Industry grows despite challenges — report
Source: Amanda Peterka, E&E reporter • Posted: Wednesday, January 7, 2015
The report comes as U.S. EPA has yet to make a decision about where to set the nation’s biofuel blending mandates for 2014. In November, the agency announced it was punting a decision on a controversial proposal to lower the targets (Greenwire, Nov. 21).
“There have been some significant challenges to commercializing advanced biofuels in the United States, and 2014 has proven to be one of the most difficult regulatory periods,” the report said. “The companies that continue to weather these challenges have developed more resilient business models and backup plans as a result.”
The report tracks projects that are expected to achieve at least a 50 percent reduction in greenhouse gas emissions compared with a petroleum baseline, the threshold set by the renewable fuel standard for a fuel to qualify as an advanced biofuel. According to E2, there are 165 advanced biofuels facilities either planned, under construction or operating in the country.
Low-end estimates include projects that have shown demonstrated progress toward completion, while on the high-end, estimates assume all active companies will complete projects.
For all advanced biofuels except for biodiesel, E2 tracked capacity through 2017 — not actual production values, which are often below capacity. For biodiesel, which E2 projects will remain the dominant advanced biofuel, E2 estimated anticipated production.
In all, private investors have pumped nearly $4 billion into the advanced biofuels industry since 2007, the year Congress passed the renewable fuel standard into law, according to E2. In that same time period, producers have netted more than $848 million in grants.
Despite the predicted growth, the industry remains far below the targets Congress wrote into the 2007 renewable fuel standard, which called for 9 billion gallons of advanced biofuels in 2017. Investors have also generally backed off projects since the third quarter of 2013, when EPA first released its proposal to use its authority to lower the blending targets, E2 said.
Delays in ramping up California’s low carbon fuel standard due to court action have also hampered the industry, E2 said.
“A number of promising plants have been delayed or idled because of difficulties in production or financing within this new industry,” the report said.