Payments Made to Renewable Feedstocks Producers

Joanna Schroeder

Nearly $19.4 million in payments to 125 advanced biofuel producers growing non-food feedstocks for use in development for biofuels has been made by the UDSA. The funding is provided through USDA’s Bioenergy Program for Advanced Biofuels that was established in the 2008 Farm Bill. The goal of the program is to support the research, investment and infrastructure needed to build a diverse American-based biofuels industry.

“Advanced biofuels are a key component of President Obama’s ‘all-of-the-above’ energy strategy to reduce the Nation’s reliance on foreign oil and take control of America’s energy future,” said Agriculture Secretary Tom Vilsack. “These payments represent help to spur an alternative fuels industry using renewable feedstocks grown in America, broadening the range of feedstock options available to biofuels producers, helping to create an economy built to last.”

Dozens of different feedstocks can qualify for the program but no corn-based feedstocks are allowed. For example, crop residue, animal, food and yard waste material, vegetable oil, and animal fat are some of the feedstocks that producers are cultivating and biofuels producers are developing.

Representatives of the USDA say that increased biofuel production only plays a minor role in retail food price changes. Feedstock diversity leads to market flexibility and relieves market pressure.

Click here for a list of the advanced feedstock producers that received payments.

advance biofuels, Agribusiness, feedstocks

Obama Officials Voice Support for RFS

Joanna Schroeder

The Obama administration has vocalized its continued support for the Renewable Fuels Standard (RFS) by rebuffing “alarmist calls” for its end. Last week, Renewable Fuels President (RFA) and CEO Bob Dinneen wrote a letter to U.S. Agriculture Secretary Tom Vilsack and Environmental Protection Agency (EPA) Administrator Lisa Jackson thanking them for acting responsibly in the wake of calls to modify or dismantle the RFS. Dinneen has been on record multiple times saying changes to the RFS are “simply not warranted.”

Dinneen wrote, “Your comments have provided the kind of certainty and security that is necessary to ensure the renewable fuels industry continues to evolve. Further, your agencies’ recent remarks regarding the RFS serve as important signals to the investment community that the nation’s commitment to diversifying our fuel supply and creating a future market for new advanced biofuel technologies remains intact,” Dinneen wrote.

Opposers of RFS have gained some momentum of late using the record breaking drought conditions as an example of why the RFS will not work. However, Dinneen says the RFS has “tremendous flexibility built into the RFS program” by way of Renewable Identification Numbers (RINs) that allow obligated parties to “bank” credits.

According to research released last week by Iowa State University professor Bruce Babcock, there are an estimated 2.4-2.6 billion RINS available and a reduction in the RFS might only serve to lower corn prices by 4.6 percent. In addition when corn prices began to rise, says Dinneen, ethanol consumption of corn fell nearly 14 percent, a two-year low, while exports increased nearly 15 percent.

Dinneen concludes that waiving RFS mandates will not serve its intended purpose and market signals along with the flexibility of the RFS are working.

biofuels, Ethanol, RFA

Ethanol Production Declines

Joanna Schroeder

New data has been released from the Energy Information Administration (EIA) regarding ethanol production data that averaged 796,000 barrels per day (d/d) or 33.43 million gallons daily. This is down 6,000 b/d from the previous week. The four week average ethanol production is 819,000 b/d for an annualized rate of 12.55 billion gallons.

Gasoline demand for last week averaged 363.7 million gallons per day while ethanol stocks remained at 19 million barrels. Ethanol production represented 9.19 percent of daily gasoline demand. Year-to-date U.S. ethanol export data implies annualized export demand of approximately 900 million gallons.

Ethanol producers used 12.069 million bushels of corn to produce ethanol and 88,836 metric tons of livestock feed of which 79,198 metric tons were distillers grains. The rest is comprised of corn gluten feed and corn gluten meal. In addition, ethanol producers were providing 4.15 million pounds of corn oil daily.

corn, Distillers Grains, Ethanol

Biodiesel, RINs and RFS2

Joanna Schroeder

The Environmental Protection Agency (EPA) is looking into the fraudulent sale of Renewable Identification Numbers (RINs). These are generated when a gallon of biofuel is produced and most often “sold” with the gallon of biofuel. But is some cases RINs can be sold and bought without the biofuel attached.

What’s the big deal? RINs are used by the EPA to track compliance of biofuel use as part of the Renewable Fuel Standard (RFS2). The sale of fake RINs hurt the biofuel companies who are producing the fuel and if enough are sold, would keep obligated parties from legally achieving compliance.

According to OPIS who is hosting the 4th Annual RFS2, RINs & Biodiesel Forum being held October 18-19, 2012 in Chicago:

  • Obligated parties have had to pay approximately $200 million in fines so far as a result of EPA’s “buyer beware” enforcement policy.
  • A Maryland man now faces 32 years in prison for selling more than 32 million fraudulent biodiesel RINs.
  • Marketers across the country are worried that there is no good way to make sure their RINs are “clean.”

EPA regulations and RIN compliance are just a few of the topics that will be discussed during the conference. Click here to learn more and to register.

Biodiesel, conferences

CARD: Reducing RFS Would Not Achieve Goals

Joanna Schroeder

According to the Center for Agriculture and Rural Development (CARD) located at Iowa State, calls to reduce, revise or repeal the Renewable Fuel Standard (RFS) would not achieve the goals of the industries who are demanding the action.

“The desire by livestock groups to see additional flexibility in ethanol mandates may not result in as large a drop in feed costs as hoped,” said Iowa State Professor Bruce Babcock, author a new research brief, “Preliminary Assessment of the Drought’s Impacts on Crop Prices and Biofuel Production.”

As part of the research, Babcock analyzed 500 different scenarios using various levels of corn yield for the 2012 crop.  He then determined that a total waiver of the RFS would reduce corn prices less than 5 percent and cause less than a 5 percent reduction in ethanol production.

At first glance this seems like a mistake. But Babcock says the lower than expected results are due to the flexibility in complying with the RFS in 2012 and 2013. For example, during this timeframe, an estimated 2.4 billion excess Renewable Identification Numbers (RINs) can be used in place of purchasing actual gallons of a renewable fuel to demonstrate compliance. This allows obligated parties to carry over RINs and lowers the economic impact of a short crop such as what we are expecting this year due to excessive drought conditions affecting nearly 75 percent of crops across the country.

Read More

advance biofuels, biofuels, Ethanol, RFA

Raise Carbon Price

Joanna Schroeder

The European wind power industry is backing a proposal submitted by the European Commission to increase the price of carbon. This would be accomplished by delaying the auctioning of carbon allowances through the Emission Trading System (ETS). This action must be approved by Member States and the European Parliament.

“The European Commission has finally taken the first step towards boosting the carbon price in the short term,” said Rémi Gruet, Senior Regulatory Affairs Advisor for Environment and Climate Change at the European Wind Energy Association (EWEA). As a second step a permanent solution to the current and future oversupply of carbon allowances needs to be found to ensure a high and stable future price: the amount of allowances put on the market up until 2020 needs to be reduced by 2.6 billion.”

Gruet also said that increasing carbon prices will help both the climate and economic recovery. “The wind industry is one of the most dynamic and globally competitive, in 2010 contributing 32.4 billion Euros to the EU’s GDP, 8.8bn Euros in exports, and supporting 238,000 EU jobs.

Electricity, Energy, Wind

Retrofit Kits Available to Pump Higher Ethanol Blends

Cindy Zimmerman

Gilbarco Veeder-Root this week announced E25 Field Retrofit Kits are now available for the entire line of the company’s Encore® dispensers.

Retailers interested in offering E15 fuel or any other blend up to E25 will be required to prove E25 fuel compatibility and Underwriters Laboratory (UL) approval in order to maintain the unit’s listing. Encore E25 kits provide Gilbarco’s partners with an industry first opportunity in fuel marketing and an affordable way to upgrade existing equipment with UL-certified components.

“Gilbarco is committed to helping our retailers reach the Renewable Fuel Standard goal of 36 million gallons of alternative fuels annually by 2022,” said Chad Johnson, Encore Marketing Manager for Gilbarco Veeder-Root. “We are proud to be the first in the market to offer an affordable E25 retrofit solution that will help protect and enhance their brand.”

The Encore E25 Retrofit Kit includes an innovative meter and valve assembly that enables rapid installation. These kits continue Gilbarco’s commitment to providing products that meet the changing fueling landscape while minimizing retailers’ infrastructure upgrade costs.

Ethanol, Ethanol News

New Investments to Drive Biofuels Innovations

Cindy Zimmerman

USDAThe U.S. Departments of Agriculture (USDA) and Energy Wednesday announced a $41 million investment in 13 projects designed to drive more efficient biofuels production and feedstock improvements.

“If we want to develop affordable alternatives for oil and gasoline that will help reduce our dependence on foreign oil, we need investments like these projects to spur innovation in bioenergy,” said Agriculture Secretary Tom Vilsack. “By producing energy more efficiently and sustainably, we can create rural jobs, boost rural economies and help U.S. farmers, ranchers and foresters prosper.”

Five projects will be funded through the joint Biomass Research and Development Initiative (BRDI) to develop economically and environmentally sustainable sources of renewable biomass and increase the availability of renewable fuels and biobased products. Those projects include $4.25 million for the Quad County Corn Cooperative in Galva, Iowa to retrofit an existing corn starch ethanol plant to add value to its byproducts, which will be marketed to the non-ruminant feed markets and to the biodiesel industry.

Agricultural Research Service’s National Center for Agricultural Utilization Research in Peoria, Illinois will receive $7 million for a project to optimize rapeseed/canola, mustard and camelina oilseed crops for oil quality and yield using recombinant inbred lines. The oils will be hydrotreated to produce diesel and jet fuel.

A $6 million project at the University of Hawaii will optimize the production of grasses in Hawaii, including napier grass, energycane, sugarcane and sweet sorghum. Harvest and preprocessing will be optimized to be compatible with the biochemical conversion to jet fuel and diesel.

More information on the projects funded can be found here from USDA.

advance biofuels, aviation biofuels, biofuels, biojet fuel, biomass, USDA

Will Drought Impact the Renewable Fuel Standard?

Melissa Sandfort

Our latest ZimmPoll asked the question, “Should nutrition programs be split out of the Farm Bill?”

Our poll results: Seventy-seven percent said yes and twenty-three percent said no. What do you think? With all those nutrition programs is it really a “farm” bill?

Our new ZimmPoll is now live and asks the question, “How will drought impact the Renewable Fuel Standard?” With corn prices up nearly 50 percent in the last month and forecasts saying it will go higher in the near future, this summer is proving to be a rough one. Here are a few more stats: 1,000 counties in 26 states are deemed “natural disaster areas” because of drought; 61 percent of the land in the lower 48 states is currently affected by drought; 30 percent of the corn crop is in poor or very poor condition. So what do you think – will the drought and effect on the corn crop impact the RFS?

ZimmPoll is sponsored by Rhea+Kaiser, a full-service advertising/public relations agency.


KiOR Receives Approval to Sell Cellulosic Fuel

Joanna Schroeder

KiOR has been granted Part 79 registration by the Environmental Protection Agency (EPA) for its renewable gasoline blendstock 5, or cellulosic gasoline. This step is required before the sale of the fuel to be used in motor vehicles becomes legal.

“Part 79 registration is a landmark for KiOR and the renewable sector, as KiOR’s gasoline is the first renewable cellulosic gasoline that the EPA has registered for sale in the United States,” said Fred Cannon, KiOR’s President and Chief Executive Officer. “With this registration, KiOR’s breakthrough cellulosic gasoline will be fueling cars of American consumers this year, providing a truly renewable fuel option that uses only sustainable non-food feedstock, reduces greenhouse gases, creates American jobs, and reduces our dependence on imported oil.”

The company’s first production facility is scheduled to begin production later this year in Columbus, Mississippi. Cannon says that the facility will provide 150 new jobs and produce enough fuel to meet the transportation needs to 20,000 area families.

Cannon added, “This facility demonstrates how the Renewable Fuels Standard and forward-thinking states like Mississippi can combine to make a positive impact on both domestic energy policy and local rural economies.”

advance biofuels, blends, Cellulosic