EPA's 2011 Renewable Fuels Standard (RFS2) may slow cellulosic ethanol development

By Agri-Pulse Staff

© Copyright Agri-Pulse Communications, Inc.

Washington, Nov. 29 - The U.S. Environmental Protection Agency (EPA) finalized the 2011 percentage standards for the Renewable Fuels Standard (RFS2). The final requirements fall in line with the agency's proposed rule from earlier in the year.

The Energy Independence and Security Act (EISA) amended the Clean Air Act to greatly increase the total required volume of renewable fuels each year, reaching a level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates percentage-based standards for the following year. Based on the standards, each producer and importer of gasoline and diesel determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.

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The final 2011 overall volume and standards are:

  • Cellulosic biofuel - 6.6 million gallons; 0.003 percent

  • Biomass-based diesel - 800 million gallons; 0.69 percent

  • Advanced biofuel - 1.35 billion gallons; 0.78 percent

  • Renewable fuel - 13.95 billion gallons; 8.01 percent

The total RFS2 requirement for 2011 will remain at 13.95 billion gallons. Of this amount, 12.6 billion gallons will be starch-based ethanol. The remaining 1.35 billion gallons will be a combination of biodiesel and other advanced biofuels, including a 6.6 million gallon requirement specifically for cellulosic biofuels which is lower than original targets established when the RFS2 became law.

“Based on an analysis of expected market availability, EPA is finalizing a lower 2011 cellulosic volume than the statutory target. Overall, EPA remains optimistic that the commercial availability of cellulosic biofuel will continue to grow in the years ahead,” agency officials explained.

In response to the standard, Renewable Fuels Association (RFA) President and CEO Bob Dinneen issued the following statement:

“The RFS was designed in part to ensure the evolution of America's biofuels industry is successful. By reducing the standard for cellulosic biofuels, EPA is accurately reflecting the difficulties cellulosic biofuel technologies have encountered in obtaining the capital needed to fully commercialize. However, being aware of this fact, EPA should have been and must be careful to keep cellulosic biofuel targets ambitious so as to stimulate the kind of investment these technologies need to finish commercialization.”

A statement from Growth Energy concludes that:

“There's no question that the potential for cellulosic ethanol remains on track and that is why it is so important to have real targets to give confidence that there will be a market for those who are investing in the industry. Some of the pilot projects are on the edge of delivering commercial-scale volumes of cellulosic ethanol to the market, for a price that is competitive to gasoline. But not all pilot projects are that close, and that's in large part because the market for ethanol is capped by arbitrary regulation in the U.S. What's preventing the growth of cellulosic ethanol in the transportation fuels market is the lack of access to the market - and without that market, we're not drawing the necessary investment. That's why Growth Energy is pushing our Fueling Freedom proposal, which would reform market access and let cellulosic ethanol compete with gasoline derived from foreign oil.”

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