Fantastic 5: US States Getting It Done, Making Biobased Happen

by Jim Lane (Biofuels Digest) ... the most innovative public-private policies are likely for some time to proceed out of regions, provinces and states.

In some ways, in the United States the forces arrayed against the Renewable Fuel Standard will end up with something far worse — a patchwork of state-by-state mandates and low-carbon standards to contend with, that will make traditional refining operations more complicated and expensive, and make renewable fuels more competitive on price.

Or, we may well see a voluntary network of states deploying regional low-carbon standards that are relatively well-synchronized, so that compliant fuels can be produced on a regional rather than a state-by-state basis. We’ll see about that.

Meanwhile, a number of states are showing the way on energy standards, production incentives, and integrated innovation efforts. Let’s look at the Fantastic Five.

It’s the land of the Low Carbon Fuel Standard, which is driving real change in the fuel mix, broad innovation in low-carbon vehicles and fuels, and recently was renewed and extended by California’s state legislature.

Iowa is home to the largest single ethanol fleet and is one of the largest biodiesel producers, but they’re not resting on their laurels. Last year, a renewable chemicalsproduction incentive was authorized by the state legislatrure, and is expected to drive a number of cheical projects to Iowa, where they already will enjoy abudant feedstock, infrastructure and skilled workforce.

But that’s not all. After a year of planning, hard work and collaboration with stakeholders from around the state, including working group members, state agencies, industry organizations, and members of the public, the Iowa Energy Plan is final and available for review, here.

A total of 15 objectives and 45 strategies make up the Iowa Energy Plan. Together, these objectives and strategies propose a balanced approach to encourage growth in all of Iowa’s energy sectors while emphasizing sustainable practices, economic development throughout the state, and supporting the research and development required to keep Iowa on the leading edge of energy innovation.

Something new in state-based innovation? For sure, there’s nothing quite like what we called a “shiny, almost unheard of process for developing biobased projects: the Maine Born Global Challenge.”

Maine came to the realization that the “same-old” approach to project formation was going to result in the “same-old” result in terms of project creation: only old-line projects can be financed by old-line project financing, since that financing structure, at its heart, avoids the very technology risk that fuels the economic transformation.

To commercialize “innovative technologies by providing physical locations and real projects for market expansion and value creation. Companies of complementary technologies will be grouped into project teams, assigned to specific power plant locations, given funding for business/implementation plans and provided with investment/project financing for project execution.”

As far as the hottest area in biobased projects in recent years, Minnesota was the first on board with a renewable chemicals investive. Chemicals must have content that is at least 51% biobased to be eligible for the production incentive. Production facilities must be located in Minnesota. Facilities must begin production before June 30, 2025 and facilities must produce at least 750,000 pounds per quarter to enter the program and for each quarter for which a reimbursement claim is made. And generally speaking, facilities must source 80% of the raw materials from Minnesota (there are some exceptions for facilities near state lines). The incentive is up to $0.06 per pound of production from cellulosic biomass — if you;’re more familiar with gallon-based incentives for liquid fuels, think of an incentive in the $0.40-$0.50 ramge.

Who else has a Low Carbon Fuel Standard? Canada’s developing one, British Columbia has one, a group of northeastern states are talking about one, and so is Washington state. But south of the Canadian border, only Oregon has been able to follow thre California vision and put one in place.

The 2009 Oregon Legislature passed HB 2186 authorizing the Oregon Environmental Quality Commission to adopt rules to reduce the average carbon intensity of Oregon’s transportation fuels by 10 percent over a 10-year period. The 2015 Oregon Legislature passed SB 324 allowing DEQ to fully implement the Clean Fuels Program beginning in 2016. READ MORE and MORE (Biomass Magazine)