Biofuels Offer Benefits for California’s Carbon-Neutral Future

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In comments submitted last week to the California Air Resources Board (CARB), a group of ag and biofuel organizations and companies highlighted how renewable fuels like ethanol can help the state achieve its goal of reaching carbon neutrality by 2045 or sooner. CARB is seeking input as part of updating its Scoping Plan which lays out the path toward achieving the state’s carbon reduction targets.

The comments were signed by leadership of the Renewable Fuels Association, Growth Energy, National Corn Growers Association, Aemetis Inc., Alto Ingredients Inc., Calgren Renewable Fuels, Pearson Fuels, Propel, POET and RPMG. Their comments spotlight recent state-funded research that indicates pathways to carbon neutrality through greater reliance on renewable fuels like low-carbon ethanol.

Reminding CARB that ethanol has already cut more than 26 million metric tons of carbon in California with a weighted average carbon intensity 46% lower than gasoline, the group recommended first that the board expedite the approval of E15 as a legal fuel in California. This action alone has the potential for an immediate 50% increase in GHG reductions from ethanol in the existing light-duty fleet.

Second, the group recommended the state consider requiring internal combustion engine light-duty vehicles sold in California be flex-fuel vehicles beginning in model year 2024. This requirement would put more vehicles on the road capable of maximizing GHG reductions comparable to battery electric vehicles through use of higher biofuel blends, which emit fewer toxic tailpipe emissions.

Finally, they urged that the Low Carbon Fuel Standard program be extended beyond 2030 in a form that is consistent with the state’s carbon neutrality goals. Specifically, the program should incorporate crediting for agricultural soil carbon sequestration, given the significant opportunity for GHG reductions with appropriate incentives and accounting.

“Ethanol in a wide range of blend levels above today’s typical 10% blend represents an immediate, mid-term and long-term opportunity for California to maximize GHG reductions, while providing affordable fuel to consumers and encouraging new economic development and job growth in the state.”

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Sustainable Aviation Fuels Plan Flaw Could Hurt Farmers

Cindy Zimmerman Leave a Comment

In the rush to get as much spending in the massive Build Back Better bill as possible, Congressional Democrats created a new tax credit for sustainable aviation fuel (SAF) starting at $1.25 a gallon and increasing based on the carbon content of the biofuel, but the plan could favor foreign imports over American farmers and biofuel producers in its current form.

America’s top biofuel and farm advocates are asking Democratic leaders to fix a “major flaw” in the House Ways & Means Committee text released Friday night for tax provisions of the budget reconciliation, which is set for consideration Tuesday.

Despite farm-friendly promises as recently as Thursday from White House leaders, the legislation under consideration would rely on foreign standards based on decade-old models, rather than updated lifecycling modeling by scientists at the Department of Energy who study the U.S. agricultural supply chain, including both direct and indirect land use.

“Without a change in these three bills before the House of Representatives, U.S. biofuel producers will not be able to participate in the SAF market, rural communities will be locked out from contributing to a cleaner climate, and our nation’s ability to decarbonize the airline fleet will suffer,” said the Renewable Fuels Association, Advanced Biofuels Business Council, American Farm Bureau Federation, American Soybean Association, Growth Energy, National Biodiesel Board, National Corn Growers Association, National Farmers Union, and the National Sorghum Producers in a letter Sunday.

USDA joined the government-wide Sustainable Aviation Fuels (SAF) Grand Challenge to meet 100% of U.S. aviation fuel demand by 2050 announced during a White House roundtable on Thursday.

Under the plan, USDA will “support U.S. farmers with climate-smart agriculture practices and research, including biomass feedstock genetic development, sustainable crop and forest management at scale, and post-harvest supply chain logistics. USDA will also support fuel producers with carbon modeling components of aviation biofuel feedstocks.”

USDA will work to ensure farmers, foresters, small businesses and rural economies benefit from these opportunities with attention to cost, quality and quantity of agricultural-based feedstock for producing SAF. The Department will conduct research to support biomass feedstock genetic development, sustainable crop and forest management, and post-harvest supply chain logistics such as through transportation, storage, preprocessing and regional supply chain integration, optimization and greenhouse gas reductions.

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Biodiesel Tax Credit Extension in Build Back Better Bill

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The National Biodiesel Board is pleased the House Ways & Means Committee include a proposed extension through 2031 of the biodiesel and renewable diesel blenders tax credit in the Build Back Better Act.

“Biodiesel and renewable diesel are clean, low-carbon fuels that are widely available today to achieve the carbon reductions Congress is seeking. These fuels are 74% less carbon intensive than petroleum diesel on average and have prevented more than 140 million tons of carbon emissions since 2010. Moreover, they substantially cut emissions of particulate matter that impact cancer rates, asthma and other respiratory diseases, which can lower associated healthcare costs,” said Kurt Kovarik, NBB Vice President of Federal Affairs. “The biodiesel tax credit continues to be extremely successful in expanding consumer access to these clean, low-carbon fuels while driving economic growth and job creation. NBB and its members sincerely thank Representative Axne and Senator Cantwell along with other champions for ensuring the credit is included in this legislation.”

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Biofuel Infrastructure in Build Back Better Bill

Cindy Zimmerman Leave a Comment

Biodiesel and ethanol producer organizations are pleased that both the House and Senate Agriculture Committees have included infrastructure funding for higher ethanol blends into their drafts for the Build Back Better Act budget reconciliation package.

Specifically, the new bill language provides for $960 million to install, retrofit, or otherwise upgrade fuel dispensers or pumps and related equipment, storage tank system components, and other infrastructure required to ensure the availability of fuel containing greater than 10 percent ethanol and fuel containing greater than 20 percent biodiesel.

Renewable Fuels Association President and CEO Geoff Cooper thanked Senate Ag Committee Chairwoman Debbie Stabenow and House Ag Committee Chairman David Scott for their support. “They understand the critical role that low-carbon ethanol will continue to play in efforts to combat climate change. RFA’s members have pledged to reach net-zero greenhouse gas emissions by 2050 or sooner, and building out the infrastructure to distribute higher ethanol blends is an important part of reaching that goal.”

American Coalition for Ethanol (ACE) CEO Brian Jennings said this is a historic provision for biofuels. “ACE members appreciate the tenacity of members of Congress like Sen. Amy Klobuchar and Reps. Cindy Axne and Angie Craig who helped secure nearly $1 billion for biofuels infrastructure funding in the reconciliation bill, representing a historic level of support if it becomes law.”

“Expanding consumer access to low-carbon biodiesel and Bioheat® fuel through infrastructure grants can generate immediate health care benefits and savings for many communities at a very low-cost,” said National Biodiesel Board Vice President of Federal Affairs Kurt Kovarik.

To date, USDA has provided $23.2 million in grants to share costs with 24 projects that support more than 900 million gallons of biodiesel. The increased use of biodiesel through those projects will cut carbon emissions by more than 8.5 million metric tons, at a cost of less than $2.75 per ton.

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USDA Projects Higher Corn and Soybean Production

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Corn and soybean production are both forecast to be higher this year compared to 2020, according to the latest Crop Production report issued Friday by USDA’s National Agricultural Statistics Service (NASS).

According to the report, corn production is up 6% from last year, forecast at 15.0 billion bushels while soybean growers are expected to increase their production 6% from 2020.

The average U.S. corn yield is forecast at 176.3 bushels per acre, up 1.7 bushels from last month’s forecast and up 4.3 bushels from last year. NASS forecasts record high yields in California, Illinois, Indiana, Kentucky, Michigan, New York, North Carolina, Ohio, Oklahoma, and Pennsylvania. Acres planted to corn, at 93.3 million, are up 3% from 2020. Area to be harvested for grain is forecast at 85.1 million acres, up 1% from last month and 3% more than was harvested last year. As of Aug. 29, 60% of this year’s corn crop was reported in good or excellent condition, 2 percentage points below the same time last year.

Area for soybean harvest is forecast at 86.4 million acres, down less than 1% from last month but 5% more than was harvested last year. Planted area for the nation, estimated at 87.2 million acres, is up 5% from last year. Soybean yields are expected to average 50.6 bushels per acre, up 0.6 bushel from last month’s forecast and up 0.4 bushel from 2020. If realized, the forecasted yields in Illinois, Indiana, Kentucky, Maryland, Mississippi, Missouri, New York, Ohio, Pennsylvania, and Virginia will be record high.

The September World Agricultural Supply and Demand Estimates was also released on Friday showing the 2021/22 U.S. corn outlook is for larger supplies, increased feed and residual use, greater exports, and higher ending stocks. Projected beginning stocks for 2021/22 are 70 million bushels higher based on a lower use forecast for 2020/21, with reductions in corn used for ethanol and exports. U.S. soybean supply and use changes for 2021/22 include higher beginning stocks, production, exports, ending stocks, and lower crush.

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White House Holds Roundtable on Sustainable Aviation Fuels

Cindy Zimmerman

Biofuel industry leaders and officials from the Biden Administration met virtually for a White House roundtable discussion on the future of sustainable aviation fuels Thursday. In conjunction with the event, the White House announced a goal to achieve 3 billion gallons of SAF production and reduce aviation-related emissions by 20 percent by 2030.

Renewable Fuels Association President and CEO Geoff Cooper participated in the event, sharing RFA’s view that SAF production presents a major new market opportunity for ethanol producers, as the lifecycle carbon footprint of ethanol continues to shrink and the economics of ethanol-to-jet fuel processes continue to improve. He also highlighted a recent letter from RFA member companies to President Biden, in which they pledged that the ethanol they produce will achieve an average GHG reduction of 70% compared to petroleum by 2030 and a net-zero emission carbon footprint by 2050 or sooner.

“Ethanol has a decades-long proven track record for reducing greenhouse gas emissions from motor vehicles, and we are confident that ethanol will play a central role in cleaning up aviation fuels as well,” said Cooper. “Today’s average corn ethanol already cuts GHG emissions in half compared to petroleum, and some readily available sources of ethanol in the market have been certified by the California Air Resources Board as providing a 70-80% GHG reduction.”

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E15 Ruling Rehearing Denied

Cindy Zimmerman

The D.C. Circuit Court of Appeals Thursday denied a petition for rehearing regarding the recent American Fuel & Petrochemical Manufacturers, et al. vs. EPA decision, in which the court vacated a 2019 regulation allowing year-round sales of a fifteen percent ethanol fuel blend (E15).

Petitioners the Renewable Fuels Association, Growth Energy and the National Corn Growers Association released the following statement:

“Today’s petition denial is another hurdle to ensuring year-round access to low-carbon E15, however, due to timing, American drivers and retailers will be able to finish out the E15 summer driving season without disruption to their access to cleaner fuel choices at the pump. Moving forward, we continue to push for a permanent remedy long before the start of next year’s summer driving season.”

American Coalition for Ethanol (ACE) CEO Brian Jennings says they are disappointed in the decision even though EPA’s interpretation of the Clean Air Act to permit E15 the same gasoline volatility treatment as E10 is consistent with Congressional intent and reflects the realities of today’s motor fuel market. “As we’re just days away from the end of the summer driving season, this ruling should not impact 2021 summer sales of E15, and ACE is helping pursue multiple avenues to ensure E15 sales will not be disrupted next year,” said Jennings, adding that ACE is encouraging support of bipartisan, bicameral legislation to allow year-round E15 sales.

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Vilsack Announces Renewable Energy Investments

Cindy Zimmerman

Agriculture Secretary Tom Vilsack announced Thursday that USDA is investing $464 million to build or improve renewable energy infrastructure and to help rural communities, agricultural producers and businesses lower energy costs in 48 states and Puerto Rico. USDA is financing $129 million of these investments through the Rural Energy for America Program and $335 million through the Electric Loan Program.

Among the investments announced, Red Trail Energy in North Dakota will use a $25 million loan to build a carbon-capture processing and storage facility at an ethanol manufacturing facility. The project will provide a 40 to 50 percent reduction in the carbon intensity score of ethanol the company produces. It also will enable the company to distribute ethanol to low-carbon fuel standard markets.

Secretary Vilsack was asked about aid for biofuel producers affected by the pandemic last year. “We are in the process of finalizing plans to provide $700 million assistance to the biofuel industry because they didn’t receive benefits under previous COVID packages,” said Vilsack. However, he explained, these things take time and he can’t commit to when it might happen because he is not in control of the whole process.

“The first thing you have to do is write the rules,” he said. “Once you make that decision…then you have to go to OMB, the Office of Management and Budget. We don’t have the capacity to spend a single dime unless OMB signs off on it.”

Listen to Vilsack’s remarks here:

USDA Announces Renewable Energy Investments (14:55)

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Billion for Biofuels in Build Back Better Bill

Cindy Zimmerman

The initial draft of the U.S. House Build Back Better Act includes a billion dollars for biofuels infrastructure to support expanded availability and use of renewable fuels, according to Rep. Cindy Axne (D-IA) who worked to secure the funding.

“This is a great day for our rural communities, our agricultural economy, our planet, and for hundreds of thousands of Americans whose jobs will be supported by the investments I’ve helped secure in the Build Back Better Act,” said Rep. Axne. “Make no mistake, this was no easy fight. For months, I have been helping members of the administration, the Senate, and my own colleagues in the House understand the key advantages of biofuels – from the fact that it’s been proven to be more than twice as clean as fossil fuels to how much it can help the economies of states like Iowa. But I wouldn’t let up, because it was clear from other infrastructure negotiations that this was not as much of a priority for others in Washington.

“While I will still withhold my final decision on this package until I see the full bill, seeing these investments included will be a critical part of my choice,” Rep. Axne added.

House committees are working on a draft of the comprehensive legislative package ranging from infrastructure to health care, education, and climate. The $1 billion in funding would be for the U.S. Department of Agriculture to provide grants over the next eight years to expand biofuel pump infrastructure, upgrade existing tanks and pumps, and increase usage of higher blends of ethanol and biodiesel.

That investment is double the amount originally proposed in the Renewable Fuels Infrastructure Investment and Market Expansion Act, introduced by Axne in March.

Rep. Axne was one of a number of Democrat members of the House and Senate who sent a letter last week to Senate Majority Leader Chuck Schumer (D-NY) and Speaker of the House Nancy Pelosi (D-CA) urging them to include support for renewable fuels in the reconciliation package.

“Providing additional market access for higher blends of low carbon fuels in the budget reconciliation process will create jobs in rural communities, lower the price of fuel for consumers at the pump, reduce our dependence on fossil fuels, and, most importantly, decrease carbon emissions,” the legislators wrote.

In addition to Axne, the letter was signed by U.S. Senators Amy Klobuchar (D-MN), Tammy Duckworth (D-IL), Tammy Baldwin (D-WI), Tina Smith (D-MN), and Dick Durbin (D-IL) and Representatives Angie Craig (D-MN), Cheri Bustos (D-IL), and Mark Pocan (D-WI).

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State Corn Checkoffs Helping Build E85 in California

Cindy Zimmerman

Corn growers in Missouri, Kansas, and Nebraska are helping to build E85 infrastructure in the top U.S. market for ethanol.

The corn checkoff programs in the three states are leveraging resources to provide California fuel retailers up to $1.25 million over the next year to increase availability of E85 (85% ethanol). Fuel will be supplied by Pearson Fuels, the largest E85 distributor in California with nearly 250 retail stations located throughout the state.

Growers from the three corn checkoff organizations met with representatives from Pearson Fuels in San Diego in July to discuss potential opportunities to grow E85 demand. California is by far the strongest E85 market in the country, accounting for more than 40 million gallons in 2020, and is on track to reach 50 million gallons in 2021.

Jay Schutte, Missouri Corn Merchandising Council chairman and corn grower from Benton City, took part in discussions in San Diego and was impressed with the potential expanded partnership. “Our infrastructure grant dollars, teamed with Pearson Fuels’ marketing and local expertise, will allow us to increase ethanol sales faster in California compared to anywhere else in the country.”

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