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DOE Offers Funding for Next Generation Biofuels

Cindy Zimmerman

The U.S. Department of Energy is now accepting applications for up to $30 million in total funding for small-scale process integration projects that support the development of advanced biofuels that will be able to replace gasoline or diesel without requiring special upgrades or changes to the vehicle or fueling infrastructure.

“Developing the next generation of American biofuels will enhance our national energy security, expand the domestic biofuels industry, and produce new clean energy jobs. It will help America’s farmers and create vast new opportunities for wealth creation in rural communities. By investing in innovative approaches and technologies, we can continue to move the biofuels industry forward and grow our economy,” said Energy Secretary Steven Chu in a release from the agency.

The projects will focus on optimizing and integrating process steps that convert biomass into biofuels and bioproducts that will eventually be used to support hydrocarbon fuels and chemicals. These process improvements could include pretreatment methods that alter the biomass to improve the yield of sugars in subsequent process steps, less costly and more efficient enzymes that produce sugars, and fermentation organisms and catalysts that convert the sugars into fuel and chemical intermediates. Successful applicants will demonstrate the research potential to improve the economics and efficiency of their proposed process.

Read more here.

biofuels, Cellulosic, Government

Sen. Grassley Defends Ethanol Tax Credit

Cindy Zimmerman

During his Tuesday morning press call with agriculture reporters, Sen. Chuck Grassley (R-IA) once again defended the tax credit for ethanol being extended in the tax bill poised to be passed by the Senate.

“Extension of both the ethanol credit and tariff have garnered a great deal of attention,” Grassley said. “It’s easy to see that ethanol has proved its worth in gold by displacing millions of gallons of imported oil….There shouldn’t be argument about saving more than 100,000 jobs and reducing our dependence on foreign oil.”

Grassley took issue with those who call the ethanol blenders tax credit a “subsidy,” comparing it to similar tax credits included in the bill. “If you want to call this a subsidy, are you going to call the research and development tax credit for major corporations a subsidy?,” he asked. “I think it’s kind of demagogic to be thinking about ethanol being a subsidy for 30 years, when the research and development tax credit has been around for 30 years. How come you don’t tackle them all instead of just one?” He thinks the only explanation is the campaign against ethanol by groups that have “never liked ethanol – big oil, and friends now from the environment and big food and even some agricultural groups.”

The Iowa senator says he is also pleased with the retroactive extension of the biodiesel tax credit in the bill. The latest word is that a vote on the measure could come this afternoon.

Listen to some of Grassley’s comments here: Chuck Grassley

Biodiesel, Ethanol, Ethanol News, Government

Angry Sparks Turning to Flames Over Ethanol Tax Package

Joanna Schroeder

As the domestic ethanol industry’s confidence climbs that their ethanol tax incentives will see at least one-year extensions, angry sparks are turning into flames from those opposed to the move. One group in particular that has voiced its opposition to the passing of the Volumetric Ethanol Excise Tax Credit (VEETC) as well as the ethanol tariff is the Brazilian Sugarcane Industry Association (UNICA) who had been claiming for years that American ethanol policy is designed to keep American ethanol in and foreign ethanol out.

Here is what we know. For more than 20 years, up until 2001, there was “parity” between the two policies, and then that changed when the tariff was set at 54 cents and VEETC at 53 cents. Today, VEETC is at 45 cents and the tariff remains at 54 cents. What is unclear, is where the VEETC will stand should it receive a one-year extension. There was talk that it would be lowered to 36 cents; yet in the current package it remains at 45 cents. Then this morning rumors began en force that there is a possible Senate amendment that would lower the VEETC to 36 cents.

As Joel Velasco, UNICA’s Chief Representative of North America and the author of the blog “Sweeter Alternative” writes, the proposal to reduce the VEETC to 36 cents would in essence, double the difference between the tax credit and the tariff (i.e., the effective trade barrier benefiting corn ethanol) from nine to 18 cents. He notes that the tariff was originally imposed by President Jimmy Carter “to offset the tax credit so that America does not subsidize foreign producers,” but finishes by arguing, “Now some in Congress are trying to change the rules by making the tariff a true trade barrier rather than a subsidy offset.”

For the past year, UNICA has been arguing that true parity is to let both VEETC and the tariff expire and let the free markets take over (Brazil removed its tariff earlier this year). But with the movement in the Senate actually looking like it might go somewhere, UNICA is no longer sending out sparks – they are throwing flames.

“For 30 years, the United States has been subsidizing corn ethanol and imposing trade barriers on imported ethanol. Over the last three years, UNICA has sought to engage with various stakeholders in the United States in an effort to reform U.S. ethanol policy in a way that reduces trade distortions and would avoid trade conflict, said UNICA President & CEO, Marcos Jank. “However, after being rebuffed twice – first in the Bush Administration’s 2008 Farm Bill and now apparently during the Obama lame duck negotiations – it is clear that the United States is not committed to open and fair trade in clean energy, particularly ethanol.”

Jank continued, “Consequently, UNICA will urge the Brazilian government to initiate dispute settlement proceedings at the World Trade Organization (WTO) as soon as this legislation passes Congress and is signed by President Obama. We will have exhausted all options to resolve our differences through informal dialogue and the U.S. legislative process. It will then be time for the WTO to resolve this matter in accordance with applicable international rights and obligations.”

The world will be watching to see if the flames turn into fire as the 112th Congress begin in January 2011.

Ethanol, UNICA

Investments in G-20 Clean Power Projects Could Top $2.3 Trillion

Joanna Schroeder

Private funds have been difficult to secure in the U.S. for clean energy programs for the past year; however, on a global scale, private investments in G-20 clean power projects could total more than $2.3 trillion by the end of this decade alone. This figure was released as part of a new report from the Pew Charitable Trusts this month: Global Clean Power: A $2.3 Trillion Opportunity. The majority of investments will be made in Asia, led by China and India, as driven by massive energy demand and strong clean energy policies. However, the report continues, by countries adopting such policies, every G-20 member has an opportunity to attract more private funds in clean power projects and compete more effectively for business.

The report examined projected private investment in wind, solar, biomass/energy from waste, small hydro, geothermal and marine energy projects. To predict the levels of private investments into projects, the report modeled three policy scenarios to determine future growth through 2020:

  • * Business-as-usual – no change from current policies: total investment projected to be $1.7 trillion by 2020
  • * Copenhagen – policies to implement the pledges made at the 2009 international climate negotiations in Copenhagen: total investment projected to be $1.8 trillion
  • * Enhanced clean energy – maximized policies designed to stimulate increased investment and capacity additions – total investment projected to be $2.3 trillion

“The message of this report is clear: countries that want to maximize private investments, spur job creation, invigorate manufacturing and seize export opportunities should strengthen their clean energy policies,” said Phyllis Cuttino, director of the Pew Climate and Energy program.

The report found that the clean energy sector continues to be an immense economic opportunity and Asia became the top regional destination for clean power finance in 2010. Within the region, China and India are leading the way (in all energy demand, not just clean energy demand) and by 2020, the report anticipates that 40 percent of global clean power project investments will be made in China, India, Japan, and South Korea.

Michael Liebreich, CEO of Bloomberg New Energy Finance, the company that compiled the underlying data for the report said, “Strong and consistent policies in Asia have helped double private investment over the past two years. Asia is now the leading region for clean energy investment, and its lead is set to extend in the near future unless Europe and the US make a step change in their support for the sector.”

While the U.S. is currently lagging far behind in private investments in clean energy, the report found that they are among those with the most to gain from passing strong clean energy policies. The report cites an example that says the U.S. has the potential to attract $342 billion in clean power project investments over the next 10 years under the Enhanced clean energy scenario.

You can download a copy of Global Clean Power: A $2.3 Trillion Opportunity here.

biomass, Electricity, Energy, Geothermal, Research, Solar, Waste-to-Energy, Wind

Ethanol Tax Incentive Cost Perspective

Cindy Zimmerman

The cost of extending the ethanol blenders tax credit for another year is well worth it, according to the Renewable Fuels Association.

Renewable Fuels Association LogoExtending the Volumetric Ethanol Excise Tax Credit (VEETC) is estimated to cost about $6 billion dollars in 2011 at the current rate in the Senate bill of 45 cents per gallon. The United States spends about $750 million per day on imported oil, or $5.25 billion per week. Which means, extending the VEETC through 2011 would be the equivalent to about one week’s worth of oil imports – eight days, to be precise.

The Senate measure that includes extending the ethanol tax credit was moved along yesterday with a vote of 83 to 15 to formally end the debate and will soon be put to a final vote. RFA president and CEO Bob Dinneen hopes that will be very soon. “The Senate has taken an important step to keep America on the path toward greater energy self-reliance,” said Dinneen. “We encourage the Senate to move as swiftly as possible to pass this measure.”

Despite the cloture vote, the rules allow the Senate to debate the bill until midnight tonight, but the final vote could be held before then or delayed until tomorrow morning. Senator Dianne Feinstein (D-CA) is expected to introduce an amendment to cut the tax credit and the associated tariff to 36 cents, but Senator Chuck Grassley (R-IA) says a vote on the amendment is unlikely.

As for the future, Grassley expects some changes. “We’re all kind of committed to taking a new approach and the phasing out of the tax credits,” he said during his Tuesday morning conference call with reporters.

RFA’s Dinneen says the industry also expects changes in the incentives, but the extension gives them time to adapt. “This one-year extension will provide the industry and lawmakers breathing room to think through responsible reform of ethanol tax policy and all energy tax policy more specifically,” he said.

Ethanol, Ethanol News, Government, RFA

First 350 Chevy Volts Headed to New Homes

Joanna Schroeder

Some lucky residents of California, Texas, Washington D.C. and New York could have a special surprise under their tree this holiday, a new Chevy Volt (Okay, maybe in their driveway with a bow on top). The first truckload of Volts left the Detroit-Hamtramck Assembly Plant yesterday destined for these markets and will receive the world’s first extended range electric vehicles. There are a total of 350 to be sent to new homes this week.

“Today is a historic milestone for Chevrolet,” said Tony DiSalle, Volt marketing director. “We have redefined automotive transportation with the Volt, and soon the first customers will be able to experience gas-free commuting with the freedom to take an extended trip whenever or wherever they want.”

The feature that sets the Volt apart is its Voltec electric propulsion system, which combines battery-only electric driving with an efficient, gas-powered engine giving the Volt up to 379 total miles of driving before having to recharge the battery or fill up the small gas tank. The Volt is the only mass produced U.S.-built electric vehicle and the only electric vehicle that has a flex-fuel component.

Earlier this year, Chevrolet shipped 15 pre-production Volts to technology enthusiasts and electric vehicle advocates whom were the first consumers to experience the Volt every day under real-world conditions during a 90-day vehicle and charging evaluation program. Unfortunately, I was not one of them.

However, I have friends in launch states…Hint. Hint.

E85, Electric Vehicles

Biodiesel Tax Incentive Clears Cloture; NBB Optimistic

John Davis

The federal $1-a-gallon biodiesel blenders credit has cleared an important legislative hurdle, and the National Biodiesel Board is optimistic it will become law. Earlier today, the U.S. Senate voted to end debate (invoking cloture) on the package of tax credits, including the biodiesel incentive, by a bipartisan 83-15 margin.

As the vote was going on, I talked to the NBB’s Vice President of Federal Affairs, Manning Feraci, who believes, this time, the measure is headed for actual passage.

“What this does, essentially, is put us on a glide path to have Senate passage in the next day or two of the tax package that is carrying everything from the two-year extension of the Bush tax cuts, and, as it applies to the biodiesel industry, a retroactive extension through 2011 of the biodiesel tax incentive,” Feraci said.

He believes that large bipartisan support in this cloture vote is a positive indicator for final passage. But Feraci admits some Democrats, especially in the House, where the bill would have to return once the Senate passes it, have some real angst over the package President Obama negotiated with the Republicans. “The Democrats, who still control the House at this point, are trying to figure out how they’re going to play this.” He says while no one wants Americans’ taxes to go up on January 1st, there’s a high-stakes game of chicken being played right now.

Feraci admits it has been a frustrating year for the biodiesel industry with the loss of the tax break and the lack of push until the 11th hour from the Obama Administration to get this passed. And he says there are worries that some fiscal hawks, especially from the Republican side, have some real heartburn with the tax break … although Feraci is quick to point out the economic “bang for the buck” the incentive provides. In addition, if the current Congress is not able to get this passed before the new session in January, when the Republicans take control of the House, the bipartisan support biodiesel enjoys could ensure it eventually passing, no matter who controls Congress. Feraci adds that passage could make 2011 a banner year for biodiesel, because it will bring stability to the industry. In the meantime, he’s watching carefully what is happening.

“We’re just going to have to stay tuned to see how this is going to play out over the next couple of days.”

Listen to more of my conversation with Feraci here: Manning Feraci, NBB

Audio, Biodiesel, Government, Legislation, NBB

Iowa City Woman Wins $7,500 In Free Fuel & Food

Joanna Schroeder

An Iowa City woman received a very welcome early holiday gift – free food and fuel for a year from the  Iowa Corn Growers Association. Katie Ortmann was the winner of the Iowa Corn Fed GameDay GiveAway campaign when her name was called during halftime of the Iowa State versus Iowa men’s basketball game held this past Friday, December 10, 2010 in Iowa City.

The year-long promotion, designed to highlight the many uses of corn and its importance to Iowa, traversed a year of Iowa State versus Iowa sporting events that included football, basketball and wrestling matches. Iowans were able to register to win from August 20th through November 20th and the grand prize was free food and fuel for one year valued at $5,000 in groceries and $2,500 in ethanol from Kum & Go.

Runner-up prizes were also awarded. Marc Foster, also of Iowa City, was randomly selected to win free food and fuel during the Iowa versus Iowa State wrestling meet on Friday, December 3. In addition, Chris Dodel’s name was drawn to win the same prize during the Iowa versus Iowa State women’s basketball game on Thursday, December 9th. He resides in Urbana, Iowa.

“We’ve reached thousands of people with the Iowa Corn Fed GameDay GiveAway promotion,” said Mindy Williamson, director of communications and public relations for the Iowa Corn Promotion Board (ICPB) and the Iowa Corn Growers Association (ICGA). “Ethanol use was just one benefit featured in the program, which included food and feed uses for corn and messages about corn’s importance to Iowa’s economy, environment and energy independence.”

On behalf of ICGA and ICPB, Williamson thanked Kum & Go, Cyclone Sports Properties and Hawkeye Sports Properties for helping to sponsor the Iowa Corn Fed GameDay GiveAway sweepstakes that is part of a four-year contract with both Hawkeye Sports Properties and Cyclone Sports Properties. The promotion includes radio, television, internet, and on-site marketing and highlights the many uses for corn and its importance to Iowa- as everyday is GameDay for Iowa’s farmers.

Agribusiness, corn, Ethanol, food and fuel, Promotion

It’s Time to Go Back to School

Joanna Schroeder

It’s never too late to go back to school. The Center for Advanced BioEnergy Research (CABER) in the College of Agricultural, Consumer and Environmental Sciences (ACES) at the University of Illinois is now offering an online class in bioenergy systems (ACES 409) for the Spring 2011 semester. The class meets on Tuesday evenings from 6:30 p.m. – 9:00 p.m. CST beginning on January 18 and ending on May 10, 2011.

The class is designed as in introductory survey course covering a wide range of bioenergy issues including agronomy of bioenergy crops; harvest, storage and transportation issues; biobutanol and biodiesel production, lifecycle analysis and environmental implications, and more. Lectures will be presented by the course instructors as well as by selected experts from industry and academic research.

The classes will be delivered online at Elluminate.com, a site optimized for online learning that allows students to interact, real-time, with presenters and other participants.

“We’re excited to offer this class in bioenergy online. We’ve been teaching it on campus for three years and have had several requests to offer the information in an online format,” said Hans Blaschek, Director of CABER. “Technology is changing so quickly in the bioenergy arena. This class should be beneficial to people throughout the world who are interested in learning more about bioenergy technology and research initiatives at the U of I.”

In addition to gaining an understanding of each topic presented and progress made in that area, students will learn how each issue fits into the broader bioenergy context and the challenges that remain.

Course tuition and fees are $1,167 for 3 credit hours. Registration is currently open and available until January 18 or until the class is full. You are not required to be a current student of U of I to enroll in the class. To register, go to www.outreach.uiuc.edu, select “NON-DEGREE Registration.”

bioenergy, Education

Update On Biofuels Tax Credit Extensions

Joanna Schroeder

The biofuels industry has been watching closely as the various biofuels tax incentives make their way through the Senate. Today the U.S. Senate voted to invoke cloture on the motion to proceed to major tax legislation containing one-year tax extensions of key biofuels tax incentives including VEETC, the Small Ethanol Producer Tax Credit, Secondary Tariff, the Alternative Vehicle Refueling Property credit and the $1 per gallons biodiesel tax credit for both 2010 and 2011.

“This procedural vote is the first step in the legislative process, and it signals that the U.S. Senate will adopt the tax package containing critical ethanol extensions later this week. We are hopeful that very soon after the Senate enacts this legislation the U.S. House of Representatives will as well,” said Brian Jennings, Executive Vice President of the American Coalition for Ethanol (ACE).

Jennings continued, “ACE has mobilized grassroots support for the tax legislation and ethanol provisions in the U.S. House so that the bill is sent to President Obama’s desk for his signature. Members of Congress voting for this important legislation will help prevent Americans from paying higher gas taxes, help save existing jobs and create new jobs in rural American and reduce our dangerous dependence on foreign oil.”

Growth Energy also weighed in on the vote and CEO Tom Buis said, “With today’s vote, the Senate took a critical step toward reducing our dependence on foreign oil, creating jobs in the U.S., improving our environment, and strengthening our national security. Extending the current ethanol incentives today will give Congress the opportunity to implement longer term solutions, like our Fueling Freedom Plan, next year.”

ACE, Ethanol, RFA