ACE Conference 2026

Some Senators Urge End to Ethanol Incentives

Cindy Zimmerman

U.S. Senators Dianne Feinstein (D-CA) and Jon Kyl (R-AZ), together with 15 other senators, today sent a letter to the Senate leadership expressing their “lack of support for extending the current 54-cent-per-gallon tariff on ethanol imports and the 45-cent-per-gallon subsidy for blending ethanol into gasoline.”

Calling the incentives for domestic ethanol production “fiscally indefensible,” the senators wrote that ending them would “reduce the budget deficit, improve the environment, and lessen our reliance on imported oil.”

In response to the letter, Renewable Fuels Association (RFA) officials issued a statement saying that eliminating the investment in domestic ethanol production “may seem pennywise, but is extraordinarily pound foolish. Eliminating the tax incentive could erase the $3 billion of net revenue for federal tax coffers generated by the domestic ethanol industry in 2009 and put tens of thousands of Americans out of work.”

Addressing concerns about the secondary tariff on imported ethanol, the RFA stated, “The tariff on imported ethanol is neither a burden on imports nor a factor driving America’s dependence on imported oil. The tariff simply exists to offset the value of the tax credit, preventing American taxpayers from subsidizing foreign ethanol producers. In a time of budget concerns and tax debates, propping up industries in other nations that already enjoy the largesse of their native governments seems counterintuitive.”

Ethanol, Ethanol News, Government, RFA

ACORE Forum to Spotlight Renewable Energy Policy

Cindy Zimmerman

energyRenewable energy policy will be in the spotlight next week at the American Council on Renewable Energy (ACORE) forum being held December 8-9 in Washington, D.C.

According to ACORE, the Phase II Renewable Energy in America National Policy Forum will feature bi-partisan discussion of key energy issues. Each panel will begin with a topical presentation, followed by a conservative point of view and a liberal point of view, followed by a moderated give-and-take discussion to identify points of agreement and disagreement. An ACORE conference co-chair will moderate the panel, and a second co-chair will serve to summarize.

Keynote speakers for the event include Congressman Chris Van Hollen (D-MD), Secretary of Commerce Gary Locke, NREL Director Dan Arvizu, FERC Chairman Jon Wellinghoff and former Senator John Warner. A panel on “The State of Renewable Energy in America” will include ethanol company executive Jeff Broin, CEO of POET.

Energy, Ethanol

Soybean Growers Fly-in for Biodiesel

Cindy Zimmerman

In an effort to convey the urgent need for Congress to extend the biodiesel tax incentive, American Soybean Association (ASA) farmer-leaders are participating in a biodiesel fly-in today to meet with members of Congress in Washington, D.C.

Participating from ASA are grower-leaders Joe Steiner of Ohio, Bob Henry of Kansas and Darryl Brinkmann of Illinois. These ASA leaders are joining with farmers from state soybean associations, biodiesel producers and others in the biodiesel industry to push for passage of legislation to extend the biodiesel tax incentive during the lame duck session.

“Extension and renewal of the biodiesel tax credit are critical to the economic viability of the industry,” Steiner said. “Expiration of the biodiesel tax incentive on Dec. 31, 2009, has resulted in lost production and jobs. This situation is likely to worsen if the credit is not reinstated.”

In 2009, the U.S. biodiesel industry produced 545 million gallons of biodiesel. Based on August and September production levels, 2010 production is expected to be approximately 345 million gallons, a decline of over 35 percent from the previous year.

Biodiesel, Government, Soybeans

Chevy to Highlight Volt During Web Event

John Davis

Chevrolet will be highlighting a promise the company made three years ago – to design, build and sell the world’s first electric vehicle with extended-range capability, the Volt – in a web event tomorrow (Tuesday) morning:

To commemorate this milestone, we’ll host an event at the Detroit-Hamtramck Assembly facility – the home of the Chevrolet Volt. The pre-show begins at 9:30 a.m. EST, and will be led by GM CEO Dan Akerson along with other key members of GM and Chevrolet leadership, including representatives from the Volt development team.

You can check out the webcast here, and I’ll be talking with some of the good folks from Chevy during tomorrow’s Domestic Fuel podcast.

Car Makers, Electric Vehicles, Miscellaneous

Monsanto Ups Investment in Oilseed Canola

John Davis

Seed giant Monsanto is upping the amount of money it is investing in the oilseed canola, which can be turned into biodiesel.

This Reuters article says Monsanto is raising its spending on canola research and development to between about $20 million and $30 million, about the same amount the company puts into wheat, and will open a $12 million canola breeding center in Winnipeg:

“It’s a very large crop for this company,” said Derek Penner, president of Monsanto Canada.

Spending to improve canola yields remains a high priority, along with seeking greater resistance to the fungal disease blackleg, Penner said. China has restricted imports of Canadian canola with blackleg.

With such seed research investments, Canada canola acres may soon match, but are unlikely to surpass, plantings of wheat because of the need to rotate crops, Penner said.

Canola’s expansion is more likely to happen through higher per-acre yields and additional acreage in the northern United States, Penner said.

The fact that canola is so profitable for farmers is a key reason seed companies are investing in it, said Agriculture Minister Gerry Ritz in an interview.

“Canola is king. It is the best cash crop for producers.”

You can read more about Canadian canola biodiesel at this website: www.canolacouncil.org/biodiesel

Biodiesel, biofuels

Lufthansa to Start Commercial Flights on Biofuel

John Davis

Last May, I told you how Lufthansa was going to start flying some of its commercial flights on a biofuel mix sometime in 2011. Now, Biofuels Digest reports the German airliner will start a six-month trial of a 50-50 mix of biofuel and traditional kerosene in one of the aircraft’s engines on its regular Hamburg-Frankfurt-Hamburg route:

During the six months trial, Lufthansa will save around 1,500 tonnes of CO2 emissions, said Lufthansa Chief Wolfgang Mayrhuber in Berlin today. “Lufthansa will be the world’s first airline to utilise biofuel in flight operations within the framework of a long-term trial. This is a further consistent step in a proven sustainability strategy, which Lufthansa has for many years successfully pursued and implemented,” said Mayrhuber.

The ‘burnFAIR’ project dedicated to the testing of biofuel, unveiled by Lufthansa today, is a successful example of integrating research efforts for the purpose of realising climate care objectives. This project is part of an overall “FAIR” initiative (Future Aircraft Research), in which other issues – alongside biofuel compatibility – such as new engine and aircraft concepts or other fuels, e.g. liquified natural gas (LNG) are under study. The Federal Government is contributing a total of five million euros towards the ‘FAIR’ initiative, of the total 2.5 million euros is earmarked for the Lufthansa ‘burnFAIR’ project.

Biofuels Digest goes on to note that this is “the most ambitious undertaking yet announced in aviation biofuels – only the British Airways-Solena project rivals this extensive trial in extended flight operations.”

biofuels, International

FERC Attempts to Improve Grid Access for Solar & Wind

Joanna Schroeder

Earlier this month, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking aimed at removing barriers to the integration of wind and solar and other forms of alternative energies to the wholesale power grid. The 60 day comment period is in full swing and many in the wind industry are actively submitting comments.

According to a FERC release, the proposed rule would reform the Open Access Transmission Tariffs (OATT) and the Large Generator Interconnection Agreements filed by public utility transmission providers to require them to offer services that will allow for a more efficient integration of variable energy resources such as wind, solar and hydrokinetics into the grid system. This has been a challenging and ongoing issue for alt energies and the passage of the rule would signify the country’s commitment to renewable energy.

“Most of the new power plants for which developers are seeking access to the grid are variable resources such as wind and solar generators,” FERC Chairman Jon Wellinghoff said. “This proposal will help the Commission to cost-effectively integrate these and other variable generators into the grid in a way that helps maintain reliability and operational stability.”

According to Gregory K. Lawrence, with law firm McDermott Will & Emery and the head of the firm’s renewable business and his associate Mustafa Ostrander, the three proposed reforms address “discrete operational protocols” and should be viewed as “complementary parts of a package.” The reforms include:

  • Intra-hourly Transmission Scheduling—FERC proposes requiring public utility transmission providers to give their customers the option of using more frequent transmission scheduling intervals (15-minute intervals) within each operating hour.  This would allow transmission schedules to reflect more accurately power production forecasts, load profiles and other changing system conditions, while also allowing the system’s variability to be managed more effectively.
  • Power Production Forecasts—The proposed rulemaking also requires public utility transmission providers to amend their pro forma Large Generator Interconnection Agreement to incorporate provisions requiring interconnection customers with VER-generating facilities to provide to public utility transmission providers certain meteorological and operational data.  FERC believes this requirement will result in greater situational awareness and efficiency within the unit commitment, dispatch and reliability assessment process.
  • Generic Ancillary Service Rate Schedule—FERC also proposes adding a generic ancillary service rate schedule to the pro forma Open Access Transmission Tariff. Public utility transmission providers would be required to offer generator regulation service, to the extent physically feasible, to transmission customers using transmission service to deliver energy from a generator located within the transmission provider’s balancing authority area.

FERC’s goal with the proposed rules is to create a “reasonable foundation upon which public utility transmission providers will be well-positioned to manage system variability associated with increased numbers of VERs,” but acknowledges that these rules do not solve all the integration challenges.

Electricity, Smart Grid, Wind

Florida Biodiesel Firm Acquires Puerto Rico Company

Cindy Zimmerman

A Florida-based biodiesel firm is investing in a Puerto Rico company’s algae biofuels research.

biodieselAlternative Fuels Americas (AFA) announced today that it is acquiring Sustainable Agro Biotech of Puerto Rico, which has been developing proprietary technologies “to recycle carbon dioxide emission into microalgae varieties with robust growth and oil production capabilities and to achieve commercially feasible harvesting of microalgal products.” AFA will work with the Sustainable Agro Biotech team to further its research and develop a viable algae-to-biofuels capacity.

AFA CEO Craig Frank says they are very excited about the acquisition. “We have had an interest in algae for quite some time and have been looking for a company that fit well with our comprehensive approach to biofuel. This acquisition opens up new opportunities for AFA, and broadens our operational possibilities, both in terms of geography and the types of feedstock we have at our disposal.”

AFA has facilities in Gainesville, Florida and a 10 acre facility in Puerto Rico in partnership with University of Puerto Rico, Mayaguez.

Biodiesel

2011 Renewable Fuels Standards Set

Joanna Schroeder

The EPA has finalized the 2011 percentage standards for the four categories of fuel under the Renewable Fuels Standard (RFS2). As such, each producer and importer of gasoline and diesel determines the minimum volume of renewable fuel that it must ensure is used during the year in its transportation fuel. The required use of biofuels will increase each year until reaching the 36 billion gallons of renewable fuels level by 2022.

The final 2011 overall volume and standards are:

  • • Cellulosic biofuel – 6.6 million gallons; 0.003 percent
  • • Biomass-based diesel – 800 million gallons; 0.69 percent
  • • Advanced biofuel – 1.35 billion gallons; 0.78 percent
  • • Renewable fuel – 13.95 billion gallons; 8.01 percent

As predicted, the EPA has finalized a lower 2011 cellulosic volume than the original request made this past summer citing lack of commercial scale availability of advanced biofuels. However, despite the “set-back” the EPA remains optimistic that availability of cellulosic ethanol will grow in the next few years.

It should also be noted that the renewable fuel category includes starch-based ethanol, such as corn-ethanol, which is capped at 15 billion gallons in RFS2. This being said, the corn-ethanol industry is fast approaching a “production wall” per se and as a result, is lobbying through its “Ethanol Road Map” to increase the amount of corn-based ethanol allowed under RFS2.

*UPDATED POST*

Several organizations have responded to this story including Chris Thorne, the Public Affairs Director for Growth Energy. “There’s no question that the potential for cellulosic ethanol remains on track and that is why it is so important to have real targets to give confidence that there will be a market for those who are investing in the industry. Some of the pilot projects are on the edge of delivering commercial-scale volumes of cellulosic ethanol to the market, for a price that is competitive to gasoline.”

Thorne continued, “But not all pilot projects are that close, and that’s in large part because the market for ethanol is capped by arbitrary regulation in the U.S. What’s preventing the growth of cellulosic ethanol in the transportation fuels market is the lack of access to the market – and without that market, we’re not drawing the necessary investment. That’s why Growth Energy is pushing our Fueling Freedom proposal, which would reform market access and let cellulosic ethanol compete with gasoline derived from foreign oil.”

In addition, the Bob Dineen, the President of the Renewable Fuels Association stated, “The RFS was designed in part to ensure the evolution of America’s biofuels industry is successful. By reducing the standard for cellulosic biofuels, EPA is accurately reflecting the difficulties cellulosic biofuel technologies have encountered in obtaining the capital needed to fully commercialize. However, being aware of this fact, EPA should have been and must be careful to keep cellulosic biofuel targets ambitious so as to stimulate the kind of investment these technologies need to finish commercialization.”

Biodiesel, biofuels, Cellulosic, Ethanol

RFA Calls on EPA to Update RFS2 ILUC Models

Joanna Schroeder

Earlier this month, the California Air Resources Board (CARB) made a positive step for ethanol by updating its indirect land use models in the Low Carbon Fuel Standard (LCFS). This in effect, will reduce the ILUC penalties in half. Unfortunately, the new rule doesn’t take effect until mid-2011 although LCFS kicks in on January 1, 2011.

In light of this change, the ethanol industry is calling for the Environmental Protection Agency (EPA) to also reevaluate its modeling of lifecycle GHG emissions as defined in the Renewable Fuels Standard (RFS2). Recently the Renewable Fuels Association (RFA) submitted a letter to EPA Administrator Lisa Jackson asking for this very change. In fact, EPA was represented on CARB’s LCFS Workshop and has publicly highlighted the fact that its ILUC results were similar to those originally obtained by CARB.

“The proposed changes to the California LCFS analysis are likely to result in substantially lower ILUC values, meaning EPA’s analysis for the RFS2 will be inconsistent with the latest science being adopted by CARB. Because EPA was represented by two staff members on the LCFS Expert Workgroup that recommended the changes to CARB’s LUC analysis, we are curious as to whether EPA similarly plans to revisit its LUC analysis for the RFS2 and incorporate more up-to-date assumptions and data,” wrote RFA President and CEO Bob Dinneen in a letter dated November 23, 2010.

According to RFA, while EPA and CARB used different modeling approaches, some of the changes being adopted by CARB would result in lower values for ILUC in EPA’s RFS2 as well. Currently, corn-based ethanol has been given a 20 percent GHG emission reduction number in RFS2, but the industry wants to see this number much higher. Other areas that RFA would like EPA to visit again are the treatment of crop yields on newly converted land, treatment of carbon sequestration in harvested wood products and the effect of higher prices on crop yields.

The second purpose of the letter to Jackson was to respond to the EPA’s letter sent to RFA on September 29, 2010. Back in September, the RFA wrote to EPA “examining the impact of volume increases for individual biofuels in isolation of one another exaggerates the LUC impacts and misrepresents the real-world progression of the RFS2 as required by [the Energy Independence and Security Act].” They have argued, and continue to argue, that EPA’s isolation approach to calculating ILUC values for the various biofuels covered under the RFS2 ignores the dynamic relationships that exist between the fuels, the feedstocks and in the marketplace.

The bottom line, says RFA, is that the science behind ILUC is constantly evolving and requires continual monitoring and updating to ensure the best available science is being utilized to make decisions.

biofuels, corn, Ethanol, Indirect Land Use, RFA