Biofuels Update

October 4, 2010 09:11 AM

Support for Advanced Biofuels

Iowa Senators Chuck Grassley (R) and Tom Harkin (D) announced earlier this year that the U.S. Department of Agriculture has awarded $1.6 million to the state to promote the development of advanced biofuels as an energy alternative.

The payment was authorized under the Bioenergy Program for Advanced Biofuels in the 2008 farm bill. The program, which Harkin helped to create as the former chairman of the Senate Committee on Agriculture, Nutrition and Forestry, supports producers of advanced biofuels in rural areas. Payments are based on the amount of biofuels produced from renewable biomass other than corn kernel starch.

Eight Iowa biorefineries are dividing the payment. The largest portion, $727,000, is going to Renewable Energy Group in Ralston for production of advanced biofuels through the use of canola oil, soybean oil, other oils and animal fat. About $298,000 is going to Western Iowa
Energy to support production of advanced biofuels from the use of waste vegetable oil, greases and animal fat.

"We worked very hard to include strong investments in clean energy and biofuels in the 2008 farm bill and I am pleased to see these funds being put into action," Harkin said. "In addition to aiding locally owned bio-refineries, these investments have far-reaching benefits for Iowans associated with the biofuels industry such as farmers and equipment manufacturers."
Grassley congratulated the Agriculture Department for working with Iowa biofuel companies to lessen U.S. dependence on foreign oil.

Pros and Cons of RFS2

What is right and what is wrong with the expanded Renewable Fuels Standard (RFS2)? Geoff Cooper, vice president of research and analysis for the Renewable Fuels Association, spoke at the National Ethanol Conference in Phoenix, Ariz., about the rule, which was released earlier this year by the Environmental Protection Agency (EPA).

The good news, Cooper said, is that RFS2 improves upon the rule proposed last year. "In 2009, EPA found that corn ethanol may or may not reduce GHGs [greenhouse gas emissions] by the required 20%, and it was their feeling that most modern corn ethanol wouldn’t. That was a very jaundiced view." EPA, he said, was unfairly applying indirect land-use change emissions to corn ethanol while not looking at indirect emissions of other fuels. "EPA is now saying corn ethanol that wouldn’t be grandfathered under the program would still qualify and would reduce greenhouse gases by around 21%. So it’s a major step forward."

In addition, he said, RFS2 is much better than what California is using to determine life-cycle GHG emissions, which locks corn ethanol out of the market. "RFS2 will put pressure on California to revisit its life-cycle and land-use change analysis. Right now in California, most corn ethanol from the Midwest is considered worse than gasoline in terms of GHG emissions and because of that, it won’t be allowed to play in the California market for very long."

The bad news, Cooper said, is the continued reliance on non-scientific indirect land-use change. "These modeling exercises [by California and EPA] are one view of what might happen, and
an entire industry is being penalized. To use [them] as regulatory tools with enforceable penalties is highly problematic."

"We’re still trying to figure out what EPA has done with sugarcane," Cooper added. "If you go back to the proposed rule, corn ethanol and sugarcane ethanol from Brazil were assumed to have about the same land-use impact. In the final rule, land-use emissions for corn ethanol were cut in half, but the land-use emissions for Brazil sugarcane ethanol were virtually eliminated. When EPA makes the spreadsheets and sup-plemental reports available, maybe we’ll have a better understanding of why they took that approach."

Argentine Blend

A new law in Argentina, the leading exporter of biodiesel and the world’s No. 1 soybean oil supplier, requires all diesel fuel to contain 5% biomass-derived sources.

The law, which was designed to boost production by small and midsized distillers, was scheduled to take effect on Jan. 1. But with smaller plants unable to meet the estimated extra demand of 859,000 tonnes of biodiesel per year, the program was delayed for a month while changes were made. This year’s supply quota is now open to major players such as Vicentin, Glencore, Louis Dreyfus and Molinos Rio de La Plata.

The government promised that prices at the pump will not be affected and said the blend could increase up to 20% in the next four years.

Argentina produced about 331 million gallons of biodiesel in 2009. Expected output for this year is between 442 million and 667 million gallons.


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