Biofuels groups weigh high court E15 appeal

Biofuels groups are considering whether to file an appeal to the Supreme Court to overturn the ban on summertime sales of 15 percent ethanol fuel (E15) reinstated by a ruling of the U.S. Court of Appeals for the District of Columbia Circuit, after the lower court issued its mandate scrapping the Trump EPA’s approval of summer E15 sales.

The D.C. Circuit issued its mandate Sept. 17 in American Fuel and Petrochemical Manufacturers, et al. v. EPA, et al., after refusing biofuels groups’ petitions for panel rehearing or rehearing by the whole court sitting en banc.

Geoff Cooper, president and CEO of the Renewable Fuels Association (RFA), tells Inside EPA that, “While no decisions have been made yet, RFA continues to explore all potential avenues for further action to restore year-round E15, including the possibility of Supreme Court review. We are also looking at the potential for other technical and regulatory remedies that could resolve this barrier before next summer.”

The D.C. Circuit ruling will not affect E15 sales this summer, because special restrictions on fuel vapor pressure ended Sept. 15. But if allowed to stand, the ruling will block E15 sales from June 1 until Sept. 15 each year, when tougher vapor pressure restrictions apply.

The court found that contrary to the Trump EPA’s view, an existing Clean Air Act waiver from summertime vapor pressure restrictions for E10 fuel does not extend to E15. Currently, E10 is the national standard blend, but biofuels groups have long sought year-round E15 sales as a means to expand the market for ethanol.

Biofuels groups have 90 days from the Sept. 9 denial of rehearing by the D.C. Circuit to file a petition for a writ of certiorari.

Blowers, mowers and more: American yards quietly go electric

For Jared Anderman, of Croton-on-Hudson, New York, switching from gasoline-powered tools to electric ones for lawn care was a no-brainer.

“I’m concerned about climate change and wanted tools that are more eco-friendly, and also quieter. I like listening to music when I do yardwork and this way I can enjoy music or a podcast while I work,” he said. “I could never do that with gas-powered equipment.”

The biggest advantage of all, he says, is maintenance. “Gas mowers are a pain. With electric tools, they boot right up and there’s really no maintenance at all. It’s just about keeping the batteries charged.”

First, he bought an electric lawnmower. Then an electric string trimmer, hedge trimmer and leaf blower. “I don’t have an electric snowblower, yet. But when I do replace the gas snowblower, it’ll be with an electric one,” he says.

There’s a quiet transformation going on in yards across the country. Longstanding complaints about the roar and fumes from gas-powered leaf blowers, mowers and other equipment have grown even louder as more people work from home because of the pandemic.

Meanwhile, the quality of zero- to low-emissions electric landscaping equipment has improved markedly, with battery packs that last longer.

“Batteries have changed a lot in the past year alone, and we are there in terms of technology. Now it’s just a matter of getting the word out to professionals and consumers,” says Kurt Morrell, associate vice president for horticulture operations at the New York Botanical Garden.

“Last year we were 90 percent electric on hedge trimmers and this year it’s 100 percent. My guys won’t even touch a gas hedge trimmer anymore,” says Morrell, who oversees the trimming of the garden’s 4,850 linear feet of hedges.

There are even autonomous lawnmowers akin to the Roomba vacuum cleaner.

“They are really taking off, and in the next four or five years you’ll see more robotic mowers in the private sector,” says Morrell.

Morrell, who also teaches aspiring landscaping professionals, says that while electric trimmers and mowers are now as good or better than gas-guzzling versions, cordless electric leaf blowers are still a challenge “because they require a lot of velocity and power, and the weight of the battery at this point is a lot heavier than gas.”

But the technology is evolving quickly, he says. “When I teach my landscaping management students, who will go on to manage large landscapes, I know they will be using electric equipment.”

The electric tools, and some less-polluting gas options, are just part of a rethinking of many lawn-care practices and their effect on the environment.

Many gardeners and landscapers are moving away from “a hyper-managed standard of blow drying leaves,” for instance, in favor of “just letting leaves be leaves, with some of them staying on the ground,” says Daniel Mabe, founder of the American Green Zone Alliance (AGZA), which offers homes, businesses and organizations across the country a certification for low carbon-footprint landscaping.

Letting more leaves, plant stalks and other garden debris cover garden beds during the winter helps the soil, and insects and other wildlife, experts say.

Where power tools are needed, the shift from gas to electric is not unlike the trend toward electric cars.

According to the California Air Resources Board, a department within the California Environmental Protection Agency, operating a gas leaf blower for an hour can create as much smog-forming pollution as driving a Toyota Camry 1,100 miles.

The battery-powered lawn equipment sector is growing at a rate three times faster than gas, according to the Freedonia Group, a division of MarketResearch.com.

“In terms of residential adoption of electric landscaping equipment, at least here in California, it’s already about 50 percent,” Mabe says.

He sees more resistance to electric equipment among professional landscaping companies than among residential consumers. But he estimates there are now at least 200 “all-electric” landscaping companies. Many of them make use of robotic technology, programming and maintaining the lawn equivalent of the Roomba.

Andrew Bray, vice president of government relations for the Fairfax, Virginia-based, National Association of Professional Landscapers, says, “The transition to electric is inevitable, and most landscapers are trying out this equipment all the time. But while the technology is already there for homeowners — and I myself use electric equipment at home — the technology isn’t there yet for most of the commercial sector.”

“With leaf blowers, for example, they don’t yet have the battery power needed for commercial use,” he says.

And he said there are cost and infrastructure hurdles for professional landscapers looking to switch from gas to electric.

“Since battery packs are not interchangeable between brands of tools, you’d have to retrofit your whole shop so that everything is the same brand. You’d also probably have to upgrade the wattage of the electrical system in your shop, since an average crew would need about 36 batteries,” he says.

Still, electric’s momentum is growing. Stanley Black & Decker, a leading maker of outdoor products, estimates that the volume of electric-powered landscaping equipment that North American manufacturers shipped went from 9 million units in 2015 to over 16 million last year, an over 75 percent increase in the past five years.

“We continue to innovate in cordless (electric) products focused on delivering high performance while having lower noise and no emissions in use,” says John Wyatt, senior vice president of Stanley Outdoor.

House Democrats Float Sweeping Tax Breaks For Clean Power, EVs

House Democrats are floating a sweeping, $273 billion clean energy tax package for consideration in the party’s budget “reconciliation” bill, with lawmakers seeking to extend credits for a wide range of low-carbon power and electric vehicle (EV) technologies while also including a controversial preference for projects linked to unions.

The House Ways & Means Committee released the clean energy tax proposal late Sept. 10, ahead of a planned Sept. 14 markup.

The tax-writing panel has already been marking up various other aspects of the sprawling reconciliation bill, given its jurisdiction on multiple other issues including social spending programs and tax increases to fund the legislation.

The clean energy proposal, dubbed Subtitle G of the committee’s reconciliation measure, would set up a two-tiered structure for clean energy tax credits, including extended credits for wind and solar power, new credits for transmission projects, carbon capture projects and others.

Specifically, a section-by-section summary says the plan would offer a “base” tax credit for such projects, while also offering a “bonus rate” for projects that pay so-called “prevailing wages” and use a minimum amount of apprentices. The plan also requires contractors to use iron, steel and other products deemed “manufactured in the United States.”

Similarly, the plan would offer up to $12,500 in consumer tax breaks for an EV purchase, up from a current limit of $7,500. Nearly all of the difference is tied to vehicles made at unionized manufacturing plants, a provision that is already drawing opposition from foreign automakers such as Toyota and Honda.

The low-carbon tax breaks are considered a major cornerstone of the climate-related elements of the reconciliation package, with top Democrats suggesting they would complement a proposed $150 billion incentive program to encourage utilities to deploy more clean electricity.

While lawmakers are scrambling to craft legislative text for the budget measure, some closely watched moderate Democrats are pressing party leaders to slow consideration of the package and scale down its price tag — advocacy that might ultimately influence the fate of the climate proposals.

A Sept. 13 analysis from the research firm ClearView Energy Partners explains that the Ways & Means proposal extends the eligibility timeframe for a host of credits, though its “base” credit rate is often much lower than the full rate of current credits.

Project developers “would need to pay prevailing wages and hire apprentices to receive the original 30% as a bonus credit,” the analysis says, citing the solar tax credits as an example.

The plan also would convert many of the credits to “direct pay” options, allowing projects to forego the use of tax equity financing that critics argue is overly complex and deflates the value of the credits.

Renewable Energy, EV Credits

Overall, the plan would extend wind and solar power credits through 2033, while allowing stand-alone energy storage projects to qualify, replacing current requirements that storage be paired with renewable generation.

The plan also would create a new tax credit for transmission projects considered key to integrating high levels of renewables; extend the eligibility window by five years, until 2031, for carbon capture and storage projects to claim existing tax breaks, while also easing qualifying thresholds; create a new, zero emission credit program for existing nuclear plants; and extend or create new credits for low-carbon fuels including biodiesel, sustainable aviation fuel (SAF) and “clean” hydrogen.

Further, the plan would revamp an Obama-era tax credit, known as 48C, for advanced manufacturing including facilities that retool operations for a low-carbon energy shift. This proposal — jettisoned at the 11th hour from the Senate-passed bipartisan infrastructure deal — has been a priority of Senate energy committee Chairman Joe Manchin (D-WV).

Regarding EVs, the Ways & Means proposal aligns with EV supporters’ call to remove existing per-manufacturer caps on tax credits that are currently restricting credit availability to EVs made by General Motors and Tesla.

Under the committee plan, the per-vehicle credit has a “base” of $4,000, along with a $3,500 boost for vehicles with a battery size meeting certain thresholds.

An additional $4,500 would be available for vehicles produced at U.S. plants operating under union agreements, while $500 would be added to the credit if at least half of the vehicle is made from domestic content.

The ClearView analysis says the plan “appears to nod, if perhaps only slightly,” to a GOP-sponsored amendment that the Senate added to Democrats’ fiscal year 2022 budget resolution calling for Congress to means-test the EV credits.

That proposal, floated by Sen. Deb Fischer (R-NE) and joined by three moderate Democrats, called for restricting the credit to taxpayers with incomes below $100,000, while also limiting the credit to vehicles that cost less than $40,000.

The Ways & Means proposal would begin to phase down credits for individual taxpayers with incomes above $400,000, while also capping the retail prices of vehicles that can receive the credit. Specifically, prices cannot exceed $74,000 for a pickup, $69,000 for an SUV, $64,000 for a van, and $55,000 for a sedan.

Auto groups recently pressed top Democrats to craft tax language that would make EV credits apply as broadly as possible to vehicles and consumers.

Also, in line with recent advocacy from environmentalists and other EV backers, the House Democrats are floating a newly created credit for used EVs, capped at $2,500 or 30 percent of the cost of the vehicle.

However, the proposed credit increase for union-made autos is already sparking heartburn from foreign automakers, which typically do not have union agreements at their U.S. plants.

For example, Honda said in a statement to Reuters that the House plan is “unfair” because it “discriminates among EVs made by hard-working American auto workers based simply on whether they belong to a union.”

The news outlet says the EV-related credits are estimated to cost roughly $34 billion over 10 years. — Lee Logan (llogan@iwpnews.com)

FEATURE: US refiners delve deeper into SAF production on policy support hopes

Some US refiners are considering adding sustainable aviation fuel to their renewable diesel production plans, spurred by higher demand from airlines seeking lower carbon footprints and the likelihood of increased policy support, some analysts said.

“Jet and diesel are going to typically be priced very similarly, so to entice RD producers to produce some volume of SAF, the government will need make the subsidies for SAF production higher than those for RD,” said Robert Auers, senior analyst at energy consultant Turner, Mason & Company.

The Biden Administration proposed Sept. 9 a $1.50-$2.00/gal federal tax credit for SAF, followed by release of an excerpt from the Build Back Better Act by the House Ways and Means committee on Sept. 10 proposing a $1.25/gal SAF tax credit.

Some refiners have expressed hesitation about adding SAF, concerned about lower margins and returns due to higher costs for additional equipment, lower value renewable credits, and lower prices for SAF.

But more incentives could make it easier to justify increased costs.

“In order to invest additional money to add SAF production capability, RD producers will have to feel confident that SAF will have more subsidies than RD over the long term,” Auers added.

Increased feedstock costs weigh on prices

As more new renewable fuels projects are announced, feedstock supply tightens and RD and SAF producers seek to lock in supply.

Earlier, Chevron inked a supply agreement with agricultural giant Bunge, to supply Chevron with 30% or about 7,000 tons of feedstock today, expanding to 14,000 tons in 2024 to meet growing output.

While lower carbon intensity feedstocks like beef tallow and used cooking oil are more valuable, soybean oil is most in demand due to availability, despite a drop off in production.

“US soybean oil production for 2021-22 was reduced by 290 million lb in the September World Agricultural Supply and Demand Estimates report to 25.42 billion lb due to lower soybean crush,” according to S&P Platts Analytics biofuel analyst Nabil Kapasi.

Kapasi noted imports fell by 50 million lb to 450 million lb, reducing supply further and supporting higher prices.

So far in Q3 2021, soybean oil prices are averaging 65.04 cents/lb, compared with the 52.13 cents/lb in Q2, according to Platts assessments.

While prices for renewable feedstocks declined recently, the dip is expected to be short-lived as storm-downed plants restart.

“We think downtime at two RD plants in Louisiana in the wake of Hurricane Ida was a likely contributor,” wrote JP Morgan analyst Thomas Palmer in an Sept. 14 research note.

RIN parity

RINs are credits bought by refiners and other transportation fuel suppliers under the Environmental Protection Agency’s Renewable Fuel Standard to meet renewable volume obligations, or RVO, that aren’t met by through blending renewables into gasoline and diesel.

SAF currently generates 1.6 D4 biomass diesel RINs, compared with RD’s 1.7 D4 RINs, giving RD the advantage.

So far in Q3 2021, RD holds a 16.55 cent/RIN premium over SAF, up from the 14.02 cent/RIN premium in Q2, Platts price assessment data shows.

“If SAF can qualify for the same RIN generation as RD and same LCFS benefit, the proposed extra $0.50/gal for the SAF blenders’ tax credit ($1.50 for SAF for $1 for RD) should be sufficient to justify investment at most facilities to produce some volume of SAF,” he said.

Under its Low Carbon Fuel Standard or LCSF, California gives credits for both RD and SAF, then layered on top of federal blending and RINs credits.

Auers said the SAF decision is based on evaluating the economics to produce SAF versus 100% RD, adding that most RD projects are being built with the ability to eventually produce some SAF easily, although some extra investment will still be needed.

“Most of the facilities, even with new investment, would not be able to produce 100% renewable jet easily, but could likely get to a about a 50/50 mix of SAF/RD with a fairly low amount of investment,” Auers added, noting once the investment made refiners would be able to make “operational changes to vary this ratio as economics dictate.

Chevron is co-processing 2,000 b/d of biofeedstock at its El Segundo, California, refinery, producing its first batch of SAF last week, according to Mark Nelson, head of downstream speaking on Chevron’s Sept. 14 Energy Transition Spotlight webcast.

Chevron expects to produce 100,000 b/d of RD and SAF by 2030, which includes supplying all Chevron’s US jet fuel customers with 5% SAF blend.

“While policy support has not yet stimulated the SAF supply chain, these activities prepare us for the future,” Nelson said.

While Chevron has collaborations underway with Delta Airlines and Google to track SAF emission benefits, “the company will likely wait for more policy clarity before making significant investment in SAF,” JP Morgan analyst Phil Gresh said in a Sept. 14 note.

Lucid Motors beats Tesla in range, going 520 miles on a charge, the E.P.A. says.

Peter Rawlinson, the chief executive of Lucid Motors, with a Lucid Air.
Credit…Andrew Kelly/Reuters

Lucid Motors, a start-up automaker, has unseated Tesla, the dominant maker of electric cars, as the producer of the electric vehicle that can travel farthest on a single charge.

Lucid’s top-of-the-line Air Dream Edition Range can drive 520 miles on a full battery, the Environmental Protection Agency said on Thursday, beating by more than 100 miles the Tesla Model S Long Range, previously the car that could go the furthest on a charge.

How far electric cars can travel before they have to be plugged in — a metric known as their range — is important because the infrastructure for charging the vehicles is in its infancy, and filling up a battery can take hours depending on the car and charger.

President Biden and other world leaders want people to switch to electric vehicles to fight climate change. But that is unlikely to happen until the auto industry eases the fears that drivers will be left stranded with no plug in sight or will have to wait hours for their cars to refuel.

Until there are more fast-charging stations, automakers are trying to come up with electric cars that can go longer distances on a full battery. Tesla, which makes about two-thirds of electric vehicles sold in the United States, has long won that contest, producing several cars that can travel more than 300 miles without recharging. Many automakers have struggled to hit that threshold or go much beyond it.

Lucid and its chief executive, Peter Rawlinson, a former Tesla engineer, have said for months that their cars will go further than Teslas because they are more aerodynamic and use smaller, more efficient motors and other components. The E.P.A. provided official confirmation of those claims.

“Crucially, this landmark has been achieved by Lucid’s world-leading in-house E.V. technology, not by simply installing an oversize battery pack,” Mr. Rawlinson said in a statement.

Tesla is expected to soon face much more competition, including from Lucid and from Rivian, another start-up that is expected to begin delivering electric pickup trucks to customers this month. Traditional automakers such as General Motors and Volkswagen are also accelerating their efforts. Ford Motor is planning to sell an electric version of its F-150 pickup truck, the most popular vehicle in the United States, next spring.

But Lucid’s cars will occupy a luxurious niche in the market. The Air Dream Edition starts at $169,000 before federal and state incentives, though the company has said it will eventually offer more affordable versions of the Air, including one that will sell for about $77,000. The company is also working on a sport-utility vehicle.

Future RFS Remains A Mystery As EPA Deals With Immediate Concerns

EPA’s plans for the long-term future of the renewable fuel standard (RFS) remain shrouded in uncertainty, sources say, as the agency strives to meet short-term objectives for the program that will have a significant bearing on its prospects after 2022, when current statutory biofuel blending mandates expire.

The White House Office of Management and Budget (OMB) is now reviewing EPA’s proposals for biofuel blending volumes under the RFS for 2021 and 2022, and possibly a retroactive reduction in volumes for 2020. The 2021 rule is already nine months overdue, and even if it is released in the near future, EPA seems unlikely to be able to take public comment and produce a final version before early 2022.

These pressing questions are diverting attention away from another rulemaking, now known as the “set,” which will define blending mandates after 2022, sources say.

Under the Clean Air Act, once actual production of certain fuels, such as cellulosic ethanol, falls below certain thresholds relative to the goals set by Congress, EPA can lower the statutory levels.

While the agency previously submitted a draft version of such a rule, previously known as a “reset” because the agency planned to complete it before the end of the statutory mandate, to OMB for review, the measure was never released.

Compounding the situation is EPA’s need to formulate a policy with regard to small refiners’ requests for compliance waivers from RFS blending mandates. The Supreme Court over the summer found that refiners can win the economic hardship waivers even if they lacked them in prior years, overturning a U.S. Court of Appeals for the 10th Circuit’s ruling on the issue.

But EPA still supports other aspects of the lower court’s decision that weigh against waiver issuance even as dozens of waiver requests still remain undecided at EPA.

The related short-term questions over annual blending volumes and waivers, combined with uncertainty over biofuels provisions that Congress may approve, militate against EPA staff being able to fully focus on the so-called “set” rule that will govern long-term blending volumes, sources say.

For years, EPA was planning its “reset” rule that would have reduced statutory volumes for advanced and cellulosic biofuels to lower levels than those set by Congress at the outset of the program in 2007. Liquid cellulosic fuel production has fallen far short of expectations, triggering a reset mechanism that requires EPA to reduce the statutory volumes to levels more closely matching production.

An EPA spokesperson did not respond to a request for comment by press time.

Statutory Targets Gone

Under the RFS, advanced biofuels, including biodiesel, must achieve a 50 percent greenhouse gas reduction relative to unblended gasoline, and cellulosic fuels a 60 percent reduction. Conventional corn ethanol, which still satisfies the overwhelming majority of the RFS mandate, must achieve a 20 percent reduction, although biofuels advocates say it in fact achieves reductions far in excess of this.

But EPA never issued the reset rule, and statutory volumes expire in 2023, except for biodiesel, for which the dedicated RFS volume already expired several years ago. EPA has set the biodiesel volumes under its own authority since then.

With all the statutory targets gone, EPA will now have to set volumes on its own authority without resorting to waiver authorities to depart from targets set by Congress.

EPA’s regulatory agenda lists the set rule as due for proposal by a Nov. 30 statutory deadline, but the agenda also indicates it will not likely be proposed until December, and some sources believe later than that. EPA aims to finalize the rule in time for 2023.

Yet little is known publicly about the parameters of that rule, including how many years it will set volumes for, or what volumes EPA intends to set. Some sources say it is possible EPA will bifurcate the rule into two different periods, with volumes set for a limited number of years initially, to be followed by a second period for the longer-term.

“I question how feasible it is now” to meet the Nov. 30 deadline, says one refining sector source, saying it would be “very difficult” for EPA staff to craft a proposal before the blending volumes for 2021 and 2022 are “put to bed.”

In many respects, the post-2022 volumes are contingent on the outcome of current policy choices on volumes and waivers, the source says.

The rule provides an opportunity for various stakeholders to push their preferred positions, however. For example, small refineries will seek to “level the playing field” with their larger competitors by asking for policy changes they have sought for several years now. Smaller “merchant” refiners often lack the capacity to blend their own biofuels like major oil companies do, forcing the merchant refiners to purchase RFS compliance credits at sometimes high prices.

Containing the price of credits, known as renewable identification numbers (RINs), is therefore a priority for smaller refiners, along with setting blending volumes at lower levels. The merchant refiners also favor moving the RFS’ compliance obligation from refiners to fuel blenders, a request EPA has consistently denied.

Legally, “they have a lot of leeway to do a lot of different things,” although under the Clean Air Act EPA must comply with dozens of technical criteria when setting the post-2022 blending volumes, the refining source says.

The American Petroleum Institute (API), which represents several large oil companies that blend their own biofuels, raises the long-term prospect of replacing the RFS entirely.

“The RFS Set rulemaking presents a significant opportunity to improve the RFS program and support our industry’s commitment to solutions that reduce emissions and ensure affordable transportation fuel choices for Americans,” API Vice President of Downstream Policy Ron Chittim tells Inside EPA.

Chittim says, “In the annual rule that’s yet to be released, EPA would best serve the public interest by keeping compliance volumes feasible and maintaining program stability by not exceeding the ethanol blend wall. While API is committed to working with EPA to chart a viable course for the RFS — both in the current years and in the future — ultimately, the best way to accelerate U.S. climate progress is through an economy-wide carbon price policy rather than costly market mandates.” The “blend wall” refers to vehicle and infrastructure constraints that limit the ability of refiners to blend more ethanol into the fuel supply.

Climate Goals

One fuels industry source says that EPA should consider the RFS a tool for meeting its broad climate goals, using the set to enlarge volume for advanced biofuels. “I think it should be a very aggressive, ambitious increase in the advanced mandate,” the source says. The set rule is “an important opportunity for the administration to re-calibrate how they want to achieve” greenhouse gas reductions.

For biofuel producers, the set rule presents the chance to make counterarguments in favor of increased biofuels blending. For example, a source with the National Biodiesel Board (NBB) says the association’s position is that “EPA should provide as much certainty for future years as possible and send a strong signal of support for sustainable growth. Essentially, we would like to see annual increases for as many years as possible into the future.”

A second biofuels industry source stresses the need for regulatory certainty, requiring volumes rules for more than one year at a time, and also says that EPA likely has not decided yet how many years to cover. The source also says that EPA may still propose the set rule before the proposed volumes rules for 2021 and 2022 are finalized.

Other biofuels groups are likely to push for both stability and long-term growth in the RFS blending volumes — although they may not agree on which volumes to expand.

One farm sector source says, “our recommendation on the set rule is that EPA use this proposed rule to maximize the benefits of the RFS through continued growth in renewable fuel blending and take full advantage of the immediate decarbonization biofuels provide. We urge EPA to consider agriculture’s contributions to the success of the RFS, including relying on the most recent assessment for [Department of Energy] Argonne Lab on carbon intensity and [lifecycle analysis].”

Biofuels groups face resistance from beyond the oil sector and its supporters in Congress, as some environmentalists remain skeptical of the climate benefits of corn ethanol in particular, and are worried about its broader environmental impact.

While the RFS will continue after 2022, one environmentalist says that it should be phased out, which is the “only really viable solution” if the United States is to reduce its GHG emissions by the level required. Continuing with RFS mandates only perpetuates the country’s dependence on liquid fuels — and therefore oil — the source says.

Moreover, liquid cellulosic biofuels, with much lower GHG emissions than corn ethanol, have “always been a fantasy,” and have never been produced in meaningful volumes, the source says. The bulk of cellulosic biofuel today is in fact biogas derived from landfill methane and agricultural operations, sources note. — Stuart Parker (sparker@iwpnews.com)

Biodiesel Board Tries to Convince EPA’s Regan of Biofuel’s Benefits

The National Biodiesel Board is trying to make a case with EPA Administrator Michael Regan on the benefits of biodiesel to cutting carbon emissions in transportation fuels and improving health in disadvantaged communities.

The NBB made its second request since May for a meeting with Regan, writing in a letter on Thursday that the biofuel’s benefits match the Biden administration’s goals.

“We believe that our industry’s goals are consistent with your agency’s plans to address carbon and focus on environmental health,” Kurt Kovarik, NBB vice president of federal affairs, said in the letter. “Replacing petroleum with drop-in alternatives like biodiesel and renewable diesel immediately reduces carbon. Additionally, biodiesel and renewable diesel reduce particulate matter and hydrocarbon emissions that contribute to cancer, lung and heart disease rates.”

In May, the NBB released the findings of a study, “Assessment of Health Benefits from Using Biodiesel as a Transportation Fuel.” The study said switching from petroleum to 100% biodiesel in transportation could bring fewer asthma attacks and other lung problems to some disadvantaged communities, lost workdays and premature deaths as well as reductions in cancer risks.

“EPA’s new report highlights an important issue but does not go further to discuss solutions,” Kovarik said in the letter. “We would like an opportunity to show Administrator Regan how biodiesel and renewable diesel can support EPA’s goals to address climate change and environmental justice issues.”

EPA’s report identifies U.S. communities projected to experience the highest effects of climate change, including air quality on asthma rates and premature deaths. It then estimates the likelihood that socially vulnerable populations live in these areas.

According to the NBB, the U.S. biodiesel and renewable diesel industry supports 65,000 jobs and more than $17 billion in economic activity annually. Every 100 million gallons of production supports 3,200 jobs and $780 million in economic opportunity, the group said in a news release. Biodiesel production supports about 13% of the value of each U.S. bushel of soybeans.

Read the NBB letter here: http://kce.informz.net/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @DTNeeley

(c) Copyright 2021 DTN, LLC. All rights reserved.

EPA: 3 new SRE petitions filed, 62 SRE petitions now pending

The U.S. EPA on Sept. 16 published updated small refinery exemption (SRE) data, reporting that there are currently 62 SRE petitions pending under the Renewable Fuel Standard, up from 59 that were pending as of mid-August.

The three new SRE petitions were filed for RFS compliance year 2020. The EPA made no additional changes to the SRE data published in its online data dashboard.

The 62 pending SRE petitions now include one pending for compliance year 2016, one pending for compliance year 2017, three pending for compliance year 2018, 30 pending for compliance year 2019, 26 pending for compliance year 2020, and one pending for compliance year 2021.

Additional data is available on the EPA website.

OMB schedules additional meetings on RFS proposal

The White House Office of Management and Budget has now scheduled 16 meetings with interested parties to discuss a proposed rule to set renewable volume obligations (RVOs) under the Renewable Fuel Standard, up from 12 meetings that had been scheduled as of Sept. 7.

The U.S EPA on Aug. 26 delivered a proposed rule to set RFS RVOs to the OMB. OMB review marks a final step before a proposed rule is released for public comment.

Under RFS statute, the EPA is required to finalize RVOs for a particular compliance year by Nov. 30 of the preceding year. Despite that statutory deadline, the EPA failed to propose or finalize an RVO for compliance year 2021. As such, the proposed rule is expected to address RVOs for both compliance years 2021 and 2022. The EPA, however, has not confirmed which compliance years the proposed rule will address.

“The proposal aims to get the RFS program back on track by setting targets that are forward looking and growth oriented, while addressing challenges stemming from decisions made under the prior Administration,” the EPA said in a statement on Aug. 30. “As we move toward a final rule, EPA will continue to engage with all RFS stakeholders to gather input and understand their concerns so that the final rule can achieve the program’s objectives while responding to the multiple dynamics affecting the program.”

Under Executive Order 12866, the OMB’s Office of Information and Regulatory Affairs meets on regulatory actions with any interested party to discuss issues on a rule under review. To date, 16 E.O. 12866 meetings have been scheduled regarding the proposed RFS rulemaking.

Newly scheduled meetings include two scheduled for Sept. 16, including one with the American Bakers Association and working coalition of the food processing sector trade associations and consumer-facing companies, and a second with BTR Energy. The OMB is also currently scheduled to meet with Citgo Petroleum Corp. on Sept. 23 and Northwest Ohio Building and Construction Trades Council on Oct. 4.

The OMB on Sept. 2 met with National Biodiesel Board. The agency also met with the National Association of Truckstop Operators on Sept. 7, American Fuel and Petrochemical Manufactures on Sept. 8, Renewable Fuels Association on Sept. 8, Center for Biological Diversity on Sept. 9, American Petroleum Institute on Sept. 9, the Renewable Fuels Association on Sept. 10, the Coalition for Renewable Natural Gas on Sept. 13, World Energy on Sept. 13, Growth Energy on Sept. 14, PBF Energy on Sept. 14, the National Corn Growers Association on Sept. 15, and Society of Independent Gasoline Marketers of America on Sept. 15.

Additional information is available on the OMB website.

Ethanol Outlooks Stable, Westhoff Says Export Demand Optimistic

University of Missouri Director and Howard Cowden Professor Patrick Westhoff joined AgriTalk host Chip Flory to share economic insights heading into the fall.

With crops in the Midwest transitioning from their vibrant, summer green to the long-awaited dull, harvest brown, Westhoff weighs in on what to expect in the markets following the crop season.

“Crop receipts for corn, soybeans, any number of other crops and even the livestock side as well is up sharply in 2021, offsetting that drop in payments and the increasing production costs this year,” says Westhoff.

Trade agreements, according to Westhoff, are in part to thank for current markets when comparing numbers from last week to a year ago.

“The number one difference is that we’ve got steadily higher imports from China projected now than they would have sent back then. That is a huge factor in the market. That’s why we’re talking about over $4 corn average prices for the next five years,” says Westhoff.

The ethanol boom seems to be nearing an end, but Westhoff says it shouldn’t be considered phased out just yet.

“We don’t show any big change in overall ethanol consumption in this country in the next decade. Even if electric cars expand, that’s not going to replace the fleet overnight,” says Westhoff. As long as we have continued use of 10% blends in at least some expansion of the higher-level blend markets, we think we could probably sustain something like current levels of domestic consumption for a number of years in the future of export demand, perhaps even a little bit more optimistic.”

Livestock outlooks are promising in Westhoff’s data. While he says decreasing cattle numbers over the next few years will mean a tighter supply-demand balance, pork tells a different story.

“We were surprised by how high hog prices have gone this year. It’s been a combination of strong demand from China, less supplies than we would have anticipated at these kinds of prices. Of course, higher feed costs have all come into play there. Looking forward, if we were to have a little more normal situation of the feed front, and if the growth in import and export demand is not as strong in 2022 as it’s been this past year, we could see some softening of higher prices in 2022,” says Westhoff.

Net farm income this year will reflect previous records, according to the University of Missouri Professor. However, he doesn’t predict they will stay that way.

“We’re looking at an annual number this year that’s almost at the 2013 record. Then falling off to about $100 billion dollars next year. In nominal terms that will leave the average farm income in the projection period a little bit above the recent average. But once you factor in inflation, it’s more comparable to want we’ve spent in the last five to seven years,” says Westhoff.