Break in RFS alliance stirs debate on biofuels

By Whitney Forman-Cook

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, March 11, 2015 - In competing news conferences today, producers of corn ethanol attacked, while the petroleum industry defended, a proposal to reopen the legislation that created the Renewable Fuel Standard (RFS).

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At the center of both discussions was the Advanced Biofuels Association's (ABFA) call for a series of “legislative fixes” to the RFS, which established mandates for blending renewable fuels into gasoline. ABFA President Michael McAdams said his organization would break from the biofuels mainstream because of a “simple fact.”

“The RFS is not equally helpful to all sectors of the biofuels industry,” he said today in his address to the 2015 Advanced Bioeconomy Leadership Conference in Washington.

Even though ABFA represents companies that make biomass-based versions of conventional fuels like diesel and jet fuel, McAdams claimed they need capital to build new facilities and “to move cutting-edge technology from a demonstration plant to commercial scale." Well-established, first generation biofuel producers, including those who make corn ethanol, simply don't have those needs, he added.

Second generation biofuel companies have been able to make significant investments in infrastructure under the current RFS, however. According to the 2015 Pocket Guide to Ethanol, published by the Renewable Fuels Association (RFA), three commercial-size cellulosic facilities were built in 2014 and construction on a fourth is nearly complete.

Tom Buis, CEO of Growth Energy, said on one of Wednesday's conference calls that the ABFA's proposal to open up the RFS to legislative changes “will only create uncertainty for the industry.”

“This is a short-sighted proposal (and) the last thing biofuel producers of any kind need,” Buis said in a press release. “First generation fuels, such as corn based ethanol, and cellulosic ethanol are inextricably linked.”

“According to any measure, the RFS works,” Chip Bowling, president of the National Corn Growers Association, said in a statement. “It has reduced dependence on foreign oil, it has helped clear the air of toxic emissions, it has boosted rural economies and it has saved consumers money at the pump.”

 

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AFBA is proposing three “legislative fixes.” It wants to see the RFS program extended beyond 2022, when it is scheduled to expire under current law. It also asks that oil companies be prohibited from purchasing waivers instead of buying corn ethanol or cellulosic fuel to meet RFS requirements, and that minimum renewable identification number (RIN) values are indexed against oil prices for cellulosic fuels.

Big Oil is unlikely to support ABFA's proposal, but it undoubtedly likes to see signs of dissention within the ranks of the biofuels community.

Bob Greco, American Petroleum Institute's downstream and industry operations director, said ABFA's decision to propose legislative changes “is (part of) a growing recognition that this (RFS) is unworkable (and) further narrows the coalition of people who support this RFS.”

“Until today, ABFA strategy has been to work with the administration… to drive the development of second-generation biofuels,” Scott Faber, vice president of government affairs at Environmental Working Group (EWG), told reporters this morning.

“This (proposal) is a real departure for ABFA and a public recognition that the RFS is so badly broken that the industry the legislation was designed to develop has now thrown in the towel and asked Congress for help,” Faber said. EWG opposes the RFS, charging that it increases pollutants and creates higher food prices by diverting much of U.S. corn production from feed and food into fuel.

Both sides of the RFS issue did agree, however, that the Environmental Protection Agency needed to put forth a final rule with new volume standards under the RFS soon.

Bob Dinneen, president and CEO of RFA, said “the EPA just needs to get off their duff, read the statute, and get it done.”

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