On April 14, 2015, Members of the European Parliament and certain ministers agreed to limit how biofuels derived from agricultural crops would be accounted for in the European Union's (EU) goal to increase the use of renewable energy. The new law caps the use of first generation biofuels to seven percent of the total energy use being counted towards the EU's renewable energy goal of ten percent. Member States will have the opportunity to reduce the cap of crop-based biofuels at their discretion. The law came about in part from fears about food security and negative indirect land use change (ILUC) occurring due to widespread crop-based biofuels. The EU has used ILUC to calculate the net greenhouse gas (GHG) production of biofuels, despite concerns that it is scientifically flawed. The agreement reached will eliminate the ILUC factor as a way to judge the benefits of fuels in the EU, but will still need to be reported by fuel suppliers. The agreement will be voted on during the April 27-30, 2015, plenary session. Member States will have until 2017 to enact the legislation.
During a summit in Brussels on October 23-24, 2014, European Union (EU) leaders agreed to a blueprint to guide climate and energy policy through 2030. The overall goals of the blueprint are to achieve a 40 percent emissions reduction by 2030, relative to 1990 emissions levels, as well as a target of 27 percent for total energy consumption in the EU being provided by renewable sources by 2030. The EU already has a 20 percent emissions reduction target for 2020. The target is expected to help build and maintain momentum for the larger 2030 emissions goal. Individual countries will not be responsible for the 27 percent renewable energy goal, rather, the EU as a whole wants to reach that level of renewable energy. In order to assist countries in achieving this goal, the EU is increasing the current 300 million Emissions Trading System (ETS) allowances to 400 million to help fund low-carbon innovation. More information about the 2030 Climate and Energy Policy Framework can be found in the EU's post-summit communique.
On October 21, 2014, the Biobased and Renewable Products Advocacy Group (BRAG®) submitted petitions to the U.S. Environmental Protection Agency (EPA) requesting that biodiesel fuel manufacturers be granted the same Chemical Data Reporting (CDR) exemptions that petroleum-based diesel manufacturers already receive. BRAG made its petitions through two mechanisms allowed under Toxic Substances Control Act (TSCA) rules. BRAG's petitioning of EPA was reported in the Bloomberg BNA Daily Environment Report story "Biobased Diesel Companies Petition EPA For Rules Comparable To Traditional Diesel."
One petition, "Section 21 Petition for Section 8(a) Partial Exemption in Chemical Data Reporting for Biodiesel Products," was submitted to EPA Administrator Gina McCarthy requesting that EPA initiate a rulemaking to amend the TSCA Section 8 CDR partially exempted chemical list set forth in the EPA regulations at 40 C.F.R. Section 711.6(b)(1), referred to as the (b)(1) List. Specifically, BRAG petitioned EPA to add "biodiesel" as a chemical category for partial exemption for the same reasons as those given for petroleum chemicals already included, which occurred via a rulemaking process based on proposals submitted by the American Petroleum Institute (API). BRAG contends that biodiesel products should be treated similarly to the petroleum products included in the (b)(1) List due to the conditions of manufacture and the properties and uses of the substances.
The second petition, "Petition for Partial Exemption of Biodiesel Products," was submitted to the CDR Coordinator of EPA's Office of Chemical Safety and Pollution Prevention (OCSPP). In it, BRAG petitions to add "biodiesel" as a chemical category in the partially exempted chemical list at 40 C.F.R. Section 711.6(b)(2)(iv), referred to as the (b)(2) List. EPA has stated that CDR processing and use information for chemicals on the (b)(2) List is of "low current interest" and has established a petition process to enable stakeholders to add chemicals to the (b)(2) list.
BRAG believes biodiesel belongs on the (b)(1) List but because there is no formal petition process to amend the (b)(1) List, it decided to proceed with the "low current interest" petition process to amend the (b)(2) List as well.
Amending the CDR partial exemption list to include biodiesels is necessary to ensure equitable regulatory treatment of chemical substances of comparable release and exposure potential, and to avoid EPA providing regulatory relief to one subset of diesel products over another -- even though both meet the decision conditions identified by EPA in its final rulemaking to amend the (b)(1) List, especially in light of EPA's stated objectives and interest in sustainable technologies in general, and ongoing programs that engage biodiesel producers in particular.
Regarding the petitions, BRAG's Executive Director Kathleen M. Roberts stated: "We hope EPA recognizes that these petitions only seek to level the playing field for biodiesel and petroleum-derived diesel manufacturers. Under current regulation, biodiesel producers are required to spend significant amounts of time and money gathering and providing CDR information to EPA while petroleum-derived producers are not, for chemicals that are very similar, serve the same purpose, and are managed in equivalent ways."
In a July 9, 2014, press release, the European Union (EU) announced the launch of seven public-private partnerships, established under the EU's new research funding program Horizon 2020. They represent a total investment of € 19.5 billion into research and innovation over the next seven years, where the EU contribution of € 7.3 billion will unlock a € 12.2 billion investment from the private sector and the Member States. The press release is available online.
These partnerships work in a number of fields crucial for Europe's economic growth, creation of jobs, industrial competitiveness, and well-being of citizens, one of which is a partnership between the EU and the Bio-based Industries Consortium (BIC). The priorities of this new € 3.7 billion public-private partnership, the Bio-based Industries (BBI) program, include doubling of the share of biobased chemicals produced in Europe (from 10 percent to 20 percent); an increase of biomass mobilization by 10 percent as well as a reduction of imports of protein for feed by 15 percent and fertilizer components used for feedstock production by 10 percent; and meeting of the 15 percent target increase in waste and byproduct utilization by 2020.
Máire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science, stated: "The bioeconomy has huge potential that is attracting investments all around the world. With this new partnership, we want to harness innovative technologies to convert Europe's untapped renewable resources and waste into greener everyday products such as food, feed, chemicals, materials and fuels, all sourced and made in Europe."
Peder Holk Nielsen, CEO of Novozymes, stated: "The BBI 2014 Call for Proposals is a first step in a long-term strategy that will deliver tangible social, economic and environmental results. It is the outcome of a year-long effort involving the European Commission and the industry following an extensive consultation of experts and stakeholders. It is a visionary call that lays the foundation for an increasingly ambitious and successful initiative." More details on BIC are available online.
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.
On Wednesday, September 11, 2013, the European Parliament voted 356-327 to cap conventional biofuels at six percent of the European Union's (EU) transportation fuel by 2020 due to food-versus-fuel concerns. It also voted to require that 2.5 percent of EU transportation fuel consist of advanced biofuels by 2020, and to target that fuel to contain a 7.5 percent ethanol blend. The legislation does not require that indirect land use change be taken into account until 2020. The proposal must now be approved by EU Member States.
Despite the August Congressional Recess, much regulatory and legislative action continues in Washington, D.C. on the federal Renewable Fuel Standard (RFS). Earlier this month, the leading trade groups representing the oil and gas industry, the American Petroleum Institute (API) and American Fuel & Petrochemical Manufacturers (AFPM), petitioned EPA to lower the 2014 RFS renewable volume obligations (RVO) to below 10 percent of total U.S. gasoline supply. Under the RFS, EPA is directed to set the following year's RVOs by November 30. API and AFPM argue that waiving the RVOs for 2014 to 9.7 percent of the U.S. gasoline supply is necessary so their members may fulfill their volume obligations under the RFS without exceeding the 10 percent ethanol "blend wall."
The Renewable Fuels Association (RFA), one of the leading biofuels trade associations, has already responded to the API/AFPM waiver petition by sending a letter to EPA urging the Agency to deny the waiver request for several reasons. A copy of the letter is available online. Among other things, RFA argues that API and AFPM lack standing to petition EPA to reduce the 2014 RVOs since the associations themselves are not obligated to comply with the RFS. In addition, RFA argues that there are several ways that obligated parties in the oil and gas industry may meet their 2014 RFS RVOs, including an increase in E15 and E85 sales, and carry over Renewable Identification Numbers (RIN) from 2013.
Earlier this month, Senators Chuck Grassley (R-IA) and Amy Klobuchar (D-MN) sent a letter to the Federal Trade Commission and U.S. Department of Justice requesting that they investigate allegations that certain petroleum companies are deliberately blocking the introduction of higher ethanol blends in violation of antitrust laws. A copy of the letter is available online.
As we have reported, a group of four Republican Members of the U.S. House Energy and Commerce Committee are working during the August recess on developing potential legislative reforms to the federal RFS. It has been reported this week that House Majority Leader Eric Cantor (R-VA) is considering potentially attaching an RFS legislative reform package to a "must-pass" bill similar to the one expected this fall to address the "debt ceiling."
The American Petroleum Institute (API) this week launched its second ad in selected markets against the federal RFS. The ad is being aired in California, Colorado, Illinois, Kentucky, Michigan, Ohio, and Washington, D.C. It comes just after EPA issued its final 2013 RFS rule (more information is available online), and as the House Energy & Commerce Committee leadership is working on potential modifications to the RFS (more information is available online). The ad continues the message of the refining industry that the RFS mandates "unworkable" volumes of renewable fuel in the U.S. fuel supply. The renewable fuel industry continues to argue that the RFS law contains sufficient flexibility to account for changes in the market. The industry points to the final 2013 RFS rule to illustrate this, as EPA significantly lowered the cellulosic volumes to adjust for market realities.
Also this week, API and the American Fuel and Petrochemical Manufacturers (AFPM) jointly petitioned EPA to lower its 2014 total ethanol requirements to 9.7 percent of total gasoline supply in the country. This request follows language in EPA's final 2013 RFS rule suggesting that the Agency is considering lowering renewable fuels obligations to help account for the impending blend wall in its upcoming 2014 rule. API and AFPM argue that lowering the 2014 renewable volume obligations would reduce the cost burden of the RFS to the refining industry.