The Biobased and Renewable Products Advocacy Group (BRAG) helps members develop and bring to market their innovative biobased and renewable chemical products through insightful policy and regulatory advocacy. BRAG is managed by B&C® Consortia Management, L.L.C., an affiliate of Bergeson & Campbell, P.C.

On November 1, 2013, the Biotechnology Industry Organization (BIO), Growth Energy, and RFA filed a motion to intervene on behalf of EPA in the current lawsuit by Monroe Energy, the American Petroleum Institute (API), and the American Fuel and Petrochemical Manufacturers (AFPM) challenging EPA's final rule establishing the 2013 RVOs under the federal RFS. The filing was made in the U.S. Court of Appeals for the District of Columbia Circuit, where the case is pending. Copies of press releases issued by BIO, Growth Energy, and RFA are available online.


 

The Internal Revenue Service (IRS) has released an advice memorandum from the agency's Office of Chief Counsel determining that "y electing the § 6426(c) excise tax credit [biodiesel mixture credit] and/or the § 6427(e) excise tax payment instead of the § 40A income tax credit, a blender is not required by § 87 or by § 61 to include in its gross income the amount of the § 6426(c) excise tax credits and/or the § 6427(e) payments that it claims." A copy of the memorandum is available online.

Tags: Tax, biofuels

 

On October 30, 2013, the Conference Committee selected to merge the House and Senate versions of the next five-year Farm Bill met to begin formal negotiations. This Farm Bill Conference Committee is comprised of 41 bi-partisan Members of the U.S. House and Senate.


Though Farm Bill Conference Committee negotiations are expected to be difficult, pressure is on Members of Congress to pass a final version of the next five-year bill by the end of this year. If it fails to do so, farm policy will be governed by an outdated supply-side permanent law from 1949. In that situation, milk prices would be expected to increase sharply, among other things. In addition, the old law includes nothing to cover or help promote renewable energy, including biofuels and renewable chemicals.


Earlier this year, the U.S. Senate passed its version of the next five-year Farm Bill, S. 954, including funding for farm, nutrition, and energy programs. Importantly, the Senate bill continues and provides mandatory funding for existing Farm Bill energy programs and extends eligibility to renewable chemicals. It includes $4 billion in cuts to nutrition programs. After failing to pass a combined bill, the U.S. House of Representatives passed a "farm-only" bill this summer and then a separate "nutrition-only" bill cutting $40 billion in food stamps. The House farm-only Farm Bill contains an energy title without mandatory funding that will instead be subject to annual appropriations, and it does not extend the energy programs to renewable chemicals.


The biofuels and renewable chemicals industries continue efforts to gain support for an energy title that would support their development and include mandatory funding in the final version of the next Farm Bill.
 


 

As stakeholders eagerly await the impending official release of the U.S. Environmental Protection Agency's (EPA) proposed 2014 Renewable Fuel Standard (RFS) rule, strong advocacy from all sides continues on the issue in Washington. The Office of Management and Budget (OMB) has been reviewing the proposed rule since August 30, 2013. Recently, a draft of it was leaked (the leaked draft proposal). In the leaked draft proposal, for the first time, EPA would lower the RFS target volumes not only for cellulosic biofuels, but for conventional ethanol and advanced biofuels as well.


On October 23, 2014, biofuels advocates, including representatives from the Biotechnology Industry Organization (BIO), Advanced Ethanol Council (AEC), DuPont, Novozymes, and Abengoa, met with officials from OMB and the White House. Reportedly, they urged the Administration to reconsider the leaked draft proposal. They argued that the oil and gas industry's concerns about the blendwall -- the point at which no additional E10 may be blended into the fuel supply -- are unfounded and result not from the inability to blend greater amounts of ethanol into the fuel supply, but instead from the industry's refusal to do so. On October 29, 2013, BIO and AEC sent a letter signed by over 30 biofuels companies to President Obama again urging the Administration to reconsider the leaked draft proposal and stressing the importance of consistent RFS implementation to promoting investment in biofuels, including next generation biofuels.


This week, AAA and Sportsmen have come out in support of the oil and gas industry's position that EPA should lower the RFS volume requirements for ethanol to no more than 9.7 percent of the U.S. fuel supply. AAA echoes the industry's argument that such reduction is needed due to the E10 blend wall and concern that E15 could damage car engines. The Congressional Sportsmen's Foundation held a briefing this week during which it suggested that the ethanol volume requirements under the RFS have caused hunting and fishing areas to be converted to cropland, and have degraded water quality in the Mississippi River watershed, among other changes.
 


 

Citing concerns over livestock in their states, Senators Dianne Feinstein (D-CA) and Tom Coburn (R-OK) have announced plans to introduce legislation to eliminate the corn ethanol volume requirements under the federal RFS. The bill would leave the advanced biofuels requirements in place. Certain stakeholders in the biofuels industry have already come out against the bill. For instance, it is reported that Renewable Fuels Association President and CEO Bob Dinneen has stressed the importance of maintaining the conventional biofuel volume requirements to the continued development of the advanced biofuels industry. Dinneen argues that the growth of the conventional biofuels industry has built up the infrastructure necessary to support advanced biofuels.

Tags: RFS, biofuels, RFA

 

On October 30, 2013, the U.S. Court of Appeals for the District of Columbia approved the request by Monroe Energy to expedite review of the current RFS litigation challenging EPA's final rule setting the 2013 renewable volume obligations under the federal RFS (the 2013 RFS rule). In October 2013, Monroe, the American Petroleum Institute (API), and the American Fuel and Petrochemical Manufacturers (AFPM) filed individual cases before the court challenging the 2013 RFS rule. These cases have been consolidated.


In response to Monroe's petition for expedited review, the court issued an order encouraging all parties to work together and propose a mutually agreed upon expedited schedule. The parties, including EPA, submitted a proposed expedited briefing schedule on October 24 and the court approved it on October 30. Under the schedule, all briefs will be submitted by the end of February 2014.


Also on October 24, 2013, the National Biodiesel Board (NBB) filed a petition with the court to intervene in the case on behalf of EPA. NBB asserts that its member companies would be harmed if the 2013 RFS rule were to be changed or weakened.
 

Tags: biofuels, RFS, API, AFPM, NBB

 

On October 21, 2013, the U.S. Department of Agriculture (USDA) issued a press release announcing the availability of $181 million in funding under the Biorefinery Assistance Program (BAP) to support the development of commercial-scale biorefineries or the retrofitting of existing biorefineries to produce advanced biofuels from non-food sources. The BAP was created under the Food, Conservation and Energy Act of 2008 (the 2008 Farm Bill) and is administered by USDA Rural Development. It provides loan guarantees to viable commercial-scale facilities to develop new and emerging technologies for advanced biofuels. To date, the program has provided approximately $684 million to support biofuels projects in eight states. USDA's press release is available online.


Applications for funding are due to USDA by January 30, 2014. Additional information on how to apply may be found online.


This announcement comes at a time when the 2008 Farm Bill was allowed to expire on September 30, and a House and Senate conference committee recently initiated work to develop a final Farm Bill that may be voted on by Congress and signed into law by President Obama. Upon the end of the government shutdown last week, President Obama publicly stressed the importance of passing a new Farm Bill this year.
 


 

On October 21, 2013, the U.S. Department of Agriculture (USDA) issued a press release announcing the availability of $181 million in funding under the Biorefinery Assistance Program (BAP) to support the development of commercial-scale biorefineries or the retrofitting of existing biorefineries to produce advanced biofuels from non-food sources. The BAP was created under the Food, Conservation and Energy Act of 2008 (the 2008 Farm Bill) and is administered by USDA Rural Development. It provides loan guarantees to viable commercial-scale facilities to develop new and emerging technologies for advanced biofuels. To date, the program has provided approximately $684 million to support biofuels projects in eight states. USDA's press release is available online.


Applications for funding are due to USDA by January 30, 2014. Additional information on how to apply may be found online.


This announcement comes at a time when the 2008 Farm Bill was allowed to expire on September 30, and a House and Senate conference committee recently initiated work to develop a final Farm Bill that may be voted on by Congress and signed into law by President Obama. Upon the end of the government shutdown last week, President Obama publicly stressed the importance of passing a new Farm Bill this year.
 


 

Biofuels supporters and opponents remain heavily engaged in RFS policy issues. Last week, we reported on a news report that one advanced biofuels trade association, the Advanced Biofuels Association (ABFA), may be working with the American Petroleum Institute (API) on potential legislative language that would provide additional RIN credit for advanced biofuels under the federal RFS program. Since then, ABFA and API have both denied the accuracy of the story. In addition, DuPont announced that it has relinquished its membership in the ABFA and reaffirmed its commitment to advocating that the RFS is working as intended to promote the investment in and development of biofuels and should not be altered in any way through legislation at this point in time.


James C. Greenwood, current President and CEO of the Biotechnology Industry Organization (BIO) and former Member of Congress, sent a letter to the leaders of the House Committee on Energy and Commerce and the Senate Committee on Environment and Public Works asserting that the broad consensus among the biofuels industry, including the advanced biofuels industry, is that now is not the time to legislate on the RFS.


API has continued its opposition to the RFS by announcing that it plans to sue EPA if it fails to issue the final rule setting the 2014 RFS renewable volume obligations (RVO) by November 30, 2013. While the law mandates that EPA issue in final the following year's RVOs by November 30, EPA has consistently missed that deadline. This is the first time API has threatened to sue the Agency if it does not meet the November 30 deadline.
 

Tags: RFS, biofuels, ABFA, API, BIO, RVO

 

Obligated parties and the organizations that represent them continue efforts to challenge and weaken the federal Renewable Fuel Standard (RFS). Several lawsuits have been filed recently in the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit Court) challenging the final rule issued by the U.S. Environmental Protection Agency (EPA) setting the 2013 RFS requirements. Monroe Energy, a subsidiary of Delta Airlines, the American Fuel and Petrochemical Manufacturers (AFPM), and the American Petroleum Institute (API) have each filed challenges to the EPA's final 2013 RFS rule and its renewable and cellulosic volume requirements.


On October 10, 2013, Monroe Energy filed an emergency motion for expedited consideration of its case challenging EPA's final 2013 RFS rule. The company argues that expedited review is necessary given the June 2014 deadline for compliance with the rule that would require Monroe to spend millions on the purchase of Renewable Identification Numbers (RIN).


On Friday, October 11, 2013, API petitioned EPA to reconsider the renewable volume obligations (RVO) set in the final 2013 RFS rule. Under the RFS, EPA is directed to set the following year's RVOs by November 30. EPA did not finalize the 2013 RVOs until August 2013, nine months after the deadline. API argues that EPA improperly used updated Energy Information Administration (EIA) production estimates and that the cellulosic RVO is too high.
 

Tags: RFS, biofuels, RVOs,

 
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