@EPA is sending the wrong signal for advanced biofuels according to the Biotechnology Innovation Organization (BIO). The #biotech organization has released a new analysis that finds investment patterns clearly demonstrate the EPA is sending a sustained market signal that disincentivizes advanced biofuels, causing a $22.4 billion shortfall in necessary investment.
Figure 2: Annual and Cumulative Number of Second-Generation Biofuel Deals by Type. Data from Bloomberg New Energy Finance; Ocean Park Advisors; United Nations Environment
Programme.
“EPA recognizes that its delays in rulemaking [under the Renewable Fuel Standard/RFS] from 2013 to 2015 undercut investment in advanced biofuels. The agency fails to recognize, however, that its methodology – including in the newly proposed 2017 rule – also undercuts investment in advanced biofuels,” said Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section. “Data on investment in the biofuel sector bears out that EPA’s methodology has forced producers to consolidate investment in conventional biofuel production capacity and distribution infrastructure, while sacrificing investment in advanced.”
Erickson continued, “Following yet another year of policy instability, BIO now estimates that EPA’s rulemaking delays, unwarranted expansion of its waiver authorities, and methodology for setting annual RVOs has caused a $22.4 billion shortfall in investment in advanced biofuels. EPA is sending a sustained market signal that disincentivizes and discourages advanced biofuel producers, who have reached a stage where investment in proven technologies and processes could rapidly expand availability of cleaner, low-carbon transportation fuels.”
He added that this trend can change course if the EPA modifies in 2017 proposed rule to increase renewable fuel volumes and to “obviate competition among biofuel developers”. This action, said Erickson, would ensure the U.S. transportation fuel market is open to every gallon of renewable fuel that can be produced.”