In the hours ahead of a roll call on their debt limit bill, House Republican leaders relented on a proposal to eliminate tax credits for biodiesel, renewable diesel, and second-generation biofuels. They proceeded with a repeal of the $1.25-a-gallon credit for sustainable aviation fuel that was created last summer as part of the climate, health, and tax bill.
Verbio North America says it will more than double the capacity of its plant in central Iowa to produce renewable natural gas from corn stover, and it plans to begin production of corn ethanol in the final months of the year. The facility was the first of three plants in the nation to return to biofuel production after faltering as a producer of cellulosic ethanol, made from grasses, woody plants and crop residue.
Five years ago, King Willem-Alexander of the Netherlands joined Gov. Terry Branstad at a biofuels plant in northwestern Iowa to inaugurate commercial-scale production of cellulosic ethanol. This week, the owner of that facility announced it would no longer produce the so-called “second-generation” renewable fuel at the plant.
The White House is taking a break from biofuels policy, at least temporarily, after two meetings with President Trump at the table failed to find consensus between the oil and ethanol industries. The only agreement, according to Iowa Sen. Chuck Grassley, who was part of both meetings, "was to look at economic studies" about the impact of the Renewable Fuel Standard and possible changes.
Corn ethanol represents the first generation of biofuels. Cellulosic ethanol, made from grass, woody plants, and crop debris, was supposed to be the second generation.
Farm-state officials played their Trump card six weeks ago, calling in White House support to quash potential cuts in the Renewable Fuel Standard, which sets U.S. targets for biofuel consumption.
Texas Sen. Ted Cruz won’t let go of his “hold” on USDA nominee Bill Northey, said Iowa Sen. Chuck Grassley, so he and fellow Iowa Sen. Joni Ernst have appealed to Senate Majority Leader Mitch McConnell to arrange a vote. “We want to do it as soon after Nov. 30 as we can,” Grassley told ag reporters.
EPA administrator Scott Pruitt quelled midwestern protests over a potential change in course by the Trump administration, saying there would be no additional cuts in the biofuels mandate proposed for 2018. But two groups, the National Biodiesel Board and the Iowa Renewable Fuels Association, said the government ought to raise the target for biodiesel.
In 2007, Congress set a goal of mixing 36 billion gallons of biofuels, the bulk of it coming from second-generation "advanced" fuels, into gasoline annually, beginning in 2022. Economist Jonathan Coppess of the University of Illinois says the "actual, effective floor" for biofuels will be 20 billion gallons, based on the recent U.S. appellate court ruling that clarifies the EPA's power to adjust the so-called Renewable Fuels Standard.
Minnesota ruled that biofuels will need to contain a mix of 20 percent soybeans or other renewable fuel sources, cutting the amount of emissions while boosting demand for soybeans, said MPR News. "This is an opportunity to add value to farmers' products," state agriculture commissioner Dave Frederickson said last Thursday, according to the report. "Given the fact that the first B10 mandate actually added about 63 cents per bushel, on every bushel sold, we're hoping to double that as we move into a B20 mandate."
In hopes of expanding sales of gasoline with a 15 percent biofuel blend, ethanol trade groups are putting pressure on the EPA as well as Congress, says DTN. Their immediate goal is approval by the Senate Environment and Public Works Committee of a bill to waive a fuel volatility rule, which would allow the sale of E15 during the summer.
A U.S. bankruptcy judge approved the sale of Abengoa Bioenergy's 25 million-gallon-a-year cellulosic ethanol plant in Hugoton, Kan., to newly formed Synata Bio for $48.5 million, or 12 cents on the dollar, says Ethanol Producer Magazine. The Hugoton plant, which opened in October 2014, is one of three commercial-scale cellulosic plants in the country.
The fuel industry will be obliged to use 15 billion gallons of corn-based ethanol in 2017, said the EPA. It was the first time the agency has set the target for the biofuel at the maximum allowed by the 2007 energy law. The 500-million-gallon increase in the ethanol mandate comes at a time when U.S. gasoline consumption is rising and making it easier to consume larger volumes of biofuels.
Despite millions of tons of available feedstock, ranging from corn stover to switchgrass and wood waste, only a trickle of cellulosic ethanol is being produced. "Cellulosic fuels' main hurdle seems to be economic," says Scientific American in sizing up the second-generation biofuel that has failed to live up to expectations for a cleaner-burning fuel that doesn't compete with the food and feed sectors.
The U.S. produced a record 14.7 billion gallons of corn ethanol last year, notwithstanding the dispute over the federal biofuels mandate and perennial jostling with the oil industry for market share.