On February 20, 2014, the National Highway Traffic Safety Administration's (NHTSA) proposed rule on "Alternative Fuel Vehicle Badging, Fuel Compartment Labels and Consumer Information on Alternative Fuel Usage" was published in the Federal Register. Comments are due to NHTSA by April 21, 2014. A copy of the proposed rule is available online.
The proposed rule would require badges, labels, and owner's manual information for new passenger cars, low speed vehicles (LSV), and light-duty trucks rated at not more than 8,500 pounds gross vehicle weight in order to increase consumer awareness regarding the use and benefits of alternative fuels. It would require manufacturers to identify each vehicle capable of running on an alternative fuel by means of a permanent and prominent display affixed to the exterior of the vehicle; add proposed text describing the capabilities and benefits of using alternative fuels to the owners' manuals provided for alternative fuel vehicles; and identify each vehicle that is capable of running on an alternative fuel by means of a label in the fuel filler compartment.
NHTSA reportedly believes the rule will help increase the use of alternative fuels in light-duty vehicles, while helping to decrease harmful greenhouse gas emissions as directed under the Energy Independence and Security Act of 2007 (EISA). These goals are also consistent with the intent of the federal RFS, which was enhanced under EISA. The RFS is designed to encourage the increased production and use of renewable fuels to 36 billion gallons by 2022.
U.S. House Ways and Means Committee Chair Dave Camp (R-MI) and U.S. Senate Finance Committee Chair Ron Wyden (D-OR) are expected to take different approaches to tax reform this year. Camp has stated publicly his intent to focus solely on comprehensive tax reform, which he and his staff have been working on for over a year. He is expected to release a discussion draft of comprehensive tax reform legislation in the coming months.
Meanwhile, newly designated Chair Wyden has publicly expressed support for the idea of comprehensive tax reform, but is expected to focus his near term efforts on passing legislation retroactively to extend several renewable energy incentives that expired at the end of 2013. These incentives include tax credits for the production of biofuels, including cellulosic and biodiesel. Senate Finance Committee Members Charles Grassley (R-IA) and Maria Cantwell (D-WA) have recently introduced legislation to extend the expired $1 per gallon biodiesel incentive, which could be included in a more comprehensive tax extender package.
Given this election year, as well as the divergent approaches of the two Chairmen of the tax writing committees, it will likely be difficult to get comprehensive tax reform legislation and possibly even a tax extender package passed in 2014.
Senators Barbara Boxer (D-CA) and Sheldon Whitehouse (D-RI) are leading a new Senate Task Force on Climate Change designed to combat stated plans by some in the Republican leadership to weaken President Obama's expected upcoming Executive actions to address climate change. While legislative action on climate change remains unlikely this year, Members of the Senate Task Force are doing what they can to highlight the issue. To this end, Senator Brian Schatz (D-HI) is organizing an all-night Senate floor session during which the issue of climate change will be discussed. The session is expected to take place sometime in March 2014.
On February 20, 2014, Lux Research released a new report, "Cultivating Capacity for Bio-Based Materials and Chemicals Through 2017." According to the report, the U.S. is on track to become the leader in global biobased materials and chemicals by 2017, with production expected to double between now and then. First generation feedstocks are expected to remain the main source of biobased feedstocks by 2017.
On February, 19, 2014, it was announced that BioAmber Sarnia, Inc. (BioAmber Sarnia) has received a $10 million loan from the Government of Canada to help the company build the largest commercial plant that will produce biobased succinic acid. Funding is being provided under the Canadian Government's AgriInnovation Program, which is an initiative designed to accelerate the pace of innovation by supporting research and development activities in agri-innovations. The BioAmber Sarnia project is expected to create 60 direct and 155 indirect jobs, and help corn farmers by requiring in the first year of production 1.5 million bushels of corn and in future years three million bushels per year. Succinic acid is used to produce a wide range of products, including paints, plastics, resins, and pharmaceuticals. A copy of BioAmber's news release on the announcement is available online.
The Department of Energy's (DOE) Bioenergy Technologies Office will host the second of two workshops on algae biofuels strategy on March 26-27, 2014, in Charleston, South Carolina. A copy of the agenda is available online.
The workshop will focus on the research and development still needed to achieve affordable, scalable, and sustainable algae-based biofuels. It will cover topics including barriers to commercialization for algae biofuels and appropriate metrics for success. It comes five years after DOE organized the National Algal Biofuels Technology Roadmap workshop. The workshop is intended to help DOE in its strategic development, evaluating the National Algal Biofuels Technology Roadmap, and planning a breakout session at the Office's annual Bioenergy Conference in 2014.
Participants may register online.
The U.S. Environmental Protection Agency (EPA) announced that it has awarded more than $3 million in funding to four research institutions to study how chemicals behave when they come into contact with biological systems. The projects will focus on developing better models that predict the connection between exposures to chemicals and the chain of events that lead to an unwanted health effect. The results are expected to assist EPA in its mission to protect human health and the environment, to inform and impact EPA's chemical safety research, and to develop solutions for more sustainable chemicals and use computational science to understand the relationship between chemical exposures and health outcomes. A copy of EPA's press release is available online.
On February 11, 2014, Representative Dave Loebsack (D-IA) introduced H.R. 4051, the Renewable Fuel Utilization, Expansion, and Leadership (Re-FUEL) Act. The bill currently has no co-sponsors. The bill is designed to help fuel retailers with investments in renewable and alternative fuel infrastructure to provide consumers with the increased ability to choose alternative fuels at the pump. It would create a competitive grant program through the U.S. Department of Agriculture (USDA) to invest in renewable and alternative fuel infrastructure. Grants would be awarded to develop new or to retrofit existing infrastructure, including pumps for biofuels and hydrogen, tanks, piping, and electric vehicle chargers. Applicants would be required to provide a 30 percent non-federal match and the maximum grant to each entity per year would be $100,000. A copy of the bill is available online.
Representative Loebsack is a vocal supporter of the federal Renewable Fuel Standard (RFS) and has joined some of his colleagues to urge EPA to reconsider the Agency's current proposal to reduce the volumes of corn-starch ethanol and advanced biofuels under the law in 2014. Expanding the available distribution infrastructure as proposed in H.R. 4051 would help increase the availability and use of fuels with higher ethanol blends, including E85. This increased availability would help address the blend wall concerns cited as the driving factor for the proposed RFS volume reductions.
On February 13, 2014, Senators Maria Cantwell (D-WA) and Chuck Grassley (R-IA) introduced S. 2021, a bill to extend and reform the $1 per-gallon biodiesel tax credit that expired on December 31, 2013. The bill would extend this credit for three years through 2017. It would provide a $1 per-gallon tax credit for the production of biodiesel, renewable diesel, and aviation jet fuel that complies with fuel standards and the Clean Air Act. The bill would modify the definition of biodiesel to encourage production from any biomass-based feedstock, or recycled oils and fats. It would increase the credit to $1.10 per-gallon for the first 15 million gallons of biodiesel produced by small producers with an annual production capacity of less than 60 million gallons. In addition, the bill would restrict the credit to fuel producers to ensure the credit goes to domestic biodiesel production and to prevent eligibility of fuel blenders that could potentially add a very small amount of biodiesel to petroleum diesel (a practice known as "splash and dash") to qualify.
This bill would likely be added to a larger tax extender package that new Senate Committee on Finance Chair Ron Wyden (D-OR) has said he is interested in moving through the Committee in the near future. It would be significant for the biodiesel industry, which produced .7 billion gallons more in 2013 when the biodiesel tax credit was available than in 2012 when Congress let the credit expire.
On February 17, 2014, GOJO Industries announced the launch of its new GOJO® ECOPREFERRED™ Pumice Hand Cleaner. The Hand Cleaner is a USDA Certified Biobased product under the Department's BioPreferred Program. To qualify for the BioPreferred Program, hand cleaners must have a minimum of 64 percent biobased content. A copy of GOJO's press release on the announcement is available online.
On February 10, 2014, the U.S. House Committee on Transportation and Infrastructure convened a field hearing in Charleston, West Virginia, on "The Charleston, West Virginia Chemical Spill." On January 9, 2014, a coal processing chemical, 4-methylcyclohexane methanol (MCHM), stored in an aboveground tank owned by Freedom Industries leaked into the Elk River in West Virginia. The leak compromised the water supply to nine counties in the state affecting some 300,000 residents. Due to a lack of toxicological data on MCHM, health officials were delayed in identifying a safe use level and once one was calculated, detractors claimed it was questionable due to the paucity of actual data. The incident has quickly become a basis for accelerating reform of the Toxic Substances Control Act (TSCA), a theme that was discussed at the hearing. A summary of the background and issues discussed at the field hearing is available online.
Several witnesses testified that the spill and the fact that authorities are unwilling to declare the affected water in West Virginia "safe" due to a lack of toxicological information on MCHM illustrates the need for TSCA reform. A recent Biobased and Renewable Products Advocacy Group (BRAG™) report on the spill and similar calls for new legislative action on TSCA is available online.
During the hearing, Representative Shelley Moore Capito (R-WV) announced that she has introduced H.R. 4024, the Ensuring Access to Clean Water Act on February 10, 2014. The legislation would require states to create programs to oversee chemical storage facilities and inspect aboveground storage tanks. States without primacy would have programs created by the U.S. Environmental Protection Agency (EPA). A copy of the bill is available online.
Senate legislation has also been introduced to address the spill and calls for new chemical safety and security protections. On January 27, 2014, Senators Joe Manchin (D-WV), Barbara Boxer (D-CA), Chair of the Environment and Public Works (EPW) Committee, and Jay Rockefeller (D-WV) introduced the Chemical Safety and Drinking Water Protection Act of 2014. The bill would amend the Safe Drinking Water Act by adding Part G -- Protection of Surface Water from Contamination by Chemical Storage Facilities. The bill is intended to strengthen states' ability to prevent chemical spills such as that of January 9, 2014. A fact sheet regarding the bill is available online.
Bergeson & Campbell, P.C. (B&C®) has issued a memorandum providing an overview of the new Senate bill. The memorandum is available online.
It is reported that House Energy and Commerce's Subcommittee on the Environment and Economy Chair John Shimkus (R-IL) is working on draft legislation to reform TSCA, which Shimkus expects to introduce and on which he expects to hold a hearing in the coming weeks. B&C has issued a memorandum providing an overview of the Subcommittee's fifth hearing on TSCA reform held on February 4, 2014. The memorandum is available online.
There is a renewed sense of urgency for TSCA reform to be completed this year in the wake of the chemical spill into the Elk River in West Virginia last month, and the recent announcements that House Energy and Commerce Ranking Member Henry Waxman (D-CA) is retiring this year and that Senator David Vitter (R-LA) is running for Governor of Louisiana. Representative Waxman is a champion of environmental issues and may view accomplishing TSCA reform important before he leaves, especially since it appears unlikely that a bill to address climate change -- one of his most passionate issues -- will pass this year. Senator Vitter is the co-sponsor of the Senate's bi-partisan TSCA reform bill, S. 1009, the Chemical Safety Improvement Act (CSIA). B&C has issued a memorandum providing an overview and analysis of CSIA. The memorandum is available online.
Following the confirmation of Senator Max Baucus as the next Ambassador to China, on February 11, 2014, Senate Democrats voted to shift the leadership and make-up of impacted Committees. Senator Ron Wyden (D-OR) will now be the Chair of the Senate Finance Committee, while Senator Mary Landrieu (D-LA) will take over as Chair of the Senate Energy and Natural Resources Committee. Newly elected Senator Ed Markey (D-MA) will now serve on the Senate EPW Committee.
Senator Landrieu is reportedly working to identify her priorities for the Senate Energy Committee. She is known to be a supporter of the Keystone XL oil pipeline and for increased opportunities for liquefied natural gas exports. The coal industry has stated its public support for Senator Landrieu's new position.
Senator Markey is a longtime champion of environmental issues and will likely add to the momentum to reform TSCA. The Senate version of TSCA reform legislation, S.1009, CSIA, must pass through the Senate EPW Committee before being considered by the full Senate.
The 5th Annual Bio-Based and Sustainable Chemicals Summit, held last week in San Diego, California, brought together nearly 200 industry leaders to discuss and debate the critical developments the industry is currently facing, including innovative feedstocks, end-user applications, and progress of established and new chemical production platforms and applications. Session topics included "Feedstocks for the Future -- Availability and Selection," "Direct Conversion of Biomass to Sugars or Other Products," "C3 – C6: Biobased Building Block Chemicals," "Emerging Biobased Polymers and Monomers," and "Spurring Market Adoption -- Brand Owner and Chemical Major Perspectives." In addition, there were case studies presented on biobased acrylic acid, biobased succinic acid, and licensing efforts in cellulosic biofuels.
Kathleen M. Roberts, Executive Director of BRAG and Chair of the Summit, commented that "It was exciting to hear of the remarkable progress this innovative industry has made over the last few years. As a young industry, there is tremendous value in the larger community coming together to collaborate and compare notes on the science, business, and regulatory successes, as well as setbacks. I was very impressed with the in-depth case study presentations, the frank panel discussions, and the thought-provoking question and answer sessions. It was an honor to be among this gathering of the best and brightest in the sector."
Lawrence D. Sloan, President of SOCMA, added that "This conference brought together true start-ups, advanced start-ups ready to license their technologies to big chemical companies, industry consultants, non-profits, government agencies, and financing professionals, offering attendees four days of excellent networking opportunities. The case studies helped highlight the fact that industrial biotechnology has the potential to reduce our dependence on fossil fuels while utilizing waste agricultural products that would otherwise be discarded. For the most part, the so called 'green premium' does not exist, and the early innovators must compete ever harder against the incumbent players."
Those who did not attend are encouraged to watch for news of the 6th Summit, tentatively scheduled for February 2015. There are a number of excellent upcoming conferences at which BRAG will present and/or lead panels, including the BIO World Congress in Philadelphia, Pennsylvania, in May 2014, and the 18th Annual Green Chemistry and Engineering Conference in Bethesda, Maryland, in June 2014. See the "Seminars and Conferences" page of BRAG's website for details.
On February 11, 2014, Archer Daniels Midland Company (ADM) announced that the company has committed to a $25 million equity investment in Rennovia, Inc., a privately held company that develops catalysts and processes for the cost-advantaged production of chemical products from renewable feedstocks. According to ADM's press release on the announcement, the company is making this investment as "part of ADM's ongoing efforts to enhance returns by strengthening [its] portfolio of higher-margin products." A copy of ADM's press release is available online.