By Lynn L. Bergeson
On May 8, 2018, President Trump met with a group of Republican Senators and told them that he is considering allowing exported ethanol to count toward the volumes mandated by the Renewable Fuel Standard (RFS). During this meeting, Mr. Trump also reiterated support for expanding sales of E15, and withdrew his verbal proposal to cap the price of RINs, which had been widely criticized by the ethanol industry. These announcements came after increasing concern about the future stability of the RFS after the U.S. Environmental Protection Agency (EPA) recently granted over two dozen hardship waivers to small refineries for 2017, a drastic increase from EPA’s prior practice of granting between six to eight hardship waivers annually.
The ethanol industry reacted favorably to some of these proposals, with the Biotechnology Innovation Organization (BIO), a member of the Biobased and Renewable Products Advocacy Group (BRAG®), releasing a statement thanking President Trump for rejecting the RIN cap and for his support of year round sales of E15. Brent Erickson, Executive Vice President of BIO’s Industrial & Environmental Section, stated: “Ensuring that E15 can be sold year round in states and regions where it is already approved will give advanced and cellulosic ethanol more opportunity to compete in the market in coming years. E15 reduces the price of gasoline by 5 to 15 cents per gallon, and it lowers tailpipe and greenhouse gas emissions all year round. . . . BIO and its members continue to oppose unnecessary changes to the Renewable Fuel Standard. EPA has already provided unwarranted waivers to oil refiners that are destroying demand for all biofuels and undercutting industry investments. We thank Senators Grassley and Ernst for standing with us in opposition to the damaging proposal for a cap on RIN prices.” Mr. Trump’s proposal to allow RINs from exported ethanol to count towards mandated volumes under the RFS was greeted with more caution, with Erickson stating: “We remain concerned about the impact counting RINs from exported renewable fuels would have on the development of advanced biofuels and we look forward to working with the Senators to ensure the RFS continues to promote production and use of homegrown biofuels.” Kevin Skunes, President of the National Corn Growers Association, was also distrustful of this proposal, stating: “Offering RIN credits, which are supposed to be derived from a domestic renewable fuel use, for ethanol exports would threaten trade markets and impact corn farmers’ economic livelihoods.”
By Lynn L. Bergeson
The U.S. Department of Energy’s (DOE) Bioenergy Technologies Office has announced that the International Energy Agency (IEA) Bioenergy Technology Collaboration Programme (TCP) will present a webinar titled “Biofuels for the Marine Sector: New Opportunities and New Challenges” on May 8, 2018, from 10:00 a.m. to 11:00 a.m. (EDT) that will “give an overview of the maritime transportation sector, including its fuel and engine types, the fuel supply infrastructure, and the regulations on fuel specifications and [carbon dioxide (CO2)] emissions” and include discussion on the feasibility of current biofuels including their properties and supply. Participation instructions are available online.
By Lauren M. Graham, Ph.D.
On December 4, 2017, Bio-on, a leading Italian biotechnology company in the bioplastic sector, announced the continuation of its collaborative agreement with AkzoNobel, a member of BRAG. Following the close of a successful collaboration on the 2014 Synergistic Fouling Control Technologies-SEAFRONT project, International Paint Ltd., a business unit of AkzoNobel, and Bio-on have agreed to investigate the use of Bio-on’s biodegradable and biobased polymers in fouling control coatings developed by AkzoNobel. The coatings are designed to prevent the accumulation of marine organisms on boats, ships, tidal power plants, and other aquatic installations. According to David Williams, Research and Devolopment Director, Marine Coatings at AkzoNobel, the “collaboration is strategically attractive to AkzoNobel as it offers the potential to develop new biobased products which will strengthen our position as world leaders in high performance and sustainable coatings.”
By Lauren M. Graham, Ph.D.
On September 19, 2017, the U.S. Department of Energy (DOE) announced 18 projects from the Macroalgae Research Inspiring Novel Energy Resources (MARINER) program will receive $22 million in funding through the Advanced Research Projects Agency-Energy (ARPA-E). The MARINER projects aim to develop tools to address the technological challenges to growing and harvesting macroalgae efficiently and cost-effectively for use as a feedstock for biofuels and other bioproducts. Such tools would support the goal of the United States becoming a leader in the production of macroalgae to improve U.S. energy security and economic competitiveness. According to Eric Rohlfing, the ARPA-E Acting Director, “the United States has offshore resources capable of producing enough seaweed to handle as much as 10 percent of our demand for transportation fuel.”
The cross-disciplinary MARINER projects focus on transformative, systems-level improvements and engineering, including advanced research in farm design and autonomous operation, which draw on fields such as cultivation and harvesting systems, advanced components, computer modeling, aquatic monitoring, and advanced breeding and genetics tools.
The full list of the MARINER projects is available on the ARPA-E website.
By Kathleen M. Roberts
The U.S. Environmental Protection Agency (EPA) will hold a public hearing on the Renewable Fuel Standard [RFS] Program: Standards for 2018 and Biomass-Based Diesel Volume for 2019 proposed rule. The hearing will take place at 9:00 a.m. on August 1, 2017, and will provide an opportunity for EPA to gather data, views, and arguments on the proposed rulemaking from interested stakeholders. While EPA does not plan to respond to presentations, the Agency may ask clarifying questions. EPA intends to use the information to inform a future rulemaking to reset the statutory volumes for cellulosic, advanced, and total biofuels pursuant to the Clean Air Act. In resetting the mandatory biofuel production requirements under the RFS program, EPA will need to review the implementation of the program during previous years and coordinate with the Secretary of Energy and the Secretary of Agriculture. Factors that EPA must consider in its analysis include:
- The impact of renewable fuels on the environment;
- The impact of the fuels on energy security;
- Production rates of fuels;
- Economic impacts of fuels; and
- The impact of renewable fuel on U.S. infrastructure.
By Lauren M. Graham, Ph.D.
On May 10, 2017, the U.S. Environmental Protection Agency (EPA) released Renewable Identification Numbers (RIN) generation data for April 2017, reporting that nearly 1.5 billion RINs were generated during the month.
Nearly 17.3 million D3 cellulosic biofuel RINs were generated in April, bringing the total for 2017 to 49.9 million, including 1.3 million D3 RINs generated for ethanol, 17.9 million generated for renewable liquefied natural gas, and 30.7 million generated for renewable compressed natural gas. Of the 49.9 million RINs, 44.7 million were generated by domestic producers, and 5.2 million were generated by importers.
More than 279.6 million D4 biomass-based diesel RINs were generated in April, resulting in a total of 973.3 million for 2017. The majority of RINs, 736.5 million, were generated for biodiesel, with 235.9 million for non-ester renewable diesel, and 937,219 for renewable jet fuel. Nearly 694.9 million RINs were generated by domestic producers, with 168.5 million generated by importers and nearly 109.9 million generated by foreign entities.
For D5 advanced biofuel, 7.0 million RINs were generated in April, which brought the total for 2017 to nearly 22.7 million. Naphtha accounted for the majority of RINs generated, 10.9 million, with 8.1 million generated for ethanol, 890,603 generated for heating oil, and 2.7 million generated for non-ester renewable diesel. In 2017, all D5 advanced biofuel RINs were generated by domestic producers.
Nearly 1.2 billion RINs were generated for D6 renewable fuel in April, resulting in a total of nearly 4.9 billion for 2017. The majority of RINs were generated for ethanol, nearly 4.8 billion, with nearly 84.8 million generated for non-ester renewable diesel. Nearly 4.8 billion RINs were generated by domestic producers, with 3.8 million generated by importers and nearly 84.8 million generated by foreign entities.
The data indicates that no D7 cellulosic RINs have been generated in 2017.
By Kathleen M. Roberts
On May 9, 2017, Senator Elizabeth Warren (D-MA), along with seven additional Democratic Senators, sent a letter to the Securities and Exchange Commission (SEC), the U.S. Environmental Protection Agency (EPA), and the Commodities Futures Trading Commission (CFTC) requesting an investigation into the activities of Carl Icahn for potential insider trading, market manipulation, and other securities and commodities law violations in the renewable fuel credit market. The letter states that the actions of and the massive profit earned by Icahn raise questions related to conflict-of-interest rules that apply to government officials, and questions regarding insider trading and market manipulation of renewable fuel credits, known as Renewable Identification Numbers (RIN) -- which SEC, EPA, and CFTC have jurisdiction over. EPA oversees the issuance and trading of RINs. CFTC works with EPA to ensure integrity in the RIN market since it has broad authority to prevent insider trading and other market manipulation in commodities markets and futures markets. SEC has jurisdiction to investigate whether Icahn’s actions as a senior adviser to President Trump affected CVR Energy's stock value or the accuracy of the company's annual and quarterly financial reporting and disclosure.
The Senators maintained that RIN insider trading and market manipulation hurts all parties, including biofuel producers and refineries, and requested an investigation by the three agencies based on the publically available information detailed in the letter. The Senators also requested information on whether EPA Administrator Scott Pruitt and SEC Chairman Jay Clayton would recuse themselves from the investigation.
On March 19, 2017, the International Organization for Standardization (ISO) published the sixth edition of its specifications for marine fuels (ISO 8217:2017), which includes a redefined “class F” grade for biofuel blends in marine distillates. Up to seven percent fatty acid methyl ester (FAME), which has similar physical properties to conventional diesel, is permitted in the new “F” grades, specifically DFA, DFZ, and DFB. Additionally, the DMA specifications have been amended to permit 0.4 higher weight percent biodiesel, compared to the suggested level in the previous iteration of the standard. Substantial amendments were also made to the scope and other general requirements. The full specifications are available for purchase on the ISO website.
EPA released RIN generation data for December 2016, reporting that more than 1.8 billion RINs were generated during the month. More than 16.8 million D3 cellulosic biofuel RINs were generated in December, bringing the total for 2016 to 178 million, including 3.8 million D3 RINs for ethanol, 66.8 million for renewable liquefied natural gas, and 107.5 million for renewable compressed natural gas. Of the 178 million RINs, nearly 160 million were generated by domestic producers, and nearly 19.2 million were generated by importers.
More than 524 million D4 biomass-based diesel RINs were generated in December, resulting in a total of nearly 4.0 billion for 2016. The majority of RINs (3.28 billion) were generated for biodiesel, with 715 million for non-ester renewable diesel. More than 2.85 billion RINs were generated by domestic producers, with 830 million generated by importers.
For D5 advanced biofuel, 6.0 million RINs were generated in December, which brought the total for 2016 to 97 million. Ethanol accounted for the majority of RINs generated, nearly 61.3 million, with nearly 26.3 million generated for naptha, 1.54 million generated for heating oil, and 7.93 million generated for non-ester renewable diesel. Of the 97 million RINs, 62.6 million were generated by domestic producers, 34.4 million were generated by importers, and 312 million were generated by foreign entities.
Nearly 1.30 billion RINs were generated for D6 renewable fuel in December, resulting in a total of nearly 15.2 billion for 2016. The majority of RINs (14.7 billion) were generated for ethanol, with 169 million generated for biodiesel, and 281 million generated for non-ester renewable diesel. More than 14.7 billion RINs were generated by domestic producers, with 179 million generated by importers, and 281 generated by foreign entities.
The data indicates that no D7 cellulosic RINs were generated in December. In 2017, a total of 534,429 cellulosic RINs were generated for cellulosic heating oil. All of the D7 RINs were generated by importers.
On January 4, 2017, EPA issued a notice of intent to revoke Genscape’s ability to verify Renewable Identification Numbers (RIN) as a third party auditor under the Renewable Fuel Standard (RFS) Quality Assurance Program (QAP). According to the notice, Genscape failed to meet all elements of its Quality Assurance Plan and verified approximately 68 million fraudulently-generated RINs. To replace invalid RINs, Genscape is required to retire RINs within 60 days. Obligated parties, however, do not have to replace invalid RINs to meet their compliance obligations if they assert and meet the requirements of an affirmative defense pursuant to 40 C.F.R. § 80.1473. Genscape has 60 days to submit comments on the notice, which EPA will consider when taking final action on the proposed revocation. Unless EPA issues a final action to revoke its registration, Genscape may continue to function as a QAP provider.