President Biden’s Climate Plan and iIts Role in Agriculture & Renewable Biofuels

by Oliver Peoples (Yield10 Bioscience/Biofuels Digest) During President Biden’s April 22^nd climate plan speech at the Virtual Leaders’ Summit on Climate, he announced his goal of cutting 50 percent of U.S. carbon-emissions levels by 2030. This is no simple task, and consumers, investors and businesses alike are aware of the difficult but necessary road ahead. To achieve this objective, it will take the work of more than just renewables innovators or consumers purchasing electric products, but rather an entire ecosystem working together. In particular, there is renewed optimism for the intersection of biotech, agriculture and energy companies working together towards improved renewable biofuel production.

Before the President’s announcement, demand for renewable diesel was already rising rapidly to meet California’s low carbon fuel standards. Renewable diesel can either be blended with petroleum diesel, or used as a drop-in replacement for it, enabling it to be used within existing infrastructure. Although this technology alleviates one hurdle in moving towards low carbon fuels, supply of waste vegetable oil is insufficient to meet demand. As a result, the industry is expanding its use of vegetable oil feedstocks including soybean, canola, and palm oil for use in renewable diesel.

These developments also place the oil sector in the rather new position of “not owning the well”. Unlike petroleum diesel, where the oil sector has historically been vertically integrated, owning all layers of the supply chain. In the renewable diesel space, companies in the oil sector may instead be completely dependent on the existing oilseed value chain to secure feedstocks for these refineries. We are eager to watch how energy companies react to this new challenge.

Its once more a boom time in the farm belt as commodity prices grow, and this trend likely to continue in the future due to increasing vegetable oil feedstock demand for renewable diesel. While good for farmers, this has the potential to intensify the food versus fuel debate. This could lead to pressure to lower carbon offsets for vegetable oil feedstock used in renewable diesel, to reduce price increases in food stores. Incidentally, climate change has the potential to exacerbate the issue. As we are all aware crops are completely dependent on the weather conditions in a particular growing season and this year has been particularly challenging, as record heat waves in the Pacific Northwest and Canadian prairies have caused harvests to suffer for canola and other grains.

One way out of this paradox is the use of relay cover crops – those planted on fallow ground during the off season to improve soil health and prevent erosion. In fact, Biden’s climate plan offers incentives to farmers who plant cover crops, because of their environmental benefits for improving the carbon footprint of food production. However, the challenge has been to develop cover crops which generate enough revenue for farmers to broaden the practice.

The development of new varieties of winter Camelina sativa (Camelina) could change the dynamics and economics of relay cover cropping because it can produce oil for use as a renewable diesel feedstock as well as protein meal for use as livestock feed.

Yield10 recently completed its first successful field test of this new technology and has begun scaling up the best bioplastic lines for larger scale production to start pilot seed processing to produce bioplastics feedstock oil and protein meal.

The development of differentiated and value-added Camelina lines also provide opportunities for partnerships between big oil and crop genetics companies like Yield10. Like major crops, where seed companies such as Bayer, Corteva, Syngenta, and BASF dominate the landscape due to strong IP advantages, attracting Camelina acreage will also depend on being able to provide the highest revenue genetic lines to farmers. As a result, big oil’s best hope at maintaining a sufficient vegetable oil supply for renewable diesel could depend on securing offtake agreements with genetic technology leaders in the relay cover crop space. READ MORE