Ambitious 'Biofuel America' Plan Faces Overhaul in 2022

December 20, 2021

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by Chuck Abbott (Successful Farming) During the ethanol boom of the early 2000s, Congress set an ambitious target of quadrupling the amount of renewable fuel mixed into gasoline for America’s cars and pickup trucks. But while corn ethanol has lived up to its part of the plan, cleaner-burning “advanced” biofuels have been slow to come to market — two factors for the EPA to consider as it faces a regulatory reset of the Renewable Fuel Standard in the new year.

The agency says it will propose regulations in May for the production of conventional and advanced biofuels beginning in 2023. They would be based on criteria in air pollution law, such as the impact of renewable fuels on air quality, climate change, wildlife habitat, food and fuel prices, and availability of advanced fuels.

The new rules would be finalized by next December, according to a brief EPA description published in the government’s agenda of regulatory action.

“For 2023 and beyond, we want growth for all categories of renewable fuels — or, at the very minimum, we’re looking for stability in the volumes required,” said Geoff Cooper, president of the Renewable Fuels Association, on Thursday. “EPA’s proposal for 2022 volumes serves as a good springboard and starting point for 2023+ volumes.”

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EPA administrator Michael Regan said the agency was putting the RFS “back into growth mode” following the disruptions of the pandemic, when biofuel sales, mirroring the gasoline market, shriveled in the face of stay-at-home orders and economic retrenchment.

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But advanced biofuels proved expensive and difficult to produce. Three cellulosic ethanol plants that went into operation in 2014 and 2015 were shut down by the end of 2019. Cellulosic ethanol was expected to be a breakthrough biofuel because it can be made from crop debris instead of relying on food crops. The EPA repeatedly reduced the annual RFS assigned to advanced biofuels, saying the industry was too small to meet the targets written into the RFS statute. The industry said the reductions drove away investors and deterred the use of their product.

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In addition to the RFS reset, the EPA said it would propose a regulation to designate renewable diesel fuel made from canola oil as an advanced fuel under the RFS program. READ MORE

Ag Policy Blog: Ag Climate Agenda Likely Stalled Over Build Back Better Fight (DTN Progressive Farmer)

Biofuels discussion bring Biden administration official to Cannon Falls: Under Secretary for Rural Development Xochitl Torres Small and U.S. Rep. Angie Craig pitched portions of the Biden Administration's Build Back Better plan Friday in Cannon Falls. (Post Bulletin)

Minn. farmers tout biofuels as greener energy option: As the nation looks to cut carbon footprint, Minnesota farmers cite ethanol and other biofuels as greener options that are already available. (KARE11; includes VIDEO)

New Administration Shifted Directions on Trade, Pesticides, RFS, Climate (DTN Progressive Farmer)

Excerpt from DTN Progressive Farmer: The conservation funding and provisions for biofuels in the bill were expected to jumpstart those efforts and provide a strategy that would also expand the number of farmers whose operations could qualify for the increasing number of companies selling private carbon credits to producers.

An anchor to all of that is a host of funding programs in the Build Back Better bill. The legislation includes a $27.1 billion increase for USDA conservation programs over ten years. Among the conservation details, a provision in the bill would pay farmers $25 an acre to grow cover crops. The White House stated, "at its peak," the climate-smart conservation provisions in the bill would reach as many as 130 million acres.

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The National Farmers Union in October had urged lawmakers to pass the bill to help farmer address climate change. NFU noted other provisions in the bill would help rural America, including improving the quality and affordability of health care, and helping more children gain access to healthy meals. The National Sustainable Agriculture Coalition and 62 other groups in August had supported the bill's climate-smart agricultural provisions as well.

CBO pegged the overall agricultural provisions in the bill at $81.7 billion over ten years. The bill would spend roughly $27.1 billion on conservation with funds divvyed up among the major farm-bill programs. The funds would primarily pay farmers to increase climate-smart practices on their farms that sequester carbon and lower greenhouse emissions. That includes $9 billion for the Environmental Quality Incentives Program (EQIP); $7.45 billion for the Regional Conservation Partnership Program (RCPP); $4.1 billion for the Conservation Stewardship Program (CSP); and $1.7 billion for the Agricultural Conservation Easement Program.

Another $25.3 billion would go toward USDA Rural Development programs. Within that area would come $9.7 billion in aid for rural electric cooperatives and $2.9 billion in loans for renewable energy. Another $1.96 billion for the Rural Energy for America Program (REAP) and $960 million for biofuel infrastructure. The bill also includes a new $970 million Rural Partnership Program that will establish competitive rural grants for states and tribes.

The bill also extends the $1 a gallon Biodiesel and Renewable Diesel Tax Credit through 2026, projected to generate $14.17 billion in tax credits for the biodiesel and renewable diesel industries.

One potential boon for biofuels comes through provisions for "sustainable aviation fuels." The bill includes research and development funds for renewable aviation fuels that reduce greenhouse gas emissions by 50%. The bill also creates a $1.25 per gallon tax credit for the sale and use of sustainable aviation fuels, plus 1 cent per gallon for every extra percentage points of emission reduction beyond 50%. The aviation industry has been seeking these sustainable aviation fuels to lower their carbon footprint.

Those biofuel provisions led Growth Energy, the National Biodiesel Board, the National Corn Growers, the National Farmers Union, and the Renewable Fuels Association to write key senators that the agricultural provisions in the bill " "will build new markets for farmers and biofuel producers and help lower the carbon intensity of agriculture." READ MORE

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Regulations-Federal Renewable Fuel Standard (RFS and RFS2) renewable volume obligation (RVO) RFS "reset" Advanced biofuels advanced biofuels production BioRefineries/Renewable Fuel Production Cellulosic ethanol cellulosic biofuel Canola/Rapeseed ethanol/bioethanol biodiesel environmental policy Transportation Fuels Policy EPA (Environmental Protection Agency) history corn ethanol Agricultural waste/residue Renewable Diesel/Green Diesel/HVO/Paraffinic Diesel pathways Investing market forces climate legislation Legislation-Federal Department of Agriculture (USDA) cover crops climate smart/conservation agriculture carbon/CO2 sequestration Rural Energy for America Program (REAP) Renewable Energy energy policy aviation fuel (SAF) tax credit renewable diesel tax credit biodiesel tax credit Jetfuel (Sustainable Aviation Fuel (SAF)) Aviation Fuel/Sustainable Aviation Fuel (SAF) Carbon Intensity (CI)/Carbon Footprint

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