What Next? Biofuels Industry Leaders Contemplate Future Moves, after Obama Shift in Biofuels Policy
by Jim Lane (Biofuels Digest) In Washington, the Biotechnology Industry Organization followed up on a shift in US biofuels policy with a call for four new steps it said would increase the pace of biofuels commercialization. BIO called for:
• Revising the risk assessment process for advanced biofuels projects in the current Department of Energy loan guarantee program;
• Double funding for U.S. Department of Agriculture programs to deploy cellulosic feedstocks; include eligibility for value-added biobased materials, products and chemicals;
• Funding the reverse auction for cellulosic biofuels already incorporated in law;
• Funding development and deployment programs for biobased products and renewable specialty chemicals.
…ZeaChem CEO Jim Imbler repeated his call for national governments to adopt a more sophisticated subsidy program, where subsidies would be linked to a floor price for oil, and the industry would be eligible for subsidies only if the price of oil dropped below a target price in the $70-$75 per barrel range, at which point many developing, advanced biofuels companies would become uncompetitive…
…Cobalt Technologies’ CEO, Rick Wilson, welcomed the shift in biofuels policy, …although the USDA had expressed enthusiasm for biobutanol in meetings during 2009, the DOE had told Cobalt as late as November that they didn’t believe in biobutanol as a transport fuel.
…Wilson said that, because there was not a futures market for certain advanced feedstocks and fuels that enabled the execution of sophisticated hedging strategies, the industry should tie its pricing to oil so that oil futures could be used as a proxy for hedging against downside risk.
…Commenting on the news that the US federal government would developing a program offering up to $40 billion in loan guarantees, Wilson said, “What we really need at this stage are grants. If someone builds a small project and it works, then the market can take it from there. What investors need is to be convinced that the technology risk has gone away.” READ MORE