RFA praises Obama’s support of US biofuels industry

05 May 2009 19:47  [Source: ICIS news]

HOUSTON (ICIS news)--The US Renewable Fuels Association (RFA) on Tuesday commended the US Environmental Protection Agency (EPA) and the Obama administration for supporting the US biofuels industry but indicated it would challenge the agency's plans to broaden lifecycle analysis of biofuel environmental benefits.

In a press conference earlier on Tuesday, the US announced the formation of a biofuels interagency working group, comprised of representatives from the Department of Agriculture and Department of Energy as well as the EPA.

The group’s goals include moving the auto industry toward increased production of vehicles that can use ethanol at concentrations up to 85%, shielding corn producers from the credit crisis, and working with corn producers to curb their use of natural gas and coal in ethanol production.

“I think the president has sent an incredibly important signal that biofuels are going to be a key component in his strategy to address energy challenges,” said RFA CEO Bob Dinneen. “Investments in biofuels, like ethanol, are creating green jobs here at home, reducing America’s foreign oil dependence, and helping to meet out environmental goals.”

The federal interagency group will provide funds to refinance existing investments in renewable fuels refineries “to preserve jobs in ethanol and biodiesel plants”.

There have been several bankruptcies among US bio-ethanol producers, and industry leaders have warned that the sector could collapse without urgent and broad federal support.

Biofuels manufacturers have petitioned the EPA to raise the national blend cap on ethanol in gasoline from its current 10% to 15%. The agency's action on that request is pending and a decision is expected by year end.

An increase in the ethanol blend cap is opposed by US chemical firms, refiners, environmental groups and other industries.

“This is going to streamline cooperative efforts between the federal government and private industry and bring about the accelerated evolution of the biofuels industry in the US, and we’re very excited about it,” Dinneen said.

Earlier on Tuesday, the EPA released its proposed rule for implementing the new renewable fuels standard (RFS), which was expanded as part of the Energy Independence and Security Act (EISA) of 2007 and sets higher targets for US production and consumption of biofuels.

However, the proposed EPA rule for implementing the RFS goals also said that the agency will review the environmental value of various biofuels based on a lifecycle analysis that may include biofuel-related land use diversions outside of the US, a consideration that could reduce the environmental balance for grain-based ethanol.  US bio-ethanol production is almost wholly corn-based.

The RFA said it is prepared to engage the EPA over that issue and noted that the agency's direct fuel-to-fuel evaluation found that grain-based ethanol reduces greenhouse gas (GHG) emissions by more than 60% compared with gasoline.

That, said RFS, demonstrates that corn ethanol meets the environmental standards set by EISA. 

Under that statute, corn starch ethanol must reduce GHG’s by 20%, advanced biofuels and biodiesel by 50%, and cellulose-based ethanol by 60% when compared to gasoline.

“EPA has reconfirmed the fact that when directly compared to gasoline, ethanol significantly reduces greenhouse gas emissions,” said Dinneen. “This apples-to-apples comparison reaffirms the substantial greenhouse gas reductions offered by ethanol calculated in numerous studies.”

The new renewable fuels standard calls for the blending of 36bn/year gallons (136bn/year litres) of biofuels into gasoline by 2022, with 15bn gal/year of that total from conventional grain ethanol.  Current US bio-ethanol production is around 10.5bn gal/year, but there is another 2bn gal/year of additional capacity that is idle.

(Additional reporting by Joe Kamalick)

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By: Ben DuBose
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