By Lynn L. Bergeson
On June 28, 2018, the U.S. Senate passed S.3042 -- Agriculture Improvement Act of 2018 (Farm Bill) with a vote of 86-11. This bill includes mandatory funding for Energy Title programs, including the Biomass Research and Development Initiative; the Biobased Markets Program; the Biorefinery, Renewable Chemical and Product Manufacturing Assistance Program; the Bioenergy Program for Advanced Biofuels; the Rural Energy for America Program (REAP); and the Biomass Crop Assistance Program (BCAP). In addition to securing funding for a range of bioenergy programs, the legislation also expands the types of renewable chemical and biobased product technologies that are eligible for funding. The U.S. House of Representatives version of this bill, H.R. 2, was passed on June 21, 2018, and does not include mandatory funding for Energy Title programs. While this funding was not included in H.R. 2, a previous vote to repeal the Energy Title programs was defeated in the House on May 17, 2018, by a vote of 75-340, signaling strong bipartisan support of the programs. (See the Biobased and Renewable Products Advocacy Group (BRAG®) Blog post “Bipartisan Support Keeps Energy Title Programs In Farm Bill.”) The differences between the House and Senate versions of the Farm Bill will be resolved in committee.
By Kathleen M. Roberts
On June 13, 2018, representatives of the Biobased and Renewable Products Advocacy Group (BRAG®) and representatives of the Biotechnology Innovation Organization (BIO) met with U.S. Environmental Protection Agency (EPA) staff to discuss the two groups’ white paper, “Proposal for a Toxic Substances Control Act (TSCA) Inventory Representation and Equivalency Determinations for Renewable and Sustainable Bio-based Chemicals.” BRAG and BIO members provided a presentation for EPA staff that outlined the regulatory challenges and market impendence facing the biobased industry related to current naming conventions. BRAG and BIO look forward to further dialogue with EPA on this crucial issue.
By Lynn L. Bergeson
On May 17, 2018, a proposed amendment to repeal the Farm Bill’s energy title programs was defeated in the U.S. House of Representatives by a vote of 75-340. These title programs provide grants and loan guarantees to rural lenders and businesses, as well as research and development support for renewable energy products. While these programs account for less than one percent of the total amount that the federal government spends on agriculture and nutrition programs, they provide a strong return on investment and provide vital access to capital for rural businesses. Lloyd Ritter, Director of the Agriculture Energy Coalition, stated, “The House of Representatives’ overwhelming vote shows that there is strong, bipartisan support for the energy title programs. These programs support more than 1.5 million U.S. workers who manufacture biobased products and help rural America adopt new technologies for renewable energy economic opportunities. The final farm bill must include an Energy Title, with strong mandatory funding and necessary updates for the vital programs.”
By Lynn L. Bergeson
On May 8, 2018, President Trump met with a group of Republican Senators and told them that he is considering allowing exported ethanol to count toward the volumes mandated by the Renewable Fuel Standard (RFS). During this meeting, Mr. Trump also reiterated support for expanding sales of E15, and withdrew his verbal proposal to cap the price of RINs, which had been widely criticized by the ethanol industry. These announcements came after increasing concern about the future stability of the RFS after the U.S. Environmental Protection Agency (EPA) recently granted over two dozen hardship waivers to small refineries for 2017, a drastic increase from EPA’s prior practice of granting between six to eight hardship waivers annually.
The ethanol industry reacted favorably to some of these proposals, with the Biotechnology Innovation Organization (BIO), a member of the Biobased and Renewable Products Advocacy Group (BRAG®), releasing a statement thanking President Trump for rejecting the RIN cap and for his support of year round sales of E15. Brent Erickson, Executive Vice President of BIO’s Industrial & Environmental Section, stated: “Ensuring that E15 can be sold year round in states and regions where it is already approved will give advanced and cellulosic ethanol more opportunity to compete in the market in coming years. E15 reduces the price of gasoline by 5 to 15 cents per gallon, and it lowers tailpipe and greenhouse gas emissions all year round. . . . BIO and its members continue to oppose unnecessary changes to the Renewable Fuel Standard. EPA has already provided unwarranted waivers to oil refiners that are destroying demand for all biofuels and undercutting industry investments. We thank Senators Grassley and Ernst for standing with us in opposition to the damaging proposal for a cap on RIN prices.” Mr. Trump’s proposal to allow RINs from exported ethanol to count towards mandated volumes under the RFS was greeted with more caution, with Erickson stating: “We remain concerned about the impact counting RINs from exported renewable fuels would have on the development of advanced biofuels and we look forward to working with the Senators to ensure the RFS continues to promote production and use of homegrown biofuels.” Kevin Skunes, President of the National Corn Growers Association, was also distrustful of this proposal, stating: “Offering RIN credits, which are supposed to be derived from a domestic renewable fuel use, for ethanol exports would threaten trade markets and impact corn farmers’ economic livelihoods.”
By Lynn L. Bergeson
On April 30, 2018, 18 pro-ethanol Senators sent a bi-partisan letter to U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt requesting a “transparent timeline … on the regulatory pathway forward to address the Reid Vapor Pressure (RVP) issue,” “an expected timeline of the rulemaking process to clarify how the agency will make this change to allow higher ethanol blends access to the marketplace” and “immediate clarity to allow higher ethanol blends to be sold in the interim while the outdated regulation is being changed” as related to President Trump’s commitment to allow for 15 percent ethanol blends (E15) to be sold year-round and Pruitt’s statements in an EPA budget hearing in front of the House Energy and Commerce Committee’s Subcommittee on Environment regarding EPA’s issuance of a waiver that would allow year-round sales of gasoline containing 15 percent ethanol.
By Lynn L. Bergeson
On April 12, 2018, House Agriculture Committee Chair Michael Conaway (R-TX) released the Committee’s draft Farm Bill reauthorization, the “Agriculture and Nutrition Act of 2018” (H.R. 2). The 600-plus page draft legislation includes a number of provisions that will be of interest to Biobased and Renewable Products Advocacy Group (BRAG®) members and the biofuel industry, including the following sections:
- Sec. 6402. Biobased markets program. Section 6402 amends section 9002(i) of the Farm Security and Rural Investment Act of 2002 by authorizing appropriations of $2,000,000 per fiscal year and reauthorizing the program through 2023. Additionally, the section prohibits other federal agencies from placing limitations on procurement of wood products.
- Sec. 6403. Biorefinery, renewable, chemical, and biobased product manufacturing assistance. Section 6403 amends section 9003 of the Farm Security and Rural Investment Act of 2002 by expanding eligibility of eligible projects. The section authorizes appropriations of 48 $75,000,000 per fiscal year and reauthorizing the program through 2023.
- Sec. 6405. Bioenergy program for advanced biofuels. Section 6405 amends section 9005(g) of the Farm Security and Rural Investment Act of 2002 by authorizing appropriations of $50,000,000 per fiscal year and reauthorizing the program through 2023.
- Sec. 6406. Biodiesel fuel education program. Section 6406 amends section 9006(d) of the Farm Security and Rural Investment Act of 2002 by authorizing appropriations of $2,000,000 per fiscal year and reauthorizing the program through 2023.
- Sec. 6410. Biomass Crop Assistance Program. Section 6410 amends section 9011(f) of the Farm Security and Rural Investment Act of 2002 by authorizing appropriations of $25,000,000 per fiscal year and reauthorizing the program through 2023.
- Section 7509. Biomass research and development. Section 7509 amends section 9008(h) of the Farm Security and Rural Investment Act of 2002 to reauthorize appropriations for biomass research and development through fiscal year 2023.
The full text of H.R. 2 and a section-by-section summary are available on the House Agriculture Committee Farm Bill webpage along with several related fact sheets. The House Agriculture Committee marked-up and passed the bill package on April 18, 2018. The House is likely to hold a floor vote in early May.
By Lynn L. Bergeson
Representative Scott Peters (D-CA) recently introduced the Algae Agriculture Act of 2018 (H.R. 5373) to the House of Representatives. The bill, sponsored by Representatives Andy Biggs (R-AZ), Derek Kilmer (D-WA), and Darin LaHood (R-IL), would provide similar advantages to algae cultivators and harvesters as those that exist for traditional crop farmers under U.S. agricultural policy. These advantages include: updating the U.S. Department of Agriculture’s (USDA) National Institute of Food and Agriculture to include algae, which will provide funding for additional research into ways to utilize algae; making rural electric cooperatives eligible for Carbon Capture and Use (CUU) projects using algae; and providing crop disaster assistance for algae cultivation. “Algae can become a natural pathway to improve soil health on farms, manage water resources, nutrient run-off, and utilize carbon in a way that earns revenue and reduces climate change impacts,” stated Mark Allen, Vice President of Integrated Carbon Solutions at Accelergy Corporation and Vice Chair of Algae Biomass Organization’s (ABO) board of directors. “This bill is an important step toward making algae farming and other algae technologies an important part of American agriculture.”
By Lynn L. Bergeson
On March 8, 2018, Senator Tom Udall (D-NM) and Representative Peter Welch (D-VT) introduced companion legislation (S. 2519, H.R. 5212) in the U.S. Senate and U.S. House of Representatives, respectively, to reform the Renewable Fuel Standard (RFS). The Growing Renewable Energy through Existing and New Environmentally Responsible (GREENER) Fuels Act aims to:
- Phase out the corn ethanol mandate and immediately reduce the amount of ethanol in fuel by as much as one billion gallons by capping the amount of ethanol that can be blended into conventional gasoline at 9.7 percent;
- Help farmers return cornfields to pasture and wildlife habitat through a ten cents per renewable identification number (RIN) fee to fund a new private land protection and restoration fund in the U.S. Treasury; and
- Extend the cellulosic next generation biofuel mandate until two billion gallons of annual production is achieved or 2037, whichever is soonest, and improve the way the mandate is implemented to produce liquid transportation fuels that dramatically reduce greenhouse gas (GHG) emissions.
According to Representative Welch, the “legislation reforms the mandate to dramatically reduce its environmental impact and to support the continued growth of advanced biofuels.”
By Lynn L. Bergeson
On March 6, 2018, a coalition of over 200 companies and trade associations sent a letter to the Agricultural Committee leaders in the House and Senate urging the reauthorization of and stable mandatory funding for the energy title programs in the next Farm Bill reauthorization. The letter states that the Farm Bill energy title programs have greatly assisted rural America in developing clean, renewable energy, biobased products, and making energy efficiency investments for more than 15 years with an incredibly modest, cost-effective investment. The less than one tenth of one percent of Farm Bill spending dedicated to the programs has allowed for ag-based entrepreneurs to launch initiatives to generate jobs and economic development in areas such as biogas and advanced biofuels, biopower, biobased products, renewable chemicals, and energy efficiency. Additionally, the letter provides recommendations for further improving the energy title programs. For example, the Biorefinery Assistance Program (BAP) could be opened fully to standalone renewable chemical companies; the Rural Energy for America Program (REAP) could be enhanced to support a fuller range of important, proven, market-ready technologies; and the Biomass Crop Assistance Program (BCAP) could be effective in continuing to support biomass energy development and sustainably address hazardous fuels reduction efforts in our nation’s forests.
By Lauren M. Graham, Ph.D.
As explained in the notice issued by Neste, a member of the Biobased and Renewable Products Advocacy Group (BRAG®), with President Trump’s signing of the Bipartisan Budget Act of 2018 (H.R. 1892), the blenders tax credit was extended retroactively for 2017. Qualified biofuel blenders are eligible for a tax credit of $1.00 per gallon of biodiesel or renewable diesel used in the blending process in 2017. The blenders tax credit was one of several biofuel-related tax incentives that were extended retroactively. The incentives, which also include tax credits for second-generation biofuel production and alternative fuel vehicle refueling property, and a special allowance for second generation biofuel plant property, were not extended through 2018.