The EPA has issued proposed RFS2 rules for 2011 that provide some indications that the agency is dedicated to jump starting the advanced biofuels industry. Most notably, the EPA held fast to an overall mandate of 13.95 billion gallons of renewable fuel. While the agency intends to deviate downward on cellululosic biofuels with a cut of 90% or more anticipated, the proposed rule maintains the overall Advanced biofuel mandate at 1.35 billion gallons and the Biomass-based diesel requirement at 800 million gallons. Thus the agency is paying significant attention to the existing capacity of the biodiesel industry despite the lack of approval for the blender's credit six months into the year. Biofuel supporters hope that this policy gap will be addressed shortly or that RIN values will continue to increase for Biomass based diesel.
The proposed rule contains two other notable components: tentative but retroactive RIN credit for canola, sorghum, pulpwood and palm oil biofuel producers; and a petition process for foreign countries to avoid the onerous feedstock obligations that now apply in favor of the aggregate approach available within the US. The referenced feedstocks have been under consideration by EPA for Life Cycle Analysis since prior to the original RFS2 Final Rule was released but the work has still not been completed. The severe challenge for this group of biofuel producers is that EPA has previously indicated that RIN generation would trigger only when the pathway was certified. EPA's proposed new flexibility is an improvement but still falls short of providing full RIN value for these producers due to the lag time and uncertainty associated with the approach. The proposed petition process for foreign countries is an apparent attempt to level the playing field for foreign producers who now must trace and certify feedstocks such as soy and corn in a manner not required within the US.
The rules will be published in the Federal Register shortly and the public comment period will likely run to approximately August 13th.
Next week, the Anaheim Convention center hosts Solar Power International, which bills itself as 'North America's largest business to business solar industry event.’ With over 900 exhibitors (Stoel Rives included) and 25,000 attendees expected, there is no doubt that this conference will be one of the largest and most heavily attended solar industry events in the world this year. The conference starts on Monday October 26 with pre-conference workshops and runs through Friday October 30. This year’s keynote speaker is Robert F. Kennedy Jr. the keynote address will take place on Wednesday morning.
If you are attending the conference, please stop by our exhibit booth (No. 1744), which is centrally located in the “PV Cells and Modules” section of the Exhibit floor. Stoel Rives attorneys Howard Susman, Morten Lund, Pat Boylston, Gregory Jenner, Stephen Hall, Kristen Castaños, David Quinby and Adam Walters will be in attendance.
Yesterday, the Department of Energy (“DOE”) announced more than $154 million in Recovery Act funding to four states for their State Energy Programs (“SEPs”). The funds were awarded to California, Missouri, New Hampshire, and North Carolina. The funding is to be provided in two stages to the four states with the second stage requiring successful performance at the first level. The funding is to be utilized in the areas of energy efficiency, workforce training, education and related programs.
California will use its SEP funds to finance a statewide retrofit program, provide clean energy to buildings and facilities, and develop a public education and outreach program focusing on the advantages of energy efficiency. In addition, California will use its SEP funds to further develop a green workforce in the areas of energy efficiency and clean energy. After demonstrating success in the execution of its plan, California will receive additional funds of more than $113 million, for a total of $226 million.
Missouri will use its SEP funds to increase energy efficiency through various measures, including the expansion of existing home efficiency programs, building energy codes, and training programs. Missouri will also examine its most energy-intensive industrial/manufacturing sectors for energy-saving opportunities and will increase energy efficiency through a program that may include energy audits, rebates, and low-interest loans. After demonstrating success in the execution of its plan, Missouri will receive more than $28.6 million of additional funds, for a total of over $57 million.
New Hampshire will use its SEP funds to advance energy efficiency and renewable energy through building codes, competitive loans and grants, and financial and technical assistance to businesses and other institutions. New Hampshire will also support energy efficiency upgrades to colleges, universities, and state-owned buildings. After demonstrating success in the execution of its plan, New Hampshire will receive more than $12 million of additional funds, for a total of over $25.8 million.
North Carolina will use its SEP funds to promote energy efficiency and renewable energy through competitive grants, revolving loans, and education and training programs designed to encourage investment in energy-related technologies. The state will also establish a training program in its community colleges and universities to prepare workers for the green economy. After demonstrating success in the execution of its plan, North Carolina will receive $38 million of additional funds, for a total of $76 million.
The Roundtable on Sustainable Biofuels last week released Version 0.0 of its “Global Principles and Criteria for Sustainable Biofuels Production.” This diverse group includes representatives from World Wildlife Federation, BP, Bunge, the Dutch Ministry of Housing and the Environment, the Forest Stewardship Council, the University of California at Berkeley and the World Economic Forum. They have been hard at work for the past year establishing an objective framework for enabling a true cost benefit analysis of biofuels that incorporates environmental, economic and social justice criteria. They welcome input into their process and have opened the document for six months of feedback which can be provided via www.bioenergywiki.net
Hopefully, this process will yield substantial success. As an early participant in the US biodiesel industry, I can attest that the benefits of biofuels appeared quite compelling and almost self-evident as compared to conventional petroleum fuel. Those in the industry with a strong interest in environmental issues typically considered corn ethanol and soy biodiesel as transition fuels that would establish the viability of a more diverse transportation energy portfolio by leveraging the existing farm economy. After market entry with these transition fuels, the road would be paved for superior feedstocks as we are witnessing today with cellulosic material, waste feedstock material and even algae.
In retrospect, the Roundtable of Sustainable Biofuels should have been founded a decade ago rather than last year. With an earlier start, such an organization might have achieved great progress in injecting some objective criteria into the “food vs. fuel” debate and propelled the industry in a more sustainable direction. In the absence of these criteria, some of the debaters have used these crucial (and emotional) issues to advance their own agendas and the biofuels industry has lacked the framework to establish its own best practices.