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.

By Lauren M. Graham, Ph.D.

On August 31, 2017, the U.S. Environmental Protection Agency (EPA) announced that requirements for reformulated gasoline and low volatility gasoline would be waived through September 15, 2017, for Alabama, Florida, Georgia, Kentucky, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, Texas, Louisiana, and the District of Columbia.  EPA exercised its emergency fuel waiver authority to help ensure an adequate supply of fuel throughout the South, Southeast, and the Mid-Atlantic in the wake of Hurricane Harvey.  As required by law, EPA and the Department of Energy (DOE) evaluated the impacts of Hurricane Harvey on refineries in the Gulf Coast based on strict criteria provided in the Clean Air Act (CAA) and determined that granting a short-term waiver was consistent with the public interest.  The CAA requires that waivers be limited as much as possible in terms of their geographic scope and duration.  EPA and DOE continue to monitor the fuel supply situation and will act if it is determined that extreme and unusual supply circumstances exist in other areas.


 

By Lauren M. Graham, Ph.D.

On August 15, 2017, the U.S. Court of Appeals for the Tenth Circuit ruled two to one that the U.S. Environmental Protection Agency (EPA) exceeded its statutory authority under the Clean Air Act (CAA) when it denied Sinclair Oil Corporation’s request for a hardship exemption from the Renewable Fuel Standard (RFS) program.  The statute requires that EPA grant exemptions on a case-by-case basis to small refiners that would suffer a “disproportionate economic hardship” in complying with the RFS program.  According to the court ruling, EPA’s interpretation that there needed to be a threat to the refinery’s survival as an ongoing operation to be eligible for the exemption is outside the range of permissible interpretations of the statute and, therefore, inconsistent with Congress’s statutory mandate.  To support its ruling, the court cited the U.S. Department of Energy’s (DOE) matrix analysis that lists three viability metrics that determine hardships, including reduced profitability, temporary negative events, and risk of closure.  As a result of the ruling, EPA will have to reconsider Sinclair’s request for an exemption.
 
Justice Lucero respectfully dissented, stating that the majority decision did not consider EPA’s lengthy discussion, which demonstrates that the Agency considered all of the viability factors.


 

By Lauren M. Graham, Ph.D.

On August 3, 2017, Minnesota Governor Mark Dayton announced that the state will implement a new biodiesel standard in May 2018 that will increase the biodiesel blend mandate from 10 percent (B10) to 20 percent (B20) between April and September each year.  Currently under the state’s biodiesel program, diesel fuel sold in Minnesota must contain at least 10 percent biodiesel during the summer months, with the blend lowering to 5 percent from October to March.  While the new mandate doubles the blend requirement during the summer months, the mandate will revert back to 5 percent over the winter months unless state officials and technical experts determine that accepted federal standards deem certain higher blends as suitable for year-round use in Minnesota.
 
Since a large portion of Minnesota’s biodiesel is made from homegrown soybeans, the new standard is expected to add an average of 63 cents to the market price of a bushel of soybeans for Minnesota farmers, and reduce carbon dioxide emissions by approximately 1 million tons next year.  Minnesota’s biodiesel industry is estimated to contribute more than $1.7 billion annually to the economy, with the state’s three biodiesel plants producing a combined 74 million gallons of biodiesel annually.


 

By Lauren M. Graham, Ph.D.

Renewable Industries Canada (RICanada), a principal stakeholder representing Canadian producers of clean-burning renewable fuels, announced that the Quebec Government’s 2017-2020 Action Plan under the 2030 Energy Policy included, for the first time, renewable fuel volume requirements for fuels such as ethanol and biodiesel.  The renewable fuel blending requirement was set at 5% for gasoline and 2% diesel and is expected to increase after 2020.  RICanada stated that the “announcement on renewable transportation fuels further entrenches Quebec’s position as a leader in the production of renewable energy and in the broader battle against climate change” and that its “members look forward to helping the Government of Quebec ensure that the province’s GHG targets in the transportation sector are achieved.”  More information on the Action Plan for Energy Policy 2030 is available on the Minister of Energy and Natural Resources website.


 

 

By Lauren M. Graham, Ph.D.

On April 4, 2017, the Iowa Biodiesel Board (IBB) announced that the Iowa Department of Revenue’s 2016 Retailers Fuel Gallons Annual Report demonstrated that more than half of Iowa’s fuel retailers carried biodiesel blends in 2016.  In 2016, 344.8 million gallons of on-road biodiesel blends were sold, which accounts for 54.7 percent of total on-road diesel fuel sales.  The report also showed that twice as many gallons of 11 - 20 percent biodiesel (B11-B20) were sold compared to lower blends.  IBB credits the growth in the use of higher biodiesel blends to Iowa’s proactive state policies, which are working as intended to increase production and consumption.  Due to the instability at the federal level, Grant Kimberley, the IBB executive director, stated that Iowa’s biofuel producers need state tax credits to stay in place now more than ever to remain competitive.


 

On November 23, 2016, EPA Administrator, Gina McCarthy, signed the final rule on the RFS volume standards for 2017 and biobased diesel standards for 2018. This final rule will increase the renewable fuel volume requirements as reported in the Biobased and Renewable Products Advocacy Group (BRAG®) post “EPA Releases Proposed Renewable Fuel Volume Requirements.”  The proposed volume requirements are:  


 
Cellulosic biofuel, from 230 million gallons in 2016 to 311 million gallons in 2017;  
 

 
Advanced biofuel, from 3.61 billion gallons in 2016 to 4.28 billion gallons in 2017;
 

 
Renewable fuel, from 18.11 billion gallons in 2016 to 19.28 billion gallons in 2017; and
 
Biomass-based diesel, from 2 billion gallons in 2017 to 2.1 billion gallons in 2018.
 
These volumes change the percentage standards to 0.173 percent for cellulosic biofuel, 2.38 percent for advanced biofuel, 10.70 percent for renewable fuel, and 1.67 percent for biomass-based diesel.  The final rule is expected to be published in the Federal Register during December 2016.

 

 
Inside Sources, “Data Dispel the Myth of The Blend Wall
 

 
My Sunshine Coast, “Queensland Government Goes Global for Bio Opportunities
 

 
The Philadelphia Inquirer, “New $170M Delaware River Chemical Plant
 
ars technica, “Turning Plants into Better Fat Factories

 

On September 21, 2016, Pannonia Ethanol, a Hungarian biofuels company, spoke out against the European Commission's (EC) Low-Emission Mobility Strategy . The strategy recognizes the importance of biofuels in reducing road emissions, and plans on replacing ethanol that is currently being blended into traditional fuels with advanced biofuels. This has spurred concerns for the ethanol industry, as ethanol is increasingly phased out of government emission reduction initiatives in favor of advanced biofuels. Mark Turley, CEO of Ethanol Europe, said of the new strategy, "Incentives and policy support are essential to develop [a European Union] advanced biofuel industry. However, the Commission's new strategy lacks realism, further undermines confidence and is incapable of delivering the emission reduction targets set out."


 

On June 24, 2016, Missouri Governor Jay Nixon signed Senate Bill 657 modifying provisions related to motor vehicles. Under this new law, liability insurance carried by gas stations will expand coverage to include the release of blended fuels from incompatible storage tanks. The inclusion of blended fuels under the required insurance policy will remove one more barrier towards increasing the number of blender pumps within the state. The bill was originally introduced on January 6, 2016, and will become effective on August 28, 2016.


 
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