On December 28, 2016, the American Fuel & Petrochemical Manufacturers (AFPM) submitted a petition requesting that EPA waive the cellulosic biofuel volumetric requirements for the 2016 compliance year citing an inadequate domestic supply of the fuel. Based on the amount of cellulosic fuel produced through November, AFPM estimated that between 173.8 and 190 million gallons will be produced in 2016, which is approximately 40 to 60 million gallons below the 230 million gallon target set by EPA in December 2015. With a cellulosic waiver credit price of $1.33 for 2016, obligated parties would be required pay approximately $50 to $75 million to meet the cellulosic biofuel mandate. The petition requests that a partial supplemental cellulosic biofuel waiver equal to the shortfall be granted to prevent am unjust penalty on obligated parties. Since RFS compliance must be confirmed by March 30, 2017, the petition also urges EPA to defer the 2016 cellulosic biofuel waiver credit requirement until EPA can formally act on the petition.
On March 25, 2015, EPA announced the direct final rule, Regulation
of Fuels and Fuel Additives: Cellulosic Waiver Credit Price and Minor
Amendments to Renewable Fuel Standard Regulations, that would
result in cellulosic waiver credit prices being posted on the EPA website
rather than as a result of the rulemaking process. This would allow the credit
prices to be announced as soon as the needed data for the wholesale price of
gasoline is available, which would provide more certainty to the market. The
credit prices are supposed to be updated annually according to the Clean Air
Act (CAA) but delays in RFS have also delayed updating the credit prices. EPA
announced that the price of the waivers will be $0.49 per credit for the 2014
compliance period and $0.64 per credit for the 2015 compliance period. This
direct final rule also corrects an error created by an earlier rule where EPA
moved standards for process heat produced from biogas and accidentally
overwrote standards for giant reed and napier grass. This final rule will take
effect 30 days after it is published in the Federal Register unless it
receives any adverse comments.
EPA is accepting public comments through May 26, 2015, on two
proposed information collection requests (ICR) published in the Federal
Register on Tuesday, March 24, 2015. The proposed ICRs concern projected
cellulosic biofuels volumes and gasoline containing greater than 10 volume
percent ethanol up to 15 volume percent ethanol (E15). Comments received will
assist EPA as the agency prepares to submit the final ICRs to the Office of
Management and Budget (OMB) for its official approval and dissemination.
In the first proposed ICR on "Cellulosic
Production Volume Projections and Efficient Producer Reporting,"
EPA is seeking to collect information from potential cellulosic biofuel
producers to aid in determining the annual volume standards. In the second
proposed ICR on "Recordkeeping
and Reporting Related to E15 (Renewal)," EPA is seeking
comment on recordkeeping and reporting items related to the legal use of E15 in
The Bioenergy Technologies Office within the U.S. Department of Energy (DOE) has issued a Funding Opportunity Announcement (FOA), "Landscape Design for Sustainable Bioenergy Systems."
DOE is looking for interdisciplinary projects that integrate landscape design approaches with cellulosic feedstock production within existing agricultural and forestry systems. Projects must maintain, or preferably enhance, environmental and socio-economic sustainability. The FOA includes funding up to $14 million.
This funding will help take the next steps for previous DOE-funded projects that demonstrated potential for increased sustainability through strategic placement of bioenergy feedstock production within a landscape. The FOA will engage landowners and multi-disciplinary stakeholders in the design of the landscape, field research on sustainability metrics, and assessing logistic systems needed to provide high quality cellulosic feedstocks to conversion facilities for bioenergy.
More information on the FOA is available on DOE's website.
On October 17, 2014, Abengoa opened -- and DOE Secretary Ernest Moniz dedicated -- the world's largest cellulosic biorefinery in Hugoton, Kansas. This second generation cellulosic ethanol plant will process 1,000 tons of biomass per day and utilize mainly corn stover, as well as wheat straw, milo stubble, and switch grass. This biorefinery will produce up to 25 million gallons of cellulosic ethanol every year. It benefited from a $132.4 million loan guarantee and a $97 million grant, both from DOE. More information about the plant and comments from the opening ceremony are available in a DOE press release, "Secretary Moniz Dedicates Innovative Commercial-Scale Cellulosic Biofuel Plant" and on the Biofuels Digest website.
On October 6, 2014, DuPont and Proctor & Gamble announced their joint plan to replace currently used corn-based ethanol with cellulosic ethanol in North American Tide® laundry detergent. According to DuPont's press release on the announcement, the cellulosic ethanol used in the detergent will come from DuPont's new biorefinery being constructed in Nevada, Iowa. A copy of the press release, with more information on the announcement, is available online.
On September 3, 2014, POET-DSM's Project LIBERTY in Emmetsburg, Iowa, celebrated its grand opening. This will be the first commercial-scale cellulosic ethanol plant to use corn waste as a feedstock, using biochemical conversion technologies (yeast and enzymes) to convert cellulosic biomass into transportation fuels. Project LIBERTY is the second of two DOE-funded cellulosic ethanol biorefineries to come on line within the past year. More information is available on the DOE Bioenergy Technologies Office (BETO) website. A documentary on the production of cellulosic ethanol at POET-DSM can be viewed online.
In an August 11, 2014, filing with the U.S. Securities and Exchange Commission, cellulosic biofuel company KiOR, Inc. (KiOR) reported that without any new financial commitments, the Company only has enough funding to operate through September 2014. This announcement is significant for the biofuels industry, as EPA had relied on KiOR's projected volumes of available cellulosic biofuels to make up a significant part of the 2013 cellulosic renewable volume obligations (RVO) under the federal RFS. In addition, biofuels and RFS supporters have cited KiOR as a success story for continued support for the advanced and cellulosic RVOs under the RFS.
On May 2, 2013, EPA published a proposed rule and a direct final rule that would amend its 2013 cellulosic requirement published on August 15, 2013. The rules are available here and here.
Through these actions, EPA is proposing a revised and reduced cellulosic standard for 2013 of 810,185 gallons. As EPA explains, the direct final rule will be "effective on July 1, 2014 without further notice, unless EPA receives relevant adverse comment by June 2, 2014. If EPA receives relevant adverse comment, [it] will publish a timely withdrawal of this direct final rule in the Federal Register informing the public that this rule will not take effect."
EPA also explains that the proposed rule and direct final rule follow from EPA having granted petitions for reconsideration of the 2013 cellulosic biofuel standard by API and AFPM. Further, EPA explains that it granted the petitions because KiOR, which was "one of the two companies that EPA expected to produce cellulosic biofuel in 2013 announced soon after EPA signed its final rule that it intended to produce substantially lower volumes of cellulosic biofuel in 2013 than it had earlier reported to EPA. Since the cellulosic biofuel standard was based on EPA's projection of cellulosic biofuel production in 2013, EPA deemed this new information to be of central relevance to the rule, warranting reconsideration. On reconsideration, EPA is directed to base the standard on the lower of 'projected' production of cellulosic fuel in 2013 or the cellulosic biofuel applicable volume set forth in the statute. Since data are available to show actual production volumes for 2013, EPA's 'projection' and final rule are based on actual cellulosic biofuel production in 2013."