By Kathleen M. Roberts
On April 4, 2017, the Hawaii State Senate Committee on Ways and Means passed HB 1580, which sets a goal of having all ground transportation in Hawaii run on renewable fuel by 2045. The bill, which does not contain an enforcement mechanism, provides a benchmark framework for achieving the ambitious target and establishes an intermediate target to reduce the sale of imported fuels by five percent in 2025. The Senate Committee introduced amendments that clarify the bill does not create a mandate to move to 100 percent clean ground transportation, but it outlines a path to achieve such a goal. According to the bill, clean ground transportation includes all transportation that avoids the consumption of fossil fuels.
On November 29, 2016, the United Kingdom (UK) Department of Transportation published proposed legislative changes to the Renewable Transport Fuel Obligation (RTFO), which is open for consultation until January 22, 2017. Among the proposed changes is an increase in the blending mandates to 9.75 percent by volume for 2020. The three main proposals outlined detail increasing the supply of waste derived fuels, encouraging the production of advanced renewable fuels, and setting a maximum cap for fuels from food crops. The aim of the consultation is to determine whether further measures could be taken to minimize costs.
The RTFO was established to achieve the targets for renewable energy usage in the transportation sector set by the European Union by incentivizing fuel suppliers to provide biofuels at the lowest cost possible. The objective is to encourage investment in renewable fuels so that the relative cost of biofuels decreases over time.
On May 24, 2016, Iowan Governor Terry Branstad signed Senate File 2309, an Act providing for tax credits and refunds relating to renewable fuels including their component biofuels and including effective date provisions. The bill extends a state biodiesel production tax credit providing 2 cents per gallon (cpg) on the first 25 million gallons of production per biodiesel plant. The bill also extends a credit for petroleum retailers of 4.5 cpg on blends of 5 percent biodiesel or more through the end of 2017, with the incentive changing to 3.5 cpg for 5-11 percent biodiesel blends and 5.5 cpg for biodiesel blends above 11 percent from 2018 to 2024. Without the extension, the bill was scheduled to sunset on December 31, 2017, but will now continue through December 31, 2024.
On February 16, 2016, Agriculture Secretary Tom Vilsack responded to two recent reports on ethanol and renewable fuels. The first report was published by USDA and is on "2015 Energy Balance for the Corn-Ethanol Industry," and the second report comes from the University of Missouri Food and Agricultural Policy Research Institute (FAPRI) and is a "Literature Review of Estimated Market Effects of U.S. Corn Starch Ethanol." Both studies demonstrate the growth of the United States' renewable energy industry with improved ethanol and biodiesel production resulting in doubled renewable energy production and a reduction in foreign oil imports. The energy used to produce corn has fallen as well, which has made the production of ethanol more efficient so that "more energy is being produced from ethanol than is used to produce it, by factors of 2 to 1 nationally and by factors of 4 to 1 in the Midwest." Both studies point towards a solid future of growth and innovation for the U.S. renewable energy industry.
On June 4, 2015, EPA published a notice in the Federal Register for a Public Hearing on the 2014, 2015, and 2016 Standards for the Renewable Fuel Standard (RFS) program. As part of the hearing, EPA will consider amendments to the annual percentage standards for cellulosic biofuel, biodiesel, and advanced biofuels that are added to fuel produced in the U.S. or imported for 2014, 2015, and 2016, and will consider amendments to the proposed biodiesel volume for 2017. The hearing will be held on June 25, 2015, at 9:00 a.m., at the Jack Reardon Center, 520 Minnesota Avenue, Kansas City, Kansas 66101.
On Wednesday, December 10, 2014, the House Committee on Oversight
and Government Reform's Subcommittee on Energy Policy, Health Care and
Entitlements held a hearing on "Examining EPA's Management of the
Renewable Fuel Standard Program." The sole witness was Janet McCabe,
Acting Administrator for Air and Radiation at the U.S. Environmental Protection
Agency (EPA). A copy of Ms. McCabe's written testimony is available online.
Subcommittee Members on both sides of the aisle sharply criticized
EPA on its recent announcement that it is delaying issuing a final 2014
Renewable Fuel Standard (RFS) rule until sometime in 2015. The rule was due to
be issued by statute by November 30, 2013. EPA renewed its strong support for
the RFS, and explained how it sought public comment on alternative approaches
to setting the volume requirements. Comments received have been extensive and
divergent, especially in light of drastically reduced gasoline prices and lower
consumption, whether and on what basis statutory volumes for renewable fuels
should be lowered, and concerns about the ability of the proposed approach to
provide progress toward achieving continued progress towards achieving the
volumes of renewable fuel targeted by law. EPA intends to take action on the
RFSs for 2014-2016 to provide much needed certainty to investors and others.
Republican and Democrat Subcommittee Members suggested that EPA's actions on
issuing the final rule contributed to instability in the biofuels market, and
may be cause for Congressional action to repeal the law, an outcome vehemently
opposed by most in the biofuels industry.
On September 24, 2014, Southwest Airlines (Southwest) signed an agreement with Red Rocks Biofuels LLC (RRB) to purchase renewable jet fuel to use in their Bay Area Operations. The agreement "covers the purchase of approximately three million gallons [of low carbon renewable jet fuel] per year." The biofuel produced by RRB is produced using woody biomass feedstock and the first delivery to Southwest is expected to occur in 2016. More information is available online.
On August 20, 2014, DOE's National Renewable Energy Laboratory (NREL) announced a new NREL study demonstrating a potentially more economical way to use lignin to make renewable fuels and products. NREL states in the study that "[o]verall, this work demonstrates that the use of aromatic catabolic pathways enables an approach to valorize lignin by overcoming its inherent heterogeneity to produce fuels, chemicals, and materials."
A copy of the announcement is available online. A copy of the full study is available online.
On August 12, 2014, Virent announced that it has received fuel registration from EPA for its BioForm® gasoline in blends up to 45 percent. According to the company's press release, this registration means that the BioForm® gasoline may now be used in on-highway motor vehicles. The EPA testing work for the registration was funded by Virent's partner Royal Dutch Shell.
Virent's CEO Lee Edwards remarked in the company's press release on the announcement that "[s]ecuring EPA registration of our BioForm® Gasoline is further confirmation of Virent's high quality drop-in fuel and is another step towards commercializing our technology to produce renewable fuels and chemicals from biobased feedstocks."
A copy of Virent's press release is available online.
On June 26, 2014, the Congressional Budget Office (CBO) issued a 38-page report on the federal Renewable Fuel Standard (RFS), "The Renewable Fuel Standard: Issues for 2014 and Beyond." The report examines potential compliance with the RFS through 2017 under three scenarios and evaluates the effects on food and fuel prices under each one. A copy of CBO's summary of the report is available online. A copy of the full report is available online.
The report evaluated the impact on food and fuel prices under the following three RFS scenarios through 2017: compliance with the RFS requirements for advanced, biodiesel, and corn ethanol (not cellulosic); compliance with the RFS volume requirements consistent with EPA's proposed 2014 RFS requirements; and repeal of the RFS requirements. While CBO found that food prices would be similar whether the RFS is continued or repealed, it found varying potential effects on fuel prices. For instance, CBO concluded that continuing RFS statutory requirements through 2017 would lead to increased price of all types of transportation fuels, except E85.
Advocates on both sides of the RFS debate are already using the report. Some opponents have already argued that the report's findings further support reforming or repealing the RFS. Some RFS supporters have dismissed the report's conclusions as contrary to those of other respected economists who have studied the RFS and come to different conclusions. The report comes as RFS stakeholders are eagerly awaiting EPA's release of its final 2014 RFS rule.