up 44% of fuel consumption by 2021, but a spokesman for the Federation of Thai Industries says that this goal is unlikely to be met. The Federation says that meeting the goals, which would require an 8-fold increase in demand from 5 million liters per day to 40 million, is “too challenging”.

Brazil instituted tax breaks and low-cost credit lines to support domestic ethanol production and promote lower prices. Industry sources favored the move but said they fell short of what the industry needed.

The government of Zimbabwe has approved the use of E85 ethanol in flex-fuel vehicles. The country’s Energy Regulatory Authority announced the move, which is expected to help reduce prices at the pump, on April 10.

Sudan has instituted an E10 blending program, in partnership with private companies Kenana and Nile Petroleum.

Previous Biofuel Policy Watch posts on international biofuel news:

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 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

International Biofuel News: April 3, 2013

Here’s an update on recent news items and other public policy developments during the last few months relating to the development and commercialization of renewable fuels around the world.

European Union Actions


Rifts developing in EU regarding proposed RED revisions
. It has been reported that environment ministers from several EU nations (perhaps representing a majority of EU members) have expressed concern and/or opposition to the proposed 5% cap on food crop derived biofuels under the proposed revisions to the EU Renewable Energy Directive. The group, including ministers from Hungary, the Czech Republic and Poland, do not share concerns over the indirect land use changes (ILUC) that may result from production of food-derived fuels, noting that negative ILUC impacts are more likely to occur in the developing world and are not likely to be seen within Europe. These ministers also believe that the RED’s goal of achieving 10% biofuel usage by 2020 is unlikely to be met if food-derived fuels are capped as proposed. These discussions will likely continue until the European Parliament’s vote on the proposal, expected in July 2013.

EU RED Progress Report. The European Commission has issued a progress report on member state efforts to comply with the Renewable Energy Directive. The Commission found that most member states have seen significant growth in their use of renewables across all sectors, but that these growth rates are not likely to continue through 2020. Among the findings relative to the transport sector, the report stated that 22 EU member states failed to achieve the target of 5.75% renewable fuels by 2010. The report found that, although the EU as a whole is slightly ahead of its targets for biofuel usage in transport, the trend is that the longer-term targets will not be met unless further policy measures are adopted.

European industry position on proposed RED revision. The European ethanol trade group ePURE has issued a position paper on the revisions that have been proposed to the EU’s Renewable Energy Directive. Its main recommendation is that the EU set a target that petrol (gasoline) contain 10% renewable fuels, comprising separate targets of 8% for “conventional renewable ethanol” and 2% for “advanced biofuels”, the latter being fuels made from the feedstocks listed in the proposed Annex IX but without double or quadruple counting. This position clearly reflects the priorities of ePURE members, most of which are producing ethanol from corn, sugarcane, or other traditional feedstocks. The position paper also calls for the EU to set emissions reduction targets beyond 2020 as the directive now provides.

European ethanol lobby issues report critical of EU “double counting” for advanced biofuels. ePURE has also issued a report on March 27 that it had commissioned together with Novozymes, which concluded that the practice under the RED of double-counting to provide an incentive for adoption of advanced biofuels was ineffective. The report thus advocated against the proposal in the currently-pending RED revision under which advanced biofuels would be quadruple-counted. The report instead called for a “dedicated sub-target” for volumes of advanced biofuels to be incorporated in the fuel supplies of EU member states.

EU not ready to set binding targets for 2030 biofuel use. On March 27, the EU Energy Commissioner Gunther Oettinger said that biofuels were “not advanced enough” to yet justify setting binding targets for usage by 2030, since the current supply of biofuels is still dominated by “first generation agricultural biofuels”. He said that, although the EC wants to propose binding 2030 targets for all renewable energy usage, it would be premature to set such targets for transport fuels until such time as the market transitions to “second or even third generation [fuels]”.

U.K. think tank critical of ethanol use. The UK think tank Chatham House released a report on March 12 which recommended that the country reduce its dependence on corn-based ethanol in favor of “cheaper and more sustainable” biofuels based on feedstocks like used cooking oil. The report recommended changes to the UK Renewable Transport Fuel Obligation (RTFO), the national law which implements the EU Renewable Energy Directive, and which imposes stepwise targets to meet the EU goal of 10% renewable fuels by 2020. The report’s position was based on ethanol’s higher cost than biodiesel, and its alleged impact on food prices. The report cited government data showing that ethanol constituted 61% of the UK’s biofuel supply in 2012 (up from 41% in 2010), while biodiesel’s share declined to around 35% in 2012, down from about 60% in 2010.

North America


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.

News Briefs from Around the World


India 
reportedly needs to issue a tender to import ethanol in order to meet the government’s goal of a 5% blend in gasoline by June 2013.

The Philippines will implement its E10 mandate on April 1, 2013. This decision by the National Biofuels Board ends a long delay from an earlier mandate under the Biofuels Act of 2006, apparently due to a reexamination of whether 10% ethanol blends would cause engine damage.

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.

In Zimbabwe, the Green Fuel ethanol plant is back online, with production slated to start April 4. The reopening of this plant was made possible by a government decision to adopt a policy of mandatory blending of ethanol into gasoline, starting with a 5% blend and followed by increases to 10% and 20% over time.

A member of Parliament in Kyrgyzstan has proposed easing requirements for ethanol production licenses to stimulate private sector participation in an ethanol market that is now a government monopoly.

The government of Ukraine plans a 2-year policy to increase ethanol production 6-fold, to an annual rate of 360,000 metric tons, to meet its panned E5 blending mandate by 2014.

Previous Biofuel Policy Watch posts on international biofuel news:

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

International Biofuel News: March 6, 2013

Here’s an update on recent news items and other public policy developments during the last few months relating to the development and commercialization of renewable fuels around the world.

European Union Actions


EU energy ministers begin debating proposed RED revisions
. At a meeting of the energy ministers of EU member states held on February 22, discussions began about the proposed revisions to the Renewable Energy Directive (RED) that were announced in October 2012 (see this previous Biofuel Policy Watch post for more detail on these proposed revisions). Most of the discussion focused on the European Commission (EC) proposal to impose a 5% cap on the contribution of food-derived biofuels to the renewable fuel targets under the RED. EU Energy Commissioner Guenther Oettinger told the meeting that there may be flexibility on the proposed cap, and that a level of 6 or 7 percent , “might be more in line with the market,” and that it might make sense to consider separate caps for biodiesel and bioethanol. From published reports, there seemed to be a diversity of views among the member states, but most of the comments favored limits on food-based crops, and also favored assessment of indirect land use change in determining whether fuels should qualify as renewable under the RED. Further discussions are expected at future meetings of the energy ministers in the coming months, culminating in the delivery of a progress report by the current EU president in June 2013.

European Union anti-dumping duty takes effect.  On February 22, the EU Council published its final regulation imposing a duty on imports of U.S. ethanol into all European Union nations. This duty of 62.9 euros (approx. $83) per metric ton arises from the EU’s anti-dumping inquiry, and will be in force for five years beginning February 23. The duty was welcomed by ePURE, the European ethanol trade group that instigated the EU inquiry, and sharply criticized by U.S. ethanol trade groups, who have promised to challenge this policy. (see this previous Biofuel Policy Watch post for more detail on the EU anti-dumping and anti-subsidy investigations against U.S. ethanol).

EU “Clean Power for Transport” Proposal. On January 24, the European Commission announced an ambitious clean fuels strategy that includes recommendations for improvements to the infrastructure for delivering alternative fuels in the market. The most prominent portions of the proposal deal with the need for recharging stations for electric or hydrogen vehicles. Although the proposal identifies biofuels as “the most important type of alternative fuels,” it includes no specific recommendations to improve the infrastructure for biofuels, although there are general requirements for improved consumer information for all alternative fuels and vehicles. The proposal also appears to call for standardized labeling of ethanol/gasoline blends, in accordance with the gasoline standard EN 228. The European ethanol trade group ePURE, which apparently participated in some discussions leading to this proposal, has praised its proposed harmonization of fuel pump labeling for E10, but criticized its omission of E85, and its misguided belief that E85-utilizing vehicles would be limited to captive government fleets.

Interest Group Activities


New pro-biofuels industry group formed
. The CEOs of seven European biofuel producers and airlines have launched a new industry-led initiative to promote and expedite the deployment of advanced sustainable biofuels in Europe. The initiative, called Leaders of Sustainable Biofuels, is made up of Chemtex, British Airways, BTG, Chemrec, Clariant, Dong Energy and UPM, and has the goal of promoting market acceptance of advanced sustainable biofuels by all transport sectors. The group has adopted a strategy encompassing promotion of research initiatives, market-based actions, and public communications.

Interest groups urge EU to phase out reliance on land-based biofuels. In a letter released on February 20, a coalition of eight environmental NGOs called for the EU to amend its currently-pending amendment to the Renewable Energy Directive to impose “an absolute limit on the consumption of land-based biofuels in transport”. The group also called for mandatory accounting of carbon emissions linked to indirect land use changes. The coalition included Greenpeace, Oxfam, Friends of the Earth Europe, and other groups.

Environmental group critique of EU biofuel policies. A new report issued in January by CE Delft, an independent research and consultancy organization, assesses ways the EU can meet the stated goals of greenhouse gas emission reductions without relying on what it calls “land-based biofuels”. According to online sources, the report was commissioned and released by four environmental groups including Greenpeace. Among the many assertions in the 127-page report are criticisms of both existing EU policy under the Renewable Energy Directive and also the recently proposed revision. The Delft report proposes that the EU discontinue reliance on all biofuels produced from productive land, and to instead rely on a combination of increased energy efficiency, a shift towards electric transport, and the use of biofuels and biogas produced strictly from wastes or residues “with no other useful applications”.

News Briefs from Around the World

It has once again been reported that Brazil will raise its ethanol blend mandate back to 25%. This has been consistently rumored throughout the last several months, but Energy Minister Edison Lobao has reportedly told the Brazilian press that this move will be made official in May 2013. In fact, the government has now confirmed, in a publication in the Union Diary, that the blend rate will increase to 25% as of May 1, 2013.

Brazil’s energy minister Edison Lobao has reportedly said that the government could cut taxes on sugarcane derived ethanol to alleviate pressure from rising costs. Such a move would augment rather than replace the increase of the blend ratio from 20% to 25% planned in May.

South Africa’s Department of Energy has announced that the country will miss its 2% biofuels target for 2013.

A new FAO report on food and agriculture cites increased use of food crops for biofuel production as one of several factors in worldwide volatility of food prices.

The Global Renewable Fuels Alliance has recommended to an international gathering of agriculture ministers that they should include biofuels in their plans to attract agricultural investment in the world’s most impoverished areas. The Alliance has also called on attendees at the World Future Energy Summit in Abu Dhabi to commit to increasing biofuels’ share of the future global energy mix.

The government of Thailand has raised its ethanol subsidy, to make E20 almost 10 cents cheaper than 91 octane gasoline.

Previous Biofuel Policy Watch posts on international biofuel news:

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