EPA received approximately 16,000 comments by the January 28, 2014, deadline for the public to weigh in on the EPA's proposed 2014 Renewable Fuel Standard (RFS) renewable volume obligations (RVO). Industry organizations from all interested stakeholders made submissions.
For the first time, EPA proposed to reduce the statutory RFS RVOs for corn ethanol and advanced biofuels, in addition to cellulosic biofuels. Under the proposal, EPA would use "a combination of" both of its RFS waiver authorities to achieve these reductions. EPA justified its proposed reductions by concentrating on whether there would be sufficient supply of all of the renewable fuels. EPA broadly defined supply to include other factors such as the ability to consume the fuels and distribution capacity.
Representatives of the biofuels industry, including the American Coalition for Ethanol, Advanced Biofuels Association, Biotechnology Industry Organization, Growth Energy, and the Renewable Fuels Association, urged EPA to reconsider the proposed RVOs and warned of negative consequences on biofuels production if it did not. Many comments from the biofuels industry argued that EPA did not have the authority to reduce advanced and total renewable volumes in 2014 as it proposed.
The American Petroleum Institute and American Fuel and Petrochemical Manufacturers filed joint comments in support of EPA's proposal. Among other things, these groups argue that EPA does have the authority to make its proposed reductions to the 2014 RVOs. They warn of significant supply and economic consequences if EPA maintains the statutory RVOs for 2014.
EPA is expected to issue in final the 2014 RFS RVOs this Spring.
On January 24, 2014, seven Democratic Members of Congress from Iowa, Minnesota, and Illinois sent a letter to President Obama requesting a meeting with the White House to discuss the proposed reductions to the 2014 RVOs. The same group of Congressmen met recently with EPA Administrator Gina McCarthy to urge EPA to reconsider the proposed reduction. In the January 24, 2014, letter, the Congressmen stress the potentially negative impact of the proposed reductions on the economies in the Midwest and the continued development of biofuels. A press release containing the text of the letter issued by one of the seven Members requesting the meeting, Representative Tim Walz (D-MN), is available online.
On January 28, 2014, 32 food industry groups sent a letter to the House Energy and Commerce Committee calling for Congress to act through the legislative process to reduce the annual RVOs under the RFS. The groups argue that the proposed reductions to the 2014 RVOs by EPA do not go far enough. They argue that Congress needs to act to avoid what they predict will be negative impacts on commodities and energy markets, as well as the environment and economy.
On January 27, 2014, Arkema introduced biobased Pebax® for ski boot production. According to the company's press release, Pebax® Rnew 80R53 is 50% more rigid than existing Pebax® grades, already well-known for several years as reference materials for both alpine touring and cross-country ski boots. A copy of the press release is available online.
Mercedes-Benz is collaborating on a pilot cellulosic ethanol project with specialty chemical companies Clariant and Haltermann. According to the press release issued by Clariant, "[o]ver the next twelve months, test fleet vehicles can be refilled with the new [E20 cellulosic ethanol] fuel at a specially equipped gas station on the Mercedes-Benz site in Stuttgart-Untertürkheim. The cellulosic ethanol comes from Clariant's sunliquid® demonstration plant in Straubing, where approximately 4500 tons of agricultural residues such as grain straw or corn stover are converted into cellulosic ethanol each year. At the Haltermann plant in Hamburg the bioethanol is mixed with selected components to form the innovative fuel, the specifications of which reflect potential European E20 fuel quality." A copy of the press release is available online.
In an article appearing in the January/February 2014 issue of The Environmental Forum, a publication of the Environmental Law Institute, the Biobased and Renewable Products Advocacy Group's (BRAG™) Lynn L. Bergeson and Kathleen M. Roberts discuss the latest developments in the U.S. Environmental Protection Agency's (EPA) approach under the Toxic Substances Control Act (TSCA) to biobased chemicals, and offer strategies on how biobased chemical manufacturers can best navigate current TSCA requirements.
"Sustainability is a watchword for many brand owners, especially those that market to consumers, and renewable chemicals can facilitate the marking off of many boxes on the 'environmentally preferred' checklist. One big box that remains unchecked and curiously sometimes unnoticed altogether is an understanding of the application of TSCA to renewable chemicals. We discuss here TSCA's requirements and restrictions, offer a few thoughts for stakeholders to assure the successful marketing of these chemical products, and explain why there is an urgent need for an even playing field within TSCA and its implementing regulations that will promote and not discourage the development of new, greener chemical substances."
The full article can be found here.
On January 9, 2014, 7,500 gallons of a coal processing chemical, 4-methylcyclohexane methanol, stored in an above-ground tank owned by Freedom Industries leaked into the Elk River just upstream from the local water utility's intake pipe serving Charleston, West Virginia. Regulators banned residents' use of the water for five days. Since the release, concerns have been expressed about the adequacy of information regarding the chemical's safety and health risks, an issue that has been repeatedly raised with respect to chemicals "grandfathered" under TSCA.
The incident has provided a new push for legislative TSCA reform. On January 13, 2014, Representatives Henry Waxman (D-CA), Ranking Member of the U.S. House Energy and Commerce Committee, and Paul Tonko (D-NY), Ranking Member of the U.S. House Energy and Commerce Committee's Subcommittee on the Environment and the Economy, sent a letter to the Subcommittee's Chair John Shimkus (R-IL) urging that he hold a hearing to "examine the regulatory gaps" exposed by the January 9 chemical spill in West Virginia. They assert in the letter that "[a]s [Congress] begin[s] to consider ideas to reform the Toxic Substances Control Act (TSCA), it is critically important that we understand how the law allowed a potentially harmful chemical to remain virtually untested for nearly forty years." A copy of the letter is available online.
On the same day, Lynn L. Bergeson, Managing Partner of Bergeson & Campbell, P.C. and Of Counsel to BRAG, was featured on the National Public Radio (NPR) program "All Things Considered" to discuss the chemical spill. Ms. Bergeson expressed her hope that the incident will spark new interest in TSCA reform. The press release on Ms. Bergeson's comments is available online.
To date, no hearing is scheduled on TSCA reform before the House Energy and Commerce Committee's Subcommittee on Environment and the Economy. The House Transportation and Infrastructure Committee is expected to hold a hearing on the spill sometime soon in Charleston, West Virginia. The Senate Environment and Public Works (EPW) Committee is also expected to hold a hearing on the spill.
On January 16, 2014, the U.S. Department of Justice (DOJ) announced that it has indicted two individuals in biodiesel fraud schemes worth more than $37 million. A copy of DOJ's press release is available online. James Jariv and Nathan Stoliar have been charged with 57 counts of conspiracy, wire fraud, false statements made under the Clean Air Act, obstruction of justice, and conspiracy to engage in money laundering. In one scheme, the two allegedly generated more than $7 million in fraudulent renewable fuel credits under the federal Renewable Fuel Standard (RFS), which were then sold to obligated parties that needed them to meet their annual renewable volume obligations (RVO) under the RFS. In another, they allegedly failed to provide the U.S. government with $30 million in renewable fuel credits.
This case is significant because it is the fifth major biodiesel Renewable Identification Numbers (RIN) fraud case since 2011. It comes at a time when (1) EPA is working to prepare in final its proposed RFS Quality Assurance Plan to avoid cases of RIN fraud; (2) the biodiesel industry is advocating for increased biodiesel RVOs over what EPA has proposed for 2014 and 2015; and (3) the biofuels industry is fighting to sustain confidence in the RIN market and the statutory RFS RVOs in all renewable fuel categories. It could provide RFS opponents, including many in the refining sector, an additional argument in their quest to repeal the RFS.
On January 23, 2014, EPA issued letters to the American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers (AFPM) partially answering their October 2013 petitions for consideration of the final rulemaking, "Regulation of Fuels and Fuel Additives: 2013 Renewable Fuel Standards; Final Rule," published in the Federal Register on August 15, 2013. In its letters, EPA explains that it is granting the petitions by AFPM and API for reconsideration of the 2013 cellulosic biofuel standard under the RFS. EPA explained that it came to this decision in light of KiOR, Inc.'s downgraded production projections for 2013. KiOR has been the largest U.S. producer of cellulosic biofuels, and EPA largely depended on the availability of the Company's projected volumes to help ensure obligated parties under the RFS could meet their 2013 cellulosic biofuel requirements.
While welcomed by API and AFPM, this announcement comes at a time when the biofuels industry -- and the cellulosic biofuels industry in particular -- is under increasing attack by API, AFPM, and other stakeholders in the refining, agriculture, and food sectors. Several leaders within the biofuels industry had urged EPA not to grant the petitions by AFPM and API for reconsideration of the 2013 cellulosic biofuel standards under the RFS.
On January 22, 2014, the largest U.S. biodiesel producer, the Renewable Energy Group, Inc.® (REG), headquartered in Ames, Iowa, announced that it has acquired renewable chemical producer LS9, Inc. for over $61 million. LS9 will be renamed REG Life Sciences LLC and will produce renewable chemicals and products. A copy of REG's press release is available online.