EPA expands list of fuels eligible for federal incentives

Source: Amanda Peterka, E&E reporter • Posted: Tuesday, February 26, 2013

U.S. EPA on Friday released a final agency action that will allow several types of advanced biofuels to count for credit under the renewable fuel standard.

In the rule, which will be published shortly in the Federal Register, EPA has determined that biofuels made from camelina and energy cane provide enough greenhouse gas reductions to count for credit under the standard, which sets yearly targets for traditional ethanol and advanced biofuel production.

EPA has also determined that cellulosic gasoline — a drop-in fuel made from plant-based materials — can qualify for credits. The finding will benefit KiOR Inc., one of the first companies in the United States to open a commercial-scale cellulosic biofuel plant, which is converting biomass into gasoline through a catalytic process.

“Substantial investment has been made to commercialize these new feedstocks, and the cellulosic biofuel industry in the United States continues to make significant advances in its progress towards large-scale production,” the agency wrote in a draft Federal Register notice. “Approval of these new feedstocks will help further the congressional intent to expand the volumes of cellulosic and advanced biofuels.”

In order to qualify as an advanced biofuel or biodiesel, a fuel must demonstrate at least a 50 percent reduction in greenhouse gas emissions compared to petroleum-based fuel. Cellulosic biofuel, a subset of advanced fuels, has a higher bar of 60 percent.

The rule is “very significant” for the biofuels industry, said Michael McAdams, president of the Advanced Biofuels Association.

“We’re delighted to see EPA complete this rule,” he said. “This is a big deal for our members. The new rule is going to help qualify gallons already being produced and will help grow this industry over time. This rule was absolutely crucial.”

Under the rule, the definition of renewable diesel also will be expanded to include jet fuel, a determination that is expected to help expand the market for aviation biofuel producers.

EPA, however, neglected to take action on opening the renewable fuel standard to two crops, Arundo donax and napiergrass, that are invasive in some parts of the country. Conservation groups have raised concerns about the plant species since last year when the agency first proposed adding them as new feedstocks, warning that they could spread out of control (Greenwire, Oct. 23, 2012).

“We continue to consider the issues concerning these proposals, and will make a final decision on them at a later time,” EPA wrote Friday.

In the final rule, EPA noted that while both camelina, an oilseed crop used in biodiesel production, and energy cane, a type of sugar cane used in cellulosic biofuel, are not considered native species, neither has been shown to be invasive.

Camelina has especially excited aviation fuel producers on the West Coast, and companies have been waiting for its approval to help spur the market. While camelina has been used in Europe for food, medicine and lamp oil, its use has so far been slow to take off in the United States.

According to EPA, camelina is being cultivated on 50,000 acres of land in the United States, mostly in Montana, Washington and the Dakotas. The agency estimates that about 100 million gallons of camelina-derived biofuel could be produced in the United States without direct land-use impacts.