The biofuels industry received an early holiday present yesterday when the House of Representatives voted to restore $2 billion to the alternative loan guarantee program that was borrowed to fund the Cash for Clunkers program.
However the Renewable Fuels Association (RFA), while pleased to see the funds returned, noted that this is just one step among many that are needed to support the industry. “This is an important step and one the Senate should replicate as soon as possible,” said RFA President Bob Dinneen. “Restoring these funds is just the first step. Making sure the shovel-ready advanced biofuel projects can gain access to these loan guarantees is vital for them to begin construction and production commercial volumes of next generation renewable fuels.”
RFA is concerned that the funds will not be used to further the energy, economic and environmental goals of the United States. During COP15, Obama is expected to announce the country’s goal of reducing greenhouse gas emissions 17 percent. Specifically, the RFA noted in a letter to the Department of Energy in October that the loan guarantee program was being crafted in a manner making it extraordinarily and unnecessarily difficult for advanced biofuel companies to secure the guarantees.
In a letter Dinneen wrote earlier this year he stated, “A fundamental flaw of the loan guarantee program is that DOE is weighing the applications of emerging technology projects such as cellulosic ethanol using the same criteria as mature technology projects, and against more mature technologies, such as wind and solar, that have been commercialized in other countries. The challenges facing next generation advanced biofuels are simply much different than those of the renewable power sector.”
Dinneen stresses the importance of focusing support on already proven technologies and those advanced biofuels technologies that are close to the finish line in lieu of not-yet proven and may never make it to market technologies.
“Under the worst case scenarios of the U.S. Environmental Protection Agency, ethanol production today is meeting the GHG reduction goal the President will announce to much fanfare. Providing security to advanced biofuel companies in this tumultuous investment climate through loan guarantees ensures that America’s biofuels industry can continue to do its part and more in the battle against climate change. Allowing these technologies to wither on the vine is not an option,” concluded Dinneen.