POET-DSM Advanced Biofuels is hitting the pause button on production of cellulosic biofuels at Project LIBERTY and shifting instead to “R&D focused on improving operational efficiency,” according to the company which is a joint venture of Royal DSM and POET, LLC.

POET-DSM is blaming the shift on “EPA challenges with the implementation of the Renewable Fuel Standard (RFS).”

“Over the last three years, EPA management of the RFS has held back cellulosic ethanol advancement, hindered future agricultural markets for U.S. farmers, and undermined what the President has promised,” said POET’s Senior Vice President of External Affairs and Communications, Kyle Gilley.

Gilley says EPA has continuously implemented lower RVO levels for cellulosic biofuels, granted small refinery waivers that caused a drop in D3 RIN values removing an incentive for purchasing the product and commercializing the technology, and blocked new cellulosic pathways by changing the approval mechanisms outside of the required legal processes.

“Because of these policy changes, the economic landscape for cellulosic ethanol in the US makes private and global investments in this technology more challenging. As a result, our joint venture is responding by temporarily pivoting and focusing on R&D efforts to improve technological efficiencies and explore additional international licensing opportunities in countries that are not choosing oil over agriculture,” said President DSM North America Hugh Welsh.

As part of this effort, the joint venture will use biomass stored on site or already under contract and will not purchase additional biomass at this time. The team needed to sustain R&D efforts has been evaluated and the joint venture will move forward with a reduced headcount in February.

Gilley and Welsh participated in a conference call with reporters Tuesday to discuss the action.