By Lynn L. Bergeson and Carla N. Hutton
 
On December 1, 2022, the U.S. Environmental Protection Agency (EPA) announced a multi-part proposal that will build on the Renewable Fuel Standard (RFS) program and seek to advance the priorities of energy security, less pollution, and consumer protection. The RFS “Set” proposal requests public input on required volumes of biofuel for the next one to three years and on a series of modifications intended to strengthen and expand the program. EPA states that this proposal includes steady growth of biofuels for use in the nation’s fuel supply for 2023, 2024, and 2025. EPA notes that because the Energy Independence and Security Act of 2007 (EISA) does not include volumes after 2022, this is the first time that EPA is setting these proposed biofuel volume targets without using those outlined in statute. According to EPA, when setting biofuel volumes for years after 2022, EPA must consider a variety of factors specified in the statute, including costs, air quality, climate change, implementation of the program to date, energy security, infrastructure issues, commodity prices, and water quality and supply.
 
EPA is seeking comment on the proposed volumes and how to balance appropriately these factors so that the program works for renewable fuel growers and producers, refiners and the union workers who operate these facilities, and fuel consumers. According to EPA, because the rule is an opportunity to take a “fresh look” at many aspects of the program, EPA is also seeking comment on how the rule can intersect with continued viability of domestic oil refining assets, including merchant refineries, how best to support novel fuels like sustainable aviation fuels and clean hydrogen, and how to account for the new and updated incentives in the Inflation Reduction Act.
 
EPA will also propose new regulations governing the generation of qualifying renewable electricity made from renewable biomass that is used for transportation fuel in electric vehicles. EPA seeks comment on this new component of the RFS program that would tie electricity generation from renewable biomass into the program for the first time. EPA has posted a pre-publication version of the proposed rule. Comments on the proposed rule are due February 10, 2023.
 
EPA will hold a virtual public hearing on January 10, 2023, on its proposed rule. 87 Fed. Reg. 76194. If necessary, EPA will hold an additional session on January 11, 2023. EPA asks that all attendees register by January 3, 2023.

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By Lynn L. Bergeson and Carla N. Hutton
 
The U.S. Department of Energy (DOE) Bioenergy Technologies Office (BETO) has postponed the webinar originally scheduled for December 13, 2022, on the “SAF Grand Challenge Roadmap: Soaring Towards Sustainable Fuel Production Goals.” According to BETO, the webinar will take place in early 2023. As reported in our November 29, 2022, blog item, the webinar will cover the six action areas that support the Grand Challenge’s goals of:

• Reducing life cycle greenhouse gas emissions (GHG) by 50 percent compared to conventional fuel;
• Producing enough sustainable aviation fuels (SAF) to meet 100 percent of aviation fuel demand by 2050; and
• Enhancing fuel sustainability.

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By Lynn L. Bergeson and Carla N. Hutton
 
The U.S. Department of Energy (DOE) Bioenergy Technologies Office’s (BETO) Chemical Catalysis for Bioenergy Consortium (ChemCatBio) will hold a webinar on December 14, 2022, on what is ahead for the consortium. From 2020 to 2022, ChemCatBio’s research and development (R&D) focus was on improving carbon efficiency during catalytic conversion to drive down minimum fuel selling price. ChemCatBio states that now, with three more years of funding, it aims to develop and advance biomass and waste conversion technologies for hard-to-decarbonize fuels and chemicals to achieve greater than 70 percent greenhouse gas (GHG) emissions reduction, and to provide foundational knowledge to address risks associated with catalyst/process durability and carbon efficiency. During the webinar, ChemCatBio Deputy Director Dan Ruddy will share highlights from the last three years of consortium R&D. He will then present plans for the next three years, focusing on process integration and fuel production with engineered catalysts.

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By Lynn L. Bergeson and Carla N. Hutton
 
The U.S. Department of Energy (DOE) Bioenergy Technologies Office (BETO) will hold a webinar on December 13, 2022, on the “SAF Grand Challenge Roadmap: Soaring Towards Sustainable Fuel Production Goals.” Attendees will learn about the six action areas that support the Grand Challenge’s goals of:

• Reducing life cycle greenhouse gas emissions (GHG) by 50 percent compared to conventional fuel;
• Producing enough sustainable aviation fuels (SAF) to meet 100 percent of aviation fuel demand by 2050; and
• Enhancing fuel sustainability.

The webinar will feature the director of BETO and speakers from DOE and the National Renewable Energy Laboratory, who will discuss engaging with industry to achieve these goals. Speakers will include:

• Valerie Reed: Director, BETO;
• Zia Haq: Senior Analyst, BETO;
• Craig Brown: Bioenergy Systems Technical Integration Lead, National Renewable Energy Laboratory; and
• Mark Shmorhun: Technology Manager, Systems, Development, and Integration, BETO.

Registration is now open.

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By Lynn L. Bergeson and Carla N. Hutton
 
The U.S. Government Accountability Office (GAO) published a report on November 3, 2022, entitled Renewable Fuel Standard: Actions Needed to Improve Decision-Making in the Small Refinery Exemption Program. The Renewable Fuel Standard (RFS) requires that gasoline and diesel fuels be blended with a minimum volume of renewable fuel. Small refineries can petition the U.S. Environmental Protection Agency (EPA) annually for an exemption from their RFS obligations based on disproportionate economic hardship. EPA must evaluate small refinery exemption petitions in consultation with the Department of Energy (DOE). Congressional requesters asked GAO to review issues related to EPA’s and DOE’s implementation of the small refinery exemption program. GAO examined the information, policies, and procedures EPA and DOE use to make decisions about exemptions and the extent to which exemption decisions are timely. GAO analyzed data and documents related to exemptions from 2013 through 2021 and interviewed agency officials and industry stakeholders.
 
According to GAO, EPA does not have assurance that its decisions about small refinery exemptions under the RFS are based on valid information. In addition, EPA and DOE do not have policies and procedures specifying how they are to consult about and make exemption decisions.

• Information. Small refinery exemption decisions for compliance years 2019 through 2021 were based on an EPA conclusion that small refineries do not experience disproportionate economic hardship from the RFS. GAO states that this conclusion relies on a potentially flawed assumption -- that all parties pay and receive one price for the tradable credits used to demonstrate compliance with the RFS. GAO found that EPA has not analyzed whether this assumption is valid. GAO’s analysis showed that small refineries have paid more on average for compliance credits than have large refineries. Without reassessing its conclusion, EPA does not have assurance that its small refinery exemption decisions are based on valid information.
   
• Policies and procedures. According to GAO, EPA has generally documented its decisions. EPA has no policies or procedures for how it assesses petitions and makes exemption decisions, however. Similarly, DOE does not have policies or procedures for how it provides consultation to EPA. GAO states that administration of the program has been inconsistent, and the number of exemptions granted and denied has varied from year to year. Consequently, agency decisions appear ad hoc, resulting in market uncertainty. This can harm small refineries and renewable fuel producers by undermining their ability to plan for infrastructure upgrades and renewable fuel demand.

GAO states that EPA has routinely missed the 90-day statutory deadline for issuing exemption decisions and does not have procedures to ensure that it meets these deadlines. In five of the nine years GAO analyzed, EPA took more than 200 days to issue a decision for more than half of the petitions submitted. According to GAO, these late decisions diminish the benefit of exemptions, create market uncertainty, discourage investment, and undermine the design of the RFS more broadly.
 
GAO made seven recommendations, including that EPA reassess its conclusion that all small refineries recover their RFS compliance costs in the price of the gasoline and diesel they sell; that DOE and EPA develop documented policies and procedures for making small refinery exemption decisions; and that EPA develop procedures to ensure that it meets deadlines. DOE agreed with GAO’s recommendations. EPA disagreed with one recommendation and partially agreed with the others. GAO “maintains that the recommendations are valid.”

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By Lynn L. Bergeson and Carla N. Hutton
 
The National Academies of Sciences, Engineering, and Medicine (NASEM) announced on October 19, 2022, the release of a report finding that life cycle assessments (LCA) of transportation fuels are valuable tools for measuring environmental impacts, but uncertainties remain in the current models and further research should be conducted to strengthen their reliability. The report recommends ways to improve models, increase reporting and transparency, perform targeted verification of emissions, and other avenues that will better inform policymaking for reducing greenhouse gas (GHG) emissions from transportation fuels. According to NASEM, LCAs have been increasingly applied in the development of transportation fuel policy to estimate and help reduce GHG emissions from fuels such as electricity, biofuels, synthetic fuels, and hydrogen. NASEM states that the report finds that there is no single LCA method capable of answering all questions related to the climate impacts of a transportation fuel, and that both attributional LCA (ALCA) and consequential LCA (CLCA) have important roles to play. CLCA, which considers the consequences of a policy or decision, such as the market effects of production changes, should be used to understand wide-ranging impacts of proposed changes on net GHG emissions. ALCA, which assigns portions of observed environmental impacts from human activities to specific goods and services, can be used to attribute emissions in well-defined supply chains and help identify opportunities to reduce carbon intensity throughout that supply chain. Hybrid methods that use a combination of process-based and economic input-output methodologies can also be useful in some circumstances. In all cases, modelers should provide transparency, justification, and sensitivity or robustness analysis for modeling choices.
 
NASEM notes that the report contains a number of other findings and recommendations for assessing the emissions of specific transportation fuels and their feedstocks, including the following for biofuels:

• Study of land use changes from biofuels has been the topic of intense study over the last decade. Substantial uncertainties remain on key components of the models used to assess the impacts. More research into this area should be supported; and
• Biofuel production facilities typically produce additional products. The distinction between what qualifies as a co-product, byproduct, or waste can be unclear, creating uncertainty in LCA models.

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By Lynn L. Bergeson and Carla N. Hutton
 
On October 28, 2022, the U.S. Department of Agriculture’s (USDA) Rural Business-Cooperative Service (RBCS) and Rural Utilities Service (RUS) announced a request for information (RFI) and notice of public listening sessions on how to implement newly allocated funding opportunities under the Inflation Reduction Act (IRA). 87 Fed. Reg. 65188. It is anticipated that these funds will support new projects related to rural electric system resiliency, biofuels, renewable energy technologies, and more. USDA requests comments on specific questions in the RFI, as well as on any other topics relevant to implementation. Written comments are due November 28, 2022. USDA will also host two public listening sessions:

• November 3, 2022, focused on IRA Sections 22001, 22002, and 22003. The two-hour listening session is aimed at renewable energy generation providers, distribution utilities, transportation fueling facilities, fuel distribution facilities, environmental advocates and other environmental groups, and other federal agencies; and
   
• November 4, 2022, focused on IRA Section 22004. The two-hour listening session is aimed at electric cooperatives, environmental advocates, and other environmental groups.

Registration is required.

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By Lynn L. Bergeson and Carla N. Hutton
 
On October 6, 2022, the European Maritime Safety Agency (EMSA) announced the availability of a report entitled Update on Potential of Biofuels in Shipping, updating a previous study developed by EMSA on biofuels and examining the full range of biofuels from the perspective of current production capacity, storage and distribution infrastructure, and power-generation technologies. According to EMSA, the report also features techno-economic analyses and includes risk-based case studies to evaluate the potential of biofuels for the maritime sector. According to EMSA, among the broad spectrum of technology and fuel-solution pathways available for ship designers, builders, owners, and operators, biofuels potentially offer medium- and long-term marine fuel alternatives that can enter the market relatively quickly; they also offer the potential, if sustainability criteria are met, to reduce carbon output compared to traditional carbon-based fossil fuels. EMSA notes that although the current use of biofuels in marine-engine applications is very limited, there is significant potential for biofuels to capture a larger share of the total maritime fuel consumption and support the European Union (EU) and International Maritime Organization’s (IMO) greenhouse gas (GHG)-reduction ambitions for the maritime industry. EMSA states that “[r]ecent regulatory developments in the EU covering GHG emissions and the lifecycle aspect of fuels provide a basket of measures in line with the climate goals that could accelerate their adoption.” The “drop-in” characteristics of biofuels -- the possibility to replace conventional petroleum-refined hydrocarbons without substantial modifications to engines, fuel tanks, pumps, or supply systems -- may offer “an immediate, attractive and cost-effective solution, for the existing fleet.”

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By Lynn L. Bergeson and Carla N. Hutton
 
The U.S. Environmental Protection Agency (EPA) published a final rule on September 2, 2022, establishing an optional alternative renewable identification number (RIN) retirement schedule for small refineries under the Renewable Fuel Standard (RFS) program for the 2020 compliance year. 87 Fed. Reg. 54158. Small refineries that elect to use the alternative RIN retirement schedule will have to comply fully with their 2020 RFS obligations, including any RIN deficits from 2019 carried forward into the 2020 compliance year, by February 1, 2024. According to the final rule, the goal of the alternative RIN retirement schedule is to support small refineries in their transition into positions where they will be able to comply with their renewable volume obligations (RVO) on an ongoing basis. EPA notes that this will also ensure the use of renewable fuels in the United States as required by the RFS program and help provide certainty in the RFS program and fuels markets, given the “unique circumstances” as a result of its June 2022 actions, denying 60 small refinery exemption (SRE) petitions for the 2016-2021 compliance years that were still pending. The final rule was effective on September 2, 2022.

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By Lynn L. Bergeson and Carla N. Hutton
 
The Congressional Research Service (CRS) published a CRS report, updated on September 19, 2022, entitled The Bioeconomy: A Primer. The report provides an overview of the bioeconomy, details the efforts of the United States and other selected nations pertaining to the bioeconomy, and offers policy considerations for strengthening the role of the United States in the global bioeconomy. The report does not examine the policies and programs of individual sectors that contribute to the bioeconomy (e.g., biofuels, biomanufacturing, pharmaceuticals, or agriculture), but instead discusses the bioeconomy from a macro level perspective.
 
According to the report, issues for consideration regarding advancement of the U.S. bioeconomy that could be pursued by Congress include:

• Development and Implementation of a National Strategy: The National Academies of Sciences, Engineering, and Medicine (NASEM) and others have recommended that the federal government develop and regularly update a national bioeconomy strategy. As reported in our September 13, 2022, blog item, on September 12, 2022, President Joseph Biden signed Executive Order (EO) 14081 “to coordinate a whole-of-government approach to advance biotechnology and biomanufacturing towards innovative solutions in health, climate change, energy, food security, agriculture, supply chain resilience, and national and economic security.” According to the report, the policies and activities included in the EO appear to respond to NASEM’s recommendation for a more comprehensive vision and approach to advancing the U.S. bioeconomy. If Congress is interested in further supporting the U.S. bioeconomy, it may consider codifying some of the efforts initiated under the EO or establishing an alternative high-level coordination body tasked with developing, implementing, and evaluating a comprehensive U.S. bioeconomy strategy. It could also continue to support a more decentralized framework that encourages sector specific programs and activities related to the bioeconomy. The report states that “[r]egardless of the approach, sustainment of bioeconomy policies and programs across presidential Administrations and Congresses will likely be necessary for maintaining U.S. leadership in the future bioeconomy.” The report acknowledges that ensuring long-term engagement, including the provision of sufficient resources, “is often challenging.”
   
• Investment in Research and Development (R&D): According to the report, many experts call for increased federal investment in R&D to maintain U.S. leadership in the bioeconomy. In general, experts highlight the life sciences, computing and information sciences, engineering, and biotechnology for increased support, and many also emphasize the convergence of such disciplines. Beyond investments in basic and applied research in areas deemed critical to advancing the bioeconomy, some call for improvements in bioeconomy-related R&D infrastructure, including biomanufacturing platforms and pilot facilities. The report states that Congress may find that a more holistic view of its investments in and oversight of biological research, infrastructure, and data is necessary. At least 25 federal agencies and departments support biological R&D, and the jurisdiction of such agencies spans multiple congressional committees, making coordination, oversight, and coherence of bioeconomy policies and investments more challenging.
   
• Promotion of Regional Efforts: The report states that to have ready access to biological resources (e.g., crops, forests), implementation of many aspects of the bioeconomy will occur at the regional scale and involve rural communities. According to the report, policies to encourage the development of bioeconomy clusters and regions, including resources for planning and the creation of networks that facilitate collaboration between diverse stakeholders, including firms from divergent sectors and small businesses, are common. The report notes that it is unclear if existing programs and efforts to support regional innovation and technology-based economic development, including in rural areas, are sufficient to advance the bioeconomy. Congress may examine the size, scope, effectiveness, and synergy of existing programs, in addition to creating new programs or modifying existing programs to promote regional bioeconomy efforts.
   
• Creating a Market for Biobased Products: The report states that an analysis by the Organization for Economic Cooperation and Development (OECD) found that bioeconomy-related policies focus primarily on supply-side or technology push measures (i.e., support for R&D and demonstration efforts). According to the report, OECD emphasized the importance of public procurement in helping to create a market for biobased products and recognized the U.S. Department of Agriculture’s (USDA) BioPreferred Program “as the most advanced effort in this regard.” Despite the relative success of the program, NASEM identified some areas for improvement, including updating the reporting mechanisms involved in the federal procurement of biobased products, setting procurement targets, and increasing funding for the program to enable increased awareness and standardized reporting.
   
• Developing a Bioeconomy Workforce: According to the report, “[t]here is broad consensus that access to a skilled workforce is essential to advancing the bioeconomy,” and “it is also clear that bioeconomy education and training should be multidisciplinary in nature.” As noted by OECD, “the long-standing conundrum of multidisciplinary education is the need for both breadth and depth to graduate people with problem-solving abilities,” however. Additionally, according to OECD, the bioeconomy workforce needs more undergraduates than doctorates. The report states that Congress may examine federal investments in bioeconomy training, education, and workforce development and the progress of the federal government in attaining the goals outlined in its strategic plan on science, technology, engineering, and mathematics (STEM) education.
   
• Public Engagement and Acceptance: The report states that due to the significance of public acceptance, a number of countries are pursuing public engagement and awareness activities and policies. In a 2017 study, NASEM recommended that federal agencies invest in new methods of understanding the ethical, legal, and societal implications (ELSI) of future biotechnology products. Congress may conduct additional oversight on federal efforts to enhance public awareness and acceptance of biobased products and services and may also consider the level of resources allocated toward ELSI-related research across federal agencies, as well as the coordination of such efforts.
   
• International Collaboration: According to the report, most bioeconomy-related policies and strategies are focused at the national level with some exceptions (e.g., the European Union (EU)). In the United States, some states, such as Maine and Michigan, have engaged in bilateral collaborations. The report states that Congress “may examine the state of international collaboration on the bioeconomy and the need for congressional direction in this regard.”
   
• Sustainability and Creating a Circular Economy: A number of nations, especially those in the EU, are increasingly connecting their bioeconomy strategies and policies to action plans associated with creating a more sustainable and circular economy. Many countries see a connection between the bioeconomy and a circular economy as a means to address a number of the Sustainable Development Goals (SDG). Congress may consider the degree to which U.S. bioeconomy policies and activities can or should be tied to and aligned with achieving the SDGs. Additionally, while the use of waste material as a feedstock is central to a circular economy, there are often challenges to its use. Congress may examine any regulatory impediments or other barriers to creating a circular economy.

The crosscutting nature of the bioeconomy, in addition to the diversity of potential benefits associated with its growth and advancement, offer a number of reasons for increased congressional interest in bioeconomy policies. The crosscutting nature of the bioeconomy also poses potential challenges to effective policymaking, including the harmonization of policies and coherent governance. Moreover, it likely means that the growth and success of the U.S. bioeconomy will depend, in part, on effective public-private partnerships in research, innovation, education, and workforce development. Transitioning to a biobased economy would take sustained commitment, including balancing short-term actions and long-term planning, removing barriers to such a transition, and creating the opportunity for radical innovation. Congress may decide there is no need to reorganize or group together federal activities, including some long-standing efforts, under a bioeconomy framework. It may decide to pursue bioeconomy-related policies through new or existing sector-specific focused efforts, or it may decide current policies and activities are sufficient. Regardless, other countries are adopting policies and strategies to advance their bioeconomies. Such efforts have the potential to challenge U.S. leadership in biotechnology and other bioeconomy-related sectors that many view as critical to national security and economic competitiveness.

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