Big square baler harvesting wheat straw for production of cellulosic ethanol

Big square baler harvesting wheat straw for production of cellulosic ethanol

The Environmental Protection Agency released its 2012 Renewable Fuel Standards on December 28, a month after they were due and with a drastically lower target for the amount of ethanol derived from non-corn sources than Congress originally called for four years ago.

The new renewable fuel standards anticipate the production of 8.65 million gallons of cellulosic ethanol to be blended with other, petroleum-based transportation fuel in 2012. Cellulosic ethanol is derived from inedible plant matter such as switchgrass, wood chips and wheat straw, producing at least 60 percent less greenhouse case emissions than petroleum-based fuels.

But while the 2012 standards may sound like they call for a significant amount of cellulosic ethanol production, at 10.45 million ethanol equivalent volume, it is nowhere close to the 500 million ethanol-equivalent gallons of cellulosic ethanol outlined for 2012 by Congress in the Energy Independence and Security Act of 2007.

“We are indeed projecting the volume of cellulosic biofuel production for 2012 at significantly below the statutory applicable volume of 500 million gallons,” the EPA comes right out and admits in its full report on the standards.

Congress sought to have 3 percent of the nation’s total renewable fuels come from cellulosic ethanol in 2012, but now the EPA says the industry will only be able to produce enough over the course of the year to account for 0.006 percent.

Corn Ethanol Pump

Corn Ethanol Pump

The move was scarcely a surprise given that the EPA has revised its projections for cellulosic ethanol downward significantly every year for the past three years, as the advocacy organization the Environmental Working Group pointed out in a blog post blasting the decision.

“As the hope for a future of truly sustainable biofuels fades, King Corn has a firm grip on the US biofuel throne,” wrote the Environmental Working Group’s Sheila Karpf.

Indeed, Congress felt comfortable enough with the state of the corn-based ethanol industry to adjourn for the year without renewing a 45-cent-per-gallon tax credit on corn-based ethanol production.

Meanwhile, the EPA blames the cellulosic ethanol shortcoming in 2012 on “individual producers’ production plans,” and includes in its assessment “all potential production sources by company and facility…sources that were still in the planning stages, those that were under construction, and those that are already producing some volume of cellulosic ethanol, cellulosic diesel, or some other type of cellulosic biofuel.”

To be fair, the EPA’s assessment only found six total sources of domestic cellulosic biofuel production in the U.S. The most productive of them, KiOR in Columbus, Mississippi, is anticipated to produce 4.8 million gallons of ethanol-equivalent cellulosic gasoline and diesel in 2012, accounting for nearly half of the EPA’s total.

Biofuel crops (photo: Texas A&M University biofuels research alliance)

Biofuel crops (photo: Texas A&M University biofuels research alliance)

KiOR in February sought a $1 billion loan guarantee from the Department of Energy for a new facility under the same program that backed Solyndra, but withdrew its application several months later, saying it would be able to find funding from the private sector in 2012.

Still, the EPA patted itself on the back for coming up with a way to make up the difference of 490 million gallons less in cellulosic ethanol by substituting other “advanced biofuels” — all other renewable fuels not produced from corn, including biomass-based diesel and sugarcane ethanol.

“We continue to believe that there will likely be sufficient volumes of advanced biofuels to meet the need for 490 million ethanol-equivalent gallons,” the EPA stated in its report.

However, the EPA also admits that a majority of this difference will likely be made up by imported sugarcane ethanol from Brazil, totaling 2 billion gallons of advanced biofuels in 2012, the same amount called for by Congress in 2007.

Big square baler harvesting wheat straw for production of cellulosic ethanol

Big square baler harvesting wheat straw for production of cellulosic ethanol

The overall Renewable Fuel Standards for 2012 were originally due on November 30 but delayed by nearly a month, raising the ire of industry organization the Renewable Fuels Association (RFA), but the RFA responded to Wednesday’s release of the standards semi-favorably.

“EPA has not provided us a reason for the delay but that is water under the bridge,” said Matt Hardwig, RFA’s communications director. “The volumes are now final and the industry is pressing forward to develop the technologies and production volumes to satisfy all the RFS requirements with domestic renewable fuel production.”

“We will continue to work with EPA to maintain a strong and robust RFS will also looking to eliminate the incentives that right now give preference to costly imported ethanol from brazil while the US in turn exports ethanol to Brazil,” Hardwig added.

And the 2012 standards are an improvement by some measures, as the the Des Moines Register points out: “The EPA’s 8.25 million gallon target for non-corn biofuels for 2012 is actually higher than the 6.9 million gallon estimate it put out last April. The April figure, which confirmed the awareness of how slow non-corn biofuels have been to development, triggered a growing debate about the biofuels mandate.”

But “debate” may be too kind a term to describe the way the EPA, Congress and oil companies have characterized the struggling cellulosic ethanol market.

“I believe Congress shouldn’t be in the business of picking winners and losers when it comes to the use of emerging technologies,” said Sen. Tom Udall (D-NM), in a statement released in August when he introduced new legislation to amend the Renewable Fuel Standards to remove the cellulosic ethanol requirement entirely.

“Our legislation is one half of the parity question,” Udall added. “Cellulosic ethanol also receives a tax credit that algae biofuel does not currently qualify for and there are similar efforts to remedy that situation in Congress.”

Udall’s bill currently is sitting in committee. But as he pointed out, cellulosic ethanol manufacturers in the U.S. are eligible for a $1.01 per gallon tax credit.

Meanwhile, big oil is even more upset with the standards.

Gas pump

Gas pump

“The [EPA’s] cellulosic number is still conjecture-based fantasy,” Stephen Brown, VP for government affairs for refiner Tesoro Corp. told The Wall Street Journal on Tuesday.

“Once again, EPA has acted unwisely to make a bad law worse with regulations not based on reality and science,” said Charles T. Drevna, president of the National Petrochemical & Refiners Association, in a statement. “Once again, refiners are being ordered to use a substance that no one is producing in commercial quantities - cellulosic ethanol - and are being required to pay millions of dollars for failing to use this non-existent substance. This makes no sense.”

If they can’t blend enough cellulosic ethanol into their overall fuel portfolios to meet the minimum standards required by the EPA, refining companies will have to purchase offset credits from the EPA, The Wall Street Journal reported.

The Renewable Fuel Standards under the Energy Independence and Security Act of 2007 mandate that U.S. refineries and importing companies use a steadily increasing minimum percentage of renewable fuel in their transportation fuel every year beginning in 2006 until the country as a whole hits 36 billion gallons of renewable fuel by 2022, 16 billion gallons of which is expected to come from non-corn based ethanol. But based on the EPA’s continual lowering of the standards every successive year, it is unlikely that this goal will be realized in time.

Correction: This article originally incorrectly identified the location KiOR’s facility as Columbus, Ohio, when in fact the facility is located in Columbus, Mississippi. The article also originally misidentified KiOR as a cellulosic ethanol producer, when, in fact, it produces cellulosic biofuel. The errors have since been corrected in copy and we apologize for them.

This article, written by Carl Franzen, was originally published on TalkingPointsMemo, an editorial partner of GreenCarReports.


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