Ethanol Industry Details Policy Needs Biofuels Industry Champions Carbon Pipelines under State Legislative Challenges

by Chris Clayton (DTN Progressive Farmer) Geoff Cooper, president and CEO of the Renewable Fuels Association, isn't holding out much hope for new legislation for biofuels in the new Congress. "If the last few weeks are any indication, we're in for a rocky ride the next two years," Cooper said, pointing to the struggles the House of Representatives has had in getting organized. "It's hard for me to see any meaningful, big-ticket legislation that we would find helpful,"

Cooper spoke Tuesday at the Iowa Renewable Fuels Summit as industry leaders touted gains on the state and federal level over the past year while also lamenting that the Biden administration has yet to complete work on year-round E15.

The industry also sought to pivot discussions about carbon pipelines away from landowner division to an edge needed for the industry to remain competitive in a low-carbon economy.

Monte Shaw, CEO of the Iowa Renewable Fuels Association, pointed out EPA had a proposed rule for year-round E15 for nine Midwest states that was sent to the White House Office of Management and Budget (OMB) in December. The OMB then sent the proposal back to EPA.

"EPA is not the problem on this E-15 fix," Shaw said. "Someone at the White House put the brakes on."

Cooper later noted the American Petroleum Institute -- for years a policy opponent of biofuels -- approached RFA about working out a national E15 waiver rather than opening the door for nine Midwest states to have their own blend rules.

"The refiners do not want to do what the governors are pursuing and that's why the White House is dragging its feet on this," Cooper said.

The problem, however, is that the clock is again ticking to have a rule before the summer driving season. Once OMB finally greenlights a proposed rule on E15, it will require a comment period and likely further revisions before a final rule comes out. Last spring, President Joe Biden signed an emergency waiver for E15, citing high fuel prices. Cooper told DTN he thought an emergency waiver would be harder to justify a second year.

While the ethanol industry is largely supportive of the new set rule, the biodiesel industry maintains EPA came in too low for blend levels of biodiesel.

Kurt Kovarik, vice president of federal affairs for Clean Fuels Alliance America -- formerly the National Biodiesel Board -- said the biodiesel industry has 3.1 billion gallons of production capacity and the RFS levels should reflect that production.

"Our goal to the Biden administration and EPA is that they need to course correct before they finalize that rule" Kovarik said.

A bill in South Dakota's legislature advanced out of committee Monday that would block two multi-state carbon pipelines from using eminent domain to secure land.

Iowa lawmakers also have introduced similar bills. Shaw told Iowa RFA members the importance carbon capture and sequestration will be for ethanol plants in the state going forward.

Reflecting the role of carbon pipelines going forward, Summit Carbon Solutions and Navigator Ventures LLC -- the two biggest pipeline project developers in the Midwest right now -- were both "Gold Sponsors" for the summit.

David Kruse, chairman of Commstock Investment, also owns a 900-acre farm in northwest Iowa and talked about negotiating with a pipeline company. He said he felt the pipeline operator agreed to about 80% of his demand. Talking about the benefits of pipelines going forward, he added, "The one thing I would counsel is they make themselves aware of the economic impact of what the CO2 pipelines has on the carbon source and subsequently on the value of ethanol."

Ernie Goss, an economics professor at Creighton University in Omaha, also suggested failing to establish carbon sequestration as a benefit for ethanol plants could translate into the loss of $1 a bushel for corn, "if we don't get sequestration." He added, "We've got to move in this direction in my judgement."

John Thompson, technology and markets director for the Clean Air Task Force, a group that promotes carbon capture, said the Biden administration would not be able to achieve U.S. emission goals if carbon capture technology is not adopted by industries.

The Inflation Reduction Act, which passed Congress late last summer, has multiple incentives to support biofuels including the Clean Fuel Producer Tax Credit up to $1 a gallon, a tax credit for Sustainable Aviation Fuels up to $1.75 a gallon, and $500 million to help build out biofuels infrastructure.

"There is some great stuff in that package for biofuels, it is a game-changing piece of legislation for our industry," Cooper said.

Cooper added, "We remind everybody that this administration has been quietly supportive of ethanol and renewable fuels."

"We have a strong disagreement with that," Cooper said, adding the administration is only looking at tailpipe emissions and not electric power generation from coal used to charge vehicles. "It's not right you are putting all of your eggs in the electric vehicles," Cooper said.

Electric vehicles hit a high last year of 8% of all vehicles sold in the country. But Cooper noted, even if one-third of vehicles sold by 2030 were EVs, that would still only account for 7% to 8% of all vehicles on the road.

Right now, ethanol's carbon footprint is as much as 50% smaller than gasoline. The industry can continue to move to 70%, 80% lower emissions, but it will take technology -- and carbon capture. READ MORE

Excerpt from Brownfield Ag News: Monte Shaw tells Brownfield, “We have some challenges on the left who want to apparently not help biofuels because they want to have the only answer be EVs (electric vehicles),” Shaw said. “We don’t have anything against EVs. We just don’t think they are the only answer. And we have some challenges on the right where you have people who still want to hold higher blends like E15 back because they want to protect fossil fuels.” READ MORE