On April 10, 2014, the U.S. Environmental Protection Agency (EPA) released its strategic plan through 2018. A copy of the plan is available online. It includes statements by EPA reinforcing its commitment to enhancing implementation of the Toxic Substances Control Act of 1976 (TSCA) and the federal Renewable Fuel Standard (RFS) over the next four years.
In the 99-page document, EPA reiterates its position supporting enhancing TSCA. To that end, EPA stresses that "[p]otential legislative action to reauthorize TSCA is both a key external factor and a key emerging issue. Consistent with the Administration's essential principles, EPA's authority under TSCA should be modernized and strengthened to increase confidence that chemicals used in commerce are safe and do not endanger public health and welfare."
In its strategic plan, EPA also states that it intends to continue to work to "streamline" the implementation of the federal RFS, "including the annual standard-setting process and new fuel pathway approvals." The Agency also asserts that it "will also strengthen its oversight of industry compliance with RFS standards and core fuels and fuels additive registration mandates through a voluntary third-party quality assurance program to verify that renewable identification numbers (RINs) have been validly generated. In addition, proposed modifications to the exporter provisions of the RFS program will help to ensure that an appropriate number and type of RINs are retired whenever renewable fuel is exported."
On April 11, 2014, the American Petroleum Institute (API) and American Fuel & Petrochemical Manufacturers (AFPM) petitioned the U.S. Court of Appeals for the District of Columbia Circuit to place a hold on their challenge to EPA's 2013 RFS final rule until EPA completes its reconsideration of the rule. EPA joined in the motion.
Just days earlier, on Monday, April 7, 2014, the parties to the litigation challenging EPA's 2013 final RFS rule, including API, AFPM, and EPA, were in court arguing the merits of the case. The Biobased and Renewable Products Advocacy Group's (BRAG™) coverage of these oral arguments is available online.
API, AFPM, and ExxonMobil urged EPA and the Office of Management and Budget (OMB) to eliminate the ability of biodiesel producers to sever RINs from batches of fuels produced as part of an upcoming final rule establishing a quality assurance program for the fuels credit market.
The rule, as proposed, would establish qualifications for third-party auditors who would determine the validity of the RINs. It would also establish audit procedures for renewable fuel production facilities, including minimum frequency, site visits, review of records, and reporting requirements. The rule is open for comment now, and EPA is requesting feedback on whether renewable fuel producers should be allowed to separate and sell their own RINs. The groups emphasized that allowing biodiesel producers to separate and sell fuel credits creates opportunities for fraud in the RIN market.
Biodiesel producers are authorized to sever RINs from fuel batches and sell them as credits to comply with the annual RFS blending mandates. This generates two revenue streams -- one from fuel sales, and another from RIN credit sales. This anomaly resulted from a settlement between 30 refiners and other companies and EPA in April 2013, where $3.65 million was paid to EPA in penalties for purchase of fraudulent credits. The National Biodiesel Board and the Renewable Energy Group emphasized that "[t]he biodiesel marketplace is not as mature as other biofuel markets" and "often the value of the RIN provides biodiesel producers with [their] only opportunity to create a margin."
On April 11, 2014, Barnhardt Manufacturing Company (Barnhardt) announced that its HyDri™ Cotton product has earned a U.S. Department of Agriculture (USDA) Certified Biobased Product label under the Department's BioPreferred Program. Barnhardt's press release on the announcement is available online. USDA's description of the meaning of a USDA Certified Biobased Product label is available online.
On April 9, 2014, Montana-based renewable chemicals producer Rivertop Renewables (Rivertop) announced that it has raised $26 million from Cargill, First Green Partners, and existing investors. The Company explains in its press release that it "will leverage these funds and an existing manufacturing relationship to produce market development quantities of salts of glucaric acid for select customers. In addition, it will complete construction and begin operations at a semi-works facility at its headquarters in Missoula, where it will optimize its process for world-scale deployment. Rivertop plans to hire more than 20 employees in the next 12 months to support commercial development, effectively doubling the size of its workforce." A copy of the Company's press release is available online.
On April 8, 2014, House Committee on Ways and Means Chair Dave Camp (R-MI) held a hearing on the "Benefits of Permanent Tax Policy for America's Job Creators." The hearing focused on the expiring business tax provisions that are made permanent or extended under Camp's recently released discussion draft of the "Tax Reform Act of 2014" (TRA). Unlike his Senate counterpart -- Senate Committee on Finance Chair Ron Wyden (D-OR) -- Camp is not very supportive of passing a tax extender package to extend retroactively the approximately 50 incentives that expired at the end of 2013, including several for advanced biofuels development. In fact, the TRA would eliminate most clean energy incentives. The House Ways and Means Hearing Advisory is available online.
Last week, the Senate Finance Committee approved its version of tax extender legislation, the "Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act." The EXPIRE Act includes extensions through December 31, 2015 (and retroactive to January 1, 2014) of the following key biofuels incentives that have expired: the Alternative Fuel Refueling Property Credit; the Second Generation Biofuel Producer Tax Credit; the Special Depreciation Allowance for Second Generation Biofuel Plant Property; the Biodiesel and Renewable Diesel Fuels Credit; and the Alternative Fuel and Alternative Fuel Mixture Excise Tax Credit. A copy of the EXPIRE Act is available online. A summary of the bill is available online.
Whether a tax extenders package will pass this year depends on several factors. It is likely to be more difficult to pass in the House of Representatives than in the Senate.
On April 8, 2014, the Senate Committee on Agriculture, Nutrition and Forestry held a hearing on "Advanced Biofuels: Creating Jobs and Lower Prices at the Pump." The following witnesses testified at the hearing: Mr. Richard Childress, CEO, Richard Childress Racing, LLC; Mr. Jan Koninckx, Global Business Director for Biorefineries, DuPont Industrial Biosciences; Mr. Brooke Coleman, Executive Director, Advanced Ethanol Council; Dr. Sumesh Arora, Vice President, Innovate Mississippi, Director of Strategic Biomass Solutions; and, Ms. Nancy Young, Vice President, Environmental Affairs, Airlines for America. More information about the hearing is available online.
Senate Agriculture Committee Chair Debbie Stabenow (D-MI) held the hearing to highlight positive developments in the advanced biofuels space. Stabenow's home state of Michigan has a heavy biobased manufacturing sector and the Senator has been working hard to garner federal support for the industry. She is opposed to the U.S. Environmental Protection Agency's (EPA) proposed 2014 Renewable Fuel Standard (RFS) rule that would lower the 2014 renewable volume obligations (RVO) for corn ethanol, cellulosic biofuels, and advanced biofuels. At the hearing this week, witnesses warned that lowering the 2014 RVOs for corn ethanol and advanced biofuels will chill investment in U.S. biofuels.
EPA Administrator Gina McCarthy made a recent public statement suggesting that the 2014 RFS rule is expected to be finalized by June.
On April 7, 2014, the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments in Monroe Energy, LLC v. EPA (No. 13-1265). In the case, Monroe Energy, a subsidiary of Delta Airlines, the American Petroleum Institute (API), and the American Fuel & Petrochemical Manufacturers (AFPM) are challenging EPA's final 2013 RFS rule. The plaintiffs' arguments include that the rule should be overturned because EPA improperly considered the availability of carryover Renewable Identification Numbers and illegally issued the rule in final nine months after the statutory deadline to do so.
Several large biofuels trade associations intervened in the case on behalf of EPA, including the Biotechnology Industry Organization, Renewable Fuels Association, Growth Energy, and the National Biodiesel Board. They asked the court to uphold the 2013 RFS rule, but to not address the bounds of EPA's discretion to reduce RFS volume requirements due to concerns related to the E10 "blendwall."
Plaintiffs have asked the court for an expedited ruling before the June 30, 2014, compliance deadline for the 2013 RFS requirements.
On April 8, 2014, the U.S. Senate Committee on Environment and Public Works (EPW) held a hearing to consider the following three nominees for EPA posts: Janet McCabe, nominated for EPA Assistant Administrator for the Office of Air and Radiation (OAR); Ann Dunkin, nominated for EPA Assistant Administrator for the Office of Environmental Information; and Manny Ehrlich, nominated to be a member of the Chemical Safety Board. Consideration of the nomination of McCabe to become Assistant Administrator for OAR appeared to be the most contentious. Several Republican Members of the EPW Committee expressed their concerns with several EPA rules coming out of the OAR, including the proposed regulation of power plant emissions from new and existing plants.
A copy of EPW Committee Chair Barbara Boxer's (D-CA) opening statement, which references the experience of the three nominees, is available online.
On April 3, 2014, the U.S. Department of Agriculture (USDA) announced that it has launched a website that provides details on Farm Bill implementation. The website provides useful information on USDA's implementation of the Farm Bill and includes information on the economic implications of the bill's implementation prepared by the Economic Research Service.