Recent Renewables Required Reading: What Can You Skip, What d’ya Gotta Read?
by Jim Lane (Biofuels Digest) This week, in Washington and Brussels, four news flashes on global renewable fuel volumes appeared on the radar. Can you safely ignore them and get on with other work, or is there something to get deeply informed about? Let’s look into it.
#1. The Point of Obligation RFS Crisis.
Several parties petitioned the US EPA to shift obligations under the Renewable Fuel Standard from them to someone else. Basically, to anyone else. The petitioners want relief from buying RINs, thinking about renewables, or experiencing any pain associated with the change in the fuels marketplace which the Congress mandated in the 2007 EISA Act.
The Bottom Line:
Unless EPA goes completely insane, it’s a no-brainer to ignore.
#2 The US GAO Report: “Renewable Fuel Standard, Program Unlikely to Meet its Targets for Reducing Greenhouse Gas Emissions.”
Senator James Lankford of Oklahoma, chairing a Senate subcommittee, requested a report from the Government Accounting Office on the issues related to advanced biofuels R&D. Specifically, how the federal government has supported advanced biofuels R&D in recent years and where its efforts have been targeted and expert views on the extent to which advanced biofuels are technologically understood and the factors that will affect the speed and volume of production.
Lankford, in case you were wondering, introduced a bill to repeal the corn ethanol mandate in 2013 with the Ghost Fuels Deletion Act and again in 2014 with the Phantom Fuels Elimination Act. He again called for repealing the RFS in June 2015. So, if you regarded this report as a political exercise, you wouldn’t be alone.
The Bottom Line:
You can safely ignore this 38-pager.
Why You Can Safely Ignore:
Everyone already knows all this, the GAO report is a statement of the obvious. We might add, the entire report was written based only on talking to academics and government officials. This is a political haymaking and not much more.
Consider this as a Warning Label for the Report: “No Actual Fuel Producer, Oil Refiner, Technology Developer or Investor was disturbed during the Making of this Report.” READ MORE (Renewable Fuels Association)
#3 The European Commission’s new Clean Energy Package proposes to phase out, or significantly reduce, the use of conventional biofuels in Europe.
In the proposed Renewable Energy Directive for the period post-2020, the European Commission proposed to reduce the maximum contribution of conventional biofuels, such as ethanol made from corn, wheat and sugar beet, to the EU 2030 renewable target – from a maximum of 7% of transport fuels in 2021 to 3.8% in 2030. The Commission also proposed a binding blending obligation of 6.8 % to promote other ‘low emissions fuels’ such as renewable electricity and advanced biofuels used in transport.
The Bottom Line:
Sorry, this one you have to pay attention to.
Why We’re Talking About it:
As Novozymes Vice-President for Biorefining Thomas Schrøder summed it up perfectly: “The proposed gradual phase out of all conventional biofuels would only increase the share of fossil fuels in transport and add GHG emissions. By 2020, the aim was to have 10% renewables in transport, by 2030, the ambition is lowered to 6.8%. The European Commission failed to reflect in its proposal the latest science and evidence that demonstrate the very high sustainability profile of a series of conventional biofuels. For example, conventional ethanol effectively reduces GHG emissions today (by 64% on average compared to petrol) even when indirect impacts are accounted for. They have a legitimate role to play in the EU energy mix.”
Why You Can’t Safely Ignore:
EU regulators hope to secure food for Europeans by phasing out the conversion of grains and oils to fuels. Yet, what happens when supply outstrips demand? Commodity prices fall, and production exits the market, reducing the very grains and oil supply that the new directive is supposed to secure.
#4 The Canada Course Correction
Canada’s Ecofiscal Commission recently released a report entitled Course Correction, which calls on the Canadian government to rethink its biofuels policies.
The Bottom Line.
Skip it. Everyone else did. Including the Canadian government, who celebrated the report’s criticism of biofuels policies but announcing an expanded national Low Carbon Fuel Standard.
Why You Can Safely Ignore:
As Gord Miller, former Environmental Commissioner of Ontario told the National Post: “As I see it, Ecofiscal’s Course Correction report, if embraced, would have the following net result: greenhouse gas emissions would increase, urban air quality would deteriorate, and consumers would pay more for fueling their vehicles. Moreover, all access to the liquid transportation fuel market for current and future renewable or alternative fuels would be eliminated, and research and development of biofuels would be shut down. If anything, it’s Ecofiscal’s work that needs a thorough review from a broader perspective.” READ MORE
Nigeria Plans Biofuel Production with Juicy Investment Incentives
(Offgrid Nigeria) A draft national policy on biofuel production and distribution likely to be signed into law very soon by Nigeria, has proposed very mouth-watering incentives for investors willing to go into biofuel business in the country, OGN has learnt.
Obtained by OGN in Abuja, the policy document seeks to open up a competitive biofuel business in the country.
It is being fine-tuned by the Nigerian National Petroleum Corporation (NNPC) and Petroleum Products Pricing and Regulatory Agency (PPPRA). Both agencies are driving the document and have held consultations with stakeholders in the sector.
Parts of the incentives proposed in the draft document include the setting up of an appropriate funding arrangement of up to $100 billion for the establishment of a Biofuels Industry Equity Fund by the federal government.
It also proposed that all registered businesses engaged in activities related to biofuels production or the production of agricultural feedstock for the purpose of biofuels production and co-generation within the country shall be accorded pioneer status within the provisions of the Industrial Development (income tax relief) Act.
There will also be a preferential loan arrangement made available to investors in the biofuels industry to aid the development of large-scale out-grower’s schemes and large scale integrated operation including a feedstock plantation, a plant and within-the-gate co-located power generating plants, cattle feedlots and fruit canning. READ MORE