Senate Republicans offer bill targeting cellulosic mandates 

Source: Amanda Peterka, E&E reporter • Posted: Thursday, April 16, 2015

A pair of Senate Republicans yesterday reintroduced legislation aimed at U.S. EPA’s requirements for refiners to blend cellulosic biofuel into petroleum fuel.

The legislation, by Sen. Jeff Flake (R-Ariz.) and co-sponsored by Sen. Mike Crapo (R-Idaho), would compel EPA to base its annual mandate for cellulosic biofuel on actual production. The lawmakers introduced a version of the bill last Congress and have argued that it’s necessary to reflect realities in the market.

Cellulosic biofuel is an advanced biofuel made from non-food plant inputs such as agricultural residues, perennial grasses and municipal solid waste. EPA is required to set annual mandates for refiners under the renewable fuel standard.

The amount of cellulosic biofuel reported by EPA through the RFS program has ticked upward in the last year, largely thanks to an EPA rule last year that expanded the RFS category to new types of fuel (E&ENews PM, July 2, 2014). Two companies — POET-DSM Advanced Biofuels LLC and Abengoa Bioenergy — last year also opened the nation’s first large-scale cellulosic ethanol plants.

According to EPA, producers this year have so far generated more than 12 million renewable fuel credits for cellulosic biofuel. Last year, there were more than 33 million credits generated.

That’s still far below the amount of cellulosic biofuel that Congress anticipated when it wrote the RFS in 2007, and critics such as Flake have argued that EPA is punishing refiners by making them purchase waivers for fuel that does not exist.

In a background sheet provided to Greenwire, Flake’s office said that the bill, S. 934, would “ensure that the cellulosic biofuel mandate reflects actual industry production rather than unrealistic bureaucratic prediction.” The bill would also “stop the EPA from forcing U.S. energy producers to choose between buying meaningless compliance credits or paying the steep federal fines,” the backgrounder says.

The bill last Congress was referred to the Senate Environment and Public Works Committee, where it did not receive a vote.

Brooke Coleman, executive director for the Advanced Ethanol Council, today pushed back against the reintroduction of the legislation. AEC represents several cellulosic biofuel companies.

“The RFS was not intended to reflect a broken, non-competitive motor fuel marketplace, it was intended to push oil companies to offer new fuels and choices at the pump. It’s a proactive, not a reactive, program,” Coleman said. “If the RFS merely reacts to the oil industry’s historic refusal to buy innovative, new fuels, then it ceases to be an RFS. That’s what Flake’s proposal really is.”