Currently, there are two nearly identical proposals before Congress to provide a business related tax credit for the production of renewable chemicals. S. 1267, the Qualifying Renewable Chemical Tax Production Act of 2013, was introduced on June 27, 2013, by Senator Debbie Stabenow (D-MI). The bill has one co-sponsor, Senator Al Franken (D-MN). H.R. 3084, a bill by the same name, was introduced on September 12, 2013. It currently has five bi-partisan co-sponsors, including Representatives Richard Neal (D-MA), Scott Peters (D-CA), Linda Sanchez (D-CA), Allyson Schwartz (D-PA), and Steve Stockman (R-TX). A copy of S. 1267 is available online. A copy of H.R. 3084 is available online.
Iowa Governor Terry Branstad (R), Lieutenant Governor Kim Reynolds, and State Secretary of Agriculture and Land Stewardship Bill Northey led an effort to send a letter to EPA requesting it to convene a field hearing in Iowa on the Agency's proposed 2014 RFS rule. The letter was signed by the entire Congressional delegation from Iowa. A copy of the letter is available online.
EPA's proposed 2014 RFS rule would reduce the 2014 statutory gallon requirements for cellulosic biofuels, advanced biofuels, and corn ethanol. Governor Branstad testified at EPA's recent hearing in Arlington, Virginia, on the proposed rule that it would have detrimental effects on the biofuels industry and rural economy in his state and other Midwestern states. The Iowa delegation expresses in the letter the same concern, and argues that EPA should hold a field hearing in Iowa to hear from Midwestern farmers and producers who could not attend the Virginia hearing and who would be disproportionally impacted by the proposed reductions.
On December 12, 2013, Senators Dianne Feinstein (D-CA) and Tom Coburn (R-OK) introduced the Corn Ethanol Mandate Elimination Act of 2013, which would eliminate the corn ethanol gallon requirements under the federal RFS, while leaving in place those under the law for cellulosic and advanced biofuels and biodiesel. The sponsors have argued that the RFS corn ethanol mandate, which increases to 15 billion gallons per year by 2022, should be removed to combat the recent increase in corn prices. The bill currently has eight bi-partisan co-sponsors, including Senators Richard Burr (R-NC), Susan Collins (R-ME), Bob Corker (R-TN), Kay Hagan (D-NC), Jeff Flake (R-AZ), Joe Manchin (D-WV), Jim Risch (R-ID), and Patrick Toomey (R-PA).
The corn ethanol industry has argued that the RFS has had negligible impact on corn supply and prices, and that recent increases in the price of corn are attributed to the corresponding increase in the cost of energy used to make and transport the commodity.
EPA has awarded Dow a Presidential Green Chemistry Challenge Award for its EVOQUETM Pre-Composite Polymer. Among other attributes, according to EPA, EVOQUETM is expected to improve titanium dioxide (TiO2)-based paints. "Dow's EVOQUETM technology uses a polymer coating that, when applied to TiO2, improves dispersion of the pigment, decreasing the amount of the chemical needed and allowing it to work better. This technology will significantly reduce energy usage, water consumption, NOx and SOx emissions, and algae bloom." More information is available online and here.
On December 11, 2013, EPA gave a Green Chemistry award to Professor Richard Wool of the University of Delaware for his work to develop biobased products such as adhesives, composites, and foams from renewable feedstocks, including vegetable oils, chicken feathers, and flax. The EPA grants Green Chemistry Awards each year to recognize "landmark green chemistry technologies developed by industrial pioneers and leading scientists that are contributing to the use of chemicals and products that are safer for people's health and the environment." More information on the 2013 Green Chemistry Awards is available online.
Representative Frank Lucas (R-OK), Chair of the U.S. House Committee on Agriculture, filed a bill this week to extend for one month, the 2008 Farm Bill to pave way for the completion of the five-year reauthorization bill when Congress returns from its winter break in January. The House of Representatives is scheduled to recess this Friday, on December 13, 2013, while the U.S. Senate is not scheduled to recess until next Friday, December 20, 2013.
Members of the Farm Bill Conference Committee, led by the leaders of the House and Senate Agriculture Committees (the four principals), have been working to merge the House and Senate passed versions of the legislation and settle on a final bill for enactment by the end of the year. Key sticking points remain on the level of cuts to the food stamp program and the implementation of farm subsidies. In addition, representatives of the biofuels and renewable chemical industries are also advocating strongly that the final bill should include the Senate version of the energy title, which would provide $900 million in mandatory funding for Farm Bill energy programs, and extend eligibility to renewable chemical producers.
If Congress fails to pass either an extension of the 2008 Farm Bill or a new five-year Farm Bill by January, an antiquated supply-side 1949 law will kick in, driving up milk prices among other things. That law includes no support for renewable energy programs. Senate Majority Leader Harry Reid (D-NV) and Senator Debbie Stabenow (D-MI), Chair of the U.S. Senate Committee on Agriculture, have both publicly denounced any short term extension and any plans of the House of Representatives to recess for the year before completing the next Farm Bill. Reportedly, Majority Leader Reid has stated that he will not bring any short term extension up for a vote. The staffs of the four principals were meeting on Thursday, December 12, 2013, to complete as much of the framework for the next Farm Bill as possible to reduce the need for a short term extension and increase the likelihood a final bill could pass shortly after Congress returns to work after the first week of January.
It has been reported this week that the new Director of the Department of Energy's (DOE) Loan Program Office has stated DOE's intent to restart its renewable energy loan guarantee program in 2014. DOE is expected to issue a new round of $3 billion in loan guarantees for renewable energy projects. Although DOE still has billions in loan guarantee authority for renewable energy, it halted the program a couple of years ago in the wake of heavy criticism following the failure of Solyndra, a solar company that went bankrupt after receiving a DOE loan guarantee.
This week, three Members of the U.S. Senate Committee on Environment and Public Works (EPW), Senators David Vitter (R-LA), Mike Crapo (R-ID), and James Inhofe (R-OK), introduced the General Duty Clarification Act of 2013. The bill would direct the U.S. Environmental Protection Agency (EPA) to clarify standards for the Clean Air Act's General Duty Clause. EPA has used the ambiguity contained in the clause to regulate chemical plants. A copy of the bill is available online.
All sides of the federal Renewable Fuel Standard (RFS) debate had another chance to air their views on Wednesday at the Senate EPW Committee "Oversight Hearing on Domestic Renewable Fuels." Hearing details are available online.
Witnesses included representatives from EPA, DOE, industry, and major trade associations representing the oil and gas and biofuels industries. Their testimony was consistent with their previous actions and statements. For instance, EPA testified in support of its 2014 proposed RFS rule, which for the first time would reduce volumetric targets for all biofuels, including corn ethanol. The biofuels industry argued that the volumetric reductions in the proposed rule go too far, and that Congress should maintain the current version of the RFS law. In contrast, the oil and gas industry advocated that Congress act to repeal the RFS law.
EPW Committee Members weighed in with their divergent views during their opening remarks and throughout the hearing. For instance, Committee Chair Senator Barbara Boxer (D-CA) stated that she sees no need for Congress to act given the inherent regulatory flexibility contained in the existing law, and since EPA has sought to address industry concerns about the blend wall in the proposed rule. On the other end of the spectrum, Senator John Barrasso (R-WY) stated that EPA's action demonstrates that the RFS is not working and that Congress should act to repeal it.
On December 11, 2013, the U.S. Departments of Agriculture (USDA) and Navy announced that as part of their joint "Farm-to-Fleet" initiative, the acquisition of biofuel blends will be included into regular Department of Defense domestic solicitations for jet engine and marine diesel fuels. The Navy will seek to purchase JP-5 and F-76 advanced drop-in biofuels blended from 10 to 50 percent with conventional fuels. Funds from USDA's Commodity Credit Corporation will assist the effort.
The Navy and USDA plan to hold an "Industry Day" to explain the effort on January 30, 2014. A copy of the USDA press release on the announcement is available online.
In 2011, DOE, USDA, and the Navy announced a joint $510 million effort to help promote the commercialization of domestic advanced drop-in biofuels for military and commercial use. The Navy and DOE have been challenged with securing their portion of the funding through the appropriations process. Several in Congress have criticized the cost of the biofuels compared to traditional sources of energy. Under the initiative announced this week, the Navy will expect that drop-in biofuels will be available for less than $4 per gallon by 2016, making them competitive with traditional sources of fuel.
On December 9, 2013, 60 companies sent a letter to the leaders of the U.S. House Ways and Means Committee and U.S. Senate Committee on Finance urging them to extend various biofuels incentives. These incentives, including the $1.00 per gallon credit for biodiesel, are scheduled to expire at the end of the year. While industry was able to secure extension of these incentives last year in legislation to prevent the "fiscal cliff," the prognosis for similar success is diminished in light of the current comprehensive tax reform effort. The companies are against any proposal that would allow the biofuels tax credits to expire with the intent that they will be included in broader tax reform.
This week, the Biobased and Renewable Products Advocacy Group (BRAG™) participated in the Biotechnology Industry Organization's Pacific Rim Summit on Biotechnology and Bioenergy in San Diego, California. The Summit included over 400 attendees with broad interest and involvement in biofuels and renewable chemicals. During the Summit, BRAG Executive Director Kathleen M. Roberts gave a presentation titled "The Here and Now of TSCA," in which she emphasized the criticality of including regulatory compliance into any company's commercialization plans, and outlined certain sections of the Toxic Substances Control Act (TSCA) applicable to biobased chemical manufacturers. Ms. Roberts highlighted the TSCA Inventory and Chemical Data Reporting (CDR) issues that can catch biobased chemical manufacturers off-guard and potentially lead to six-figure penalties, curtailed production, and/or very non-"Green" warnings and restrictions being required on labels and packaging. Her presentation helped clarify reporting thresholds and what role byproducts play in an entity's TSCA reporting requirements. A copy of the presentation is available online.
Renewable energy company Sapphire Energy, Inc. and Phillips 66 have entered into a joint development agreement designed to promote and facilitate the commercial production of Sapphire's algae-based crude oil, which will be made into fuels. According to Sapphire's press release describing the agreement, "the companies will work together to collect and analyze data from co-processing of algae and conventional crude oil into fuels. The goal is to complete fuel certifications to ready Sapphire Energy's renewable crude oil, called Green Crude, for wide-scale oil refining." Further, "under the agreement the companies will expand Sapphire Energy's current testing programs to further validate that Green Crude can be refined in traditional refineries and meet all of the Environmental Protection Agency's (EPA) certification requirements under the Clean Air Act." A copy of the press release is available online.
Renewable fuel and chemical company Virent and cellulosic sugar producer Renmatix have announced plans to collaborate to convert cellulosic sugars to renewable chemicals and biobased packaging materials. According to Virent's press release on the effort, "Renmatix's Plantrose™ platform will be evaluated and potentially optimized to provide an affordable sugar stream for Virent's Bioforming® process for the large-scale production of bio-based paraxylene. Paraxylene is a basic raw material used in the manufacture of purified terephthalic acid (PTA), an important chemical in the production of plastic bottles and fibers made from polyethylene terephthalate (PET). Integrating local feedstock processing with on-site commercial production will lower costs and increase the viability of using renewable chemicals in bio-based packaging and plastics for industrial and consumer goods." Virent's press release is available online.
This week, Evonik Industries and LanzaTech announced that they have entered into a three year research agreement under which Evonik will "combin[e] its existing biotechnology platforms with LanzaTech's synthetic biology and gas fermentation expertise for the development of a route to bio-processed precursors for specialty plastics from waste derived synthesis gas. In this route, microorganisms placed in fermenters are used to turn synthesis gas into chemical products." A copy of Evonik's press release is available online.