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RI Legislature Moves Forward Biodiesel Tax Break

John Davis

A tax incentive designed to encourage the use of biodiesel has moved forward in the Rhode Island State Legislature.

dipalmaThe Providence (RI) Journal reports the state’s Senate Finance Committee gave unanimous approval to Sen. Louis P. DiPalma’s measure that would exempt blended biodiesel fuel from the state’s 30-cents-a-gallon motor fuel tax:

Current law generally exempts from the tax only 100 percent biodiesel fuel. The bill would also exempt biodiesel fuel that is mixed with regular diesel.

The bill “looks to put the right type of incentive in place” to further encourage the use of biodiesel fuel, DiPalma said at a hearing on the measure at the State House on Tuesday.

Among the bill’s cosponsors are Senate President M. Teresa Paiva Weed, D-Newport, Senate Majority Leader Daniel P. Connors, D-Cumberland, and Senate Minority Leader Dennis L. Algiere, R-Charlestown.

The vote occurred shortly after a hearing on the bill, S 0525, which advocates said would help local biodiesel manufacturers and distributors. Paiva Weed and Connors joined other committee members to vote in favor of the measure, which now goes to the full Senate.

According to the National Biodiesel Board, about half of the states now offer either tax credits, exemptions or both for biodiesel.

Biodiesel, Legislation

Drive Clean and Green in NC

A caravan of more than than 24 alternative fuel vehicles will leave from Raleigh, NC on April 15 at 3:30 p.m. and travel across the state. The Clean Fuel Advanced Technology program at the NC Solar Center is leading a clean transportation technology drive across North Carolina. The tour will continue with stops in Greensboro and Charlotte on April 16.

driving_clean_green_ncVIP drivers include: Congressman Bob Etheridge, U.S. Ambassador (retired) James Cain, NC Cabinet Secretaries: Gene Conti, Dee Freeman, Britt Cobb and Triangle Transit Authority Director, David King and over 24 alternative fuel/advanced technology vehicles including: E85, neighborhood electric, plug in hybrid, natural gas, and propane vehicles.

Sponsors of the tour include: NC Department of Transportation, NC Division of Air Quality, NC State Energy Office, Environmental Defense Fund and Novozymes of North America. More information visit: www.ncmobilecare.org.

Biodiesel, Car Makers, E85, Ethanol, News

Vilsack and Pelosi Push For More Ethanol

vilsackAs ethanol producers push for an increased amount of ethanol in gasoline, Agriculture Secretary Tom Vilsack says the government should move quickly for this allowance. Both Secretary Vilsack and Speaker of the House Nancy Pelosi spoke to the National Farmers Union annual convention in Arlington, Va.

“We can, we believe, move fairly quickly to move the blend rate to 12 or 13 percent in the interim,” said Vilsack. An increase in the ethanol additive can boost the demand for the product as much as 6 billion gallons a year. However, tests still need to be done on automobiles and small engines to be sure the increase of ethanol is not harmful.

Adora Andy, the EPA’s press secretary, said in a statement that the agency will review the request and “act based on the best available science.” The EPA is the reigning power on lifting the cap.

House Speaker Nancy Pelosi is also in support of the increase in the ethanol additive. She added, “It seems to me we should be able to do that.”

blends, Ethanol, Government

Producing Ethanol From Duckweed

duckweedDuckweed, a small aquatic plant, can help clean up energy waste and be converted into ethanol the same way as corn ethanol.

Researchers from North Carolina State University noted that gowing duckweed on hog wastewater can produce five to six times more ethanol than that of corn. They also say that producing ethanol into duckweed could be faster and cheaper than corn produced ethanol.

“We can kill two birds — biofuel production and wastewater treatment — with one stone: duckweed,” said Professor Jay Cheng.

Duckweed captures the nutrients in the wastewater for growth and preventing their release into the environment. In other words, Cheng says, “Duckweed could be an environmentally friendly, economically viable feedstock for ethanol.”

Cellulosic, Ethanol, feedstocks, News

Aventine Claims “Extra RINS” Cause for Bankruptcy

Joanna Schroeder

aventineWhile most ethanol companies blame financial troubles on high commodity and energy prices, Aventine Renewable Energy Holdings, Inc. has thrown a new reason into the ring — blaming its bankruptcy on the availability of excessive Renewable Identification Number credits or RIN.  RINS are used by the EPA to track how much ethanol is being blended into the the fuel supply. Oil companies were to have reported their ethanol use to the EPA by the end of February.

Typically the ethanol marketer (Aventine) assigns the RIN and can then sell the ethanol with or without the RIN. The value of the RIN sold separately fluctuates from as low as 2 ½ cents to as high as 16 cents per gallon.

In a company statement released earlier this week, Aventine’s President and CEO, Ron Miller, was quoted as saying, “Ethanol demand has also been negatively affected by refiners and blenders using excess renewable identification numbers (“RINS”) to help meet their renewable fuels standard obligations instead of purchasing actual gallons of ethanol.”

RIN trading has become flush with speculators causing concern that these excess credits may instead be the result of fraud and duplication. At present, EPA is planning to address this issue in RFS-2 which is now scheduled to be released and in effect in early 2011 and is looking to create a Moderated Transaction System (MTS) that would serve as the federal registry for RINS.

Today, there is a voluntary RINS registration system called RINSTAR that is run by Clean Fuels Clearinghouse. In a release rinstar-logo1today, company President Clayton McMartin said, “We are able to safeguard our members against invalid RINS by taking proactive measures thorough our patent pending certification processes.” 

As more ethanol is blended into the fuel system to meet environmental and domestic energy goals the controversy and market uncertainty surrounding the buying and selling RINs is expected to intensify.

Company Announcement, Ethanol

USDA Sees No Change in Corn Use for Ethanol

Cindy Zimmerman

USDAThe April World Supply and Demand report out today from USDA lowers ending stocks for corn, but keeps corn use for ethanol the same.

Corn ending stocks were cut by 40 million bushels “as higher expected feed and residual use more than offsets a reduction in food, seed and industrial use.” Food, seed, and industrial use was lowered 10 million bushels but ethanol remained unchanged at 3.7 million bushels.

Money FarmHowever, market analyst Mike Krueger from The Money Farm says that may change next time around. “Ethanol production has been slightly stronger than people expected,” Krueger said during a conference call for the Minneapolis Grain Exchange today. “I think it will depend on how quickly these VeraSun plants get back on line and running. We still have four months or so left in the marketing year for that to happen.”

The lower ending stocks for corn means higher projected prices for the year. USDA is now forecasting the 2008/09 season-average farm price for corn will be $4.00 to $4.40 per bushel, up 10 cents on both ends of the range. This compares with the 2007/08 record of $4.20 per bushel.

corn, Ethanol, USDA

CBO Report Not All Bad for Ethanol

Cindy Zimmerman

A new Congressional Budget Office report shows other factors actually had a bigger impact on food prices last year than ethanol did and that ethanol is reducing greenhouse gas emissions.

CBOMost media reports have focused on the findings in the report, “The Impact of Ethanol Use on Food Prices and Greenhouse-Gas Emissions,” that from April 2007 to April 2008, the rise in the price of corn resulting from expanded production of ethanol contributed between 0.5 and 0.8 percentage points of the 5.1 percent increase in food prices measured by the consumer price index (CPI).

However, the next sentence in the report summary states that over the same period, “certain other factors—for example, higher energy costs—had a greater effect on food prices than did the use of ethanol as a motor fuel.”

In addition, the report notes that ethanol’s effect on future food price inflation is “uncertain because the forces determining that impact move in opposite directions.”


Federal mandates now in place require additional use of ethanol in the future, which would continue to put upward pressure on prices. In contrast, increases in the supply of corn from cultivating more cropland, increasing crop yields, or improving the technology for making ethanol from corn or other feedstocks (raw materials) would tend to lower food prices.

Regarding the emissions side of the equation, the report states that “in the short run, the production, distribution, and consumption of ethanol will create about 20 percent fewer greenhouse gas emissions than the equivalent processes for gasoline. For 2008, such a finding translates into a reduction of about 14 million metric tons of carbon dioxide and equivalent gases (a standard measure of greenhouse-gas emissions).”

Ethanol, Government

Canadian Bioenergy, ADM Building Biodiesel Plant

John Davis

canadianbioenergyadmA leading biodiesel company north of the border has teamed up with an American agri-business giant to go in to the green fuel business together.

A press release from the Canadian Bioenergy Corporation says it will work with ADM to build and run a 70 million-gallon-a-year biodiesel plant. The joint venture will make biodiesel from canola crushed at ADM’s crushing facility at Lloydminster, Alberta.

Both companies are doing a feasibility study to figure out the best way to start and run the plant.

Biodiesel

Biodiesel Cold Soak Tax Credit Deadline Pushed Back

John Davis

irslogoBiodiesel producers not quite able to pass the newest quality standard… ASTM D 6751, which now includes a Cold Soak Filtration Test (CFST)… will have some extra time when they can still claim the Internal Revenue Service’s dollar-per-gallon tax credit. Those not meeting the new standard were supposed to lose the credit as of April 1st, but that’s been rolled back to October 1st.

Now, the CFST was developed to help cut down on fuel that has a tendency to turn to solid and clog fuel filters. This story from Biodiesel Magazine points out the extension puts the industry in an interesting position:

For producers having trouble passing the test, it is good news for them that they can continue to collect the credit while modifying their process. However, buyers are interested in purchasing B100 that meets the latest version of D 6751, which means purchasing biodiesel that passes the CSFT.

BQ-9000 certified producers and marketers, however, must meet the latest version of D 6751 to remain eligible for their BQ-9000 status.

Also, the invisible allowance of B5 in the diesel fuel specification, ASTM D 975, is predicated upon B100 meeting the latest version of D 6751.

The version of the cold soak method in existence today, which many people in the industry say is flawed, will be replaced later this year by a new, more feedstock-equal test method.

As you might remember from my post earlier this week, the newest ASTM quality standard… with the new Cold Soak Filtration Test… just passed out of the group’s committee of standards review process and received an official number – ASTM D 7501.

Biodiesel

Ethanol Emergency Response Training in MO and IL

transcaerEthanol emergency response training will be offered in eight Missouri and Illinois cities through May 14. This training group is offered by Transporattion Community Awareness and Emergency Response, a partnership of chemical and transportation industries that help communities with hazardous materials transportation and emergency preparedness.

Since ethanol is a prevalent fuel in the Midwest, first responders, including EPA on-scene coordinators, need to be prepared to respond to ethanol releases and fires. Fires involving ethanol or ethanol gasoline mixtures pose different hazards than traditional petroleum-based fires. Ethanol is water soluble and can burn with a flame so clear that it can be difficult to see.

The training will be offered in the cities of Rolla, Springfield, Carrollton, St. Joseph, Jefferson City, Laddonia, and Carthage in Missouri, and Sauget, Ill.

Ten EPA Region 7 on-scene coordinators will assist with the training sessions and the Mobile Command Post will be deployed to most of the training sites. The Missouri Department of Natural Resources and local fire and police departments are also participating. Several railroad companies are providing classroom instruction and hands-on training with railcars, including ethanol tank cars.

Registration details and logistical information about the eight training sessions can be obtained at www.transcaer.com/events.aspx.

Ethanol, News