On Monday, the 41 member bicameral Farm Bill Conference Committee announced that it had reached agreement on a compromise Farm Bill, the Agriculture Act of 2014. A copy of the legislation is available online. The Conference Committee was led by House Agriculture Committee Chair Frank Lucas (R-OK), Ranking Member Collin Peterson (D-MN), Senate Agriculture, Nutrition and Forestry Committee Chair Debbie Stabenow (D-MI), and Ranking Member Thad Cochran (R-MS). A copy of the Senate Agriculture Committee press release on the compromise legislation is available online.
The bill includes $881 million in mandatory funding for renewable energy programs over the next ten years, and extends eligibility to renewable chemicals for the first time. It continues the majority of the energy programs covered under the 2008 Farm Bill, including the Biobased Markets and Biorefinery Assistance Programs, and the Biomass Crop Assistance Program to help encourage and facilitate the growth of purpose grown energy crops to be used for energy production. The legislation will modify the existing Biorefinery Assistance Program to create the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program that would expand funding eligibility to producers of renewable chemicals and biobased products. This mandatory funding and expanded eligibility marks a big victory for the biofuels and renewable chemicals and products industries.
The House of Representatives passed this compromise Farm Bill on Wednesday, January 29, 2014. The Senate is expected to take it up for consideration and potentially vote on it as early as the end of this week. The President is expected to sign it.
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.
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.
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.
It is reported that Research and Development non-profit Battelle, headquartered in Columbus, Ohio, has a pilot project in which an 18-wheel tractor trailer would be used to convert biomass onsite using a catalytic pyrolysis into oil that could be used to produce renewable chemicals or biofuels. This model could be used throughout the country to help facilitate the conversion of myriad types of biomass into oils for renewable chemicals and biofuels production in a cost effective manner. It would eliminate the cost of transporting massive amounts of biomass to production facilities and reduce the need for much more expensive commercial production facilities.
On January 22, 2014, there were reports of two explosions at the JNS Biodiesel LCC biodiesel plant in northern Mississippi. No one was injured. The plant is designed to use poultry fat as the feedstock to produce eight million gallons of biodiesel each year. The news comes as the biodiesel industry is advocating its potential production beyond EPA's proposed 2014 and 2015 requirements.
A research team from the University of Wisconsin at Madison reportedly has developed a promising process using a renewable chemical for biofuels production. Under the process, the researchers used biobased gamma valerolactone (GVL) to break down plants and produce sugars for the production of biofuels. The use of the biobased material could make the process more sustainable and affordable. The findings are published in the January 17, 2014, issue of the journal Science.
Boeing has been working to find sustainable jet fuel. In 2011, for instance, the Company worked to include a blend of up to 50 percent aviation biofuel in international jet fuel specifications. On January 14, 2014, Boeing announced that it "has identified 'green diesel,' a renewable fuel used in ground transportation, as a significant new source of sustainable aviation biofuel that emits at least 50 percent less carbon dioxide than fossil fuel over its lifecycle. The company is working with the U.S. Federal Aviation Administration and other stakeholders to gain approval for aircraft to fly on green diesel, further reducing the aviation industry's carbon emissions." A copy of the Company's press release on this announcement is available online.