Biofuel policy uncertainties leave biotech industry waiting for stability
FARGO, N.D. – Ag technology promoters are pedaling hard for biofuels-friendly policies in Washington, D.C., to make life livable for cash-strapped farmers supplying markets that didn’t exist 30 years ago.
Erick Lutt, director of industrial and environmental policy for Biotechnology Innovation Organization, speaking at the 2018 Bio Industry Summit on the North Dakota State University campus in Fargo on May 15, said biofuels promoters are working to monitor and address mixed messages from the administration.
He stressed the need for “stable policy to help continue to drive investment and advance in cellulosic biofuel technologies and in other technologies like bio-based products and renewable chemicals.”
BIO, the “world’s largest biotech trade organization,” wants to make sure the Renewable Fuel Standard, a national law enacted in 2005, is implemented properly to “drive production of those biofuel gallons,” Lutt said. With the farm bill on the floor of the House this week and the Senate Agriculture Committee working on its version, BIO and allies are working to make sure that the energy title are continuing to help drive investment in the technologies and providing the loan guarantees that have enabled some of these “first-of-a-kind technologies to develop.”
It’s been a challenge to sort rhetoric from the Trump administration and Congress, Lutt acknowledged.
There has been discussion of caps on RIN prices. RIN stands for Renewable Identification Numbers — ۳۸-digit numbers assigned to every batch of commercially-made biofuels. Petroleum-based fuels must be blended with certain renewable fuels such as ethanol, but companies that don’t blend to the 10 percent ethanol standard can purchase RINs that others accumulate from selling fuel that contains greater amounts of ethanol, including the 85 percent ethanol (E85) blend.
Lutt said there also is the issue of attaching RINs to exported ethanol gallons. BIO is trying to help the industry understand what policies might actually be moved forward and how quickly they might come to bear.
Another issue is the issuance of “small refinery waivers” — exceptions to the Renewable Fuel Standard for small refineries producing up to 75,000 barrels of fuel per day. In April, Chevron Corp and Exxon Mobil asked the Environmental Protection Agency for exemptions to the RFS requirements that had been granted to the small companies. The EPA has granted more hardship waivers under the Trump administration than in the past.
The issue has already been impact on RIN prices, Lutt said, essentially taking biofuels out of some markets. Investors have to determine whether to put money into developing new advanced or cellulosic biofuel plants.
“The RIN for export concept is concerning because of the effect it would have on lowering RIN prices even further,” Lutt said. “I think think there’s a lot of concern about the trade issues that could create – a lot of complications going forward.”
A lot of time-consuming federal rule-making has to happen before that becomes a reality, he said.
Lutt said the biofuels industry is optimistic because of its “many great champions” in Congress, mentioning specifically Sens. Amy KIobuchar, D-Minn., and Heidi Heitkamp, D-N.D.
Lutt said the Trump administration is attempting to strike a balance between refinery interests and the ethanol producers. It’s important for “the agricultural sector and farmers to remind the administration of the great amount of support they got from the sector the last go-round to drive a strong RFS forward.”