UpdateUS EPA plan gets praise from biofuels, fire from petchems

03 February 2010 21:57  [Source: ICIS news]

EPA rule gets praise, criticism(adds updates throughout)

HOUSTON (ICIS news)--US biofuel companies applauded most of the US Environmental Protection Agency (EPA)'s final rule for an updated renewable fuel standards (RFS2), but a petrochemicals industry group had a more critical response.

The rule would require a major increase in the use of biofuels in the nation’s fuel supply.

US ethanol and biodiesel companies applauded most of the provisions in the new rule, which mandates that more than 15bn gal/year of renewable fuels enter US fuel tanks by 2012 and is meant to foster a more robust domestic biofuels market.

The biofuels industry had been waiting for years for the agency to implement RFS2, the creation of which was signed into law in 2007. The new standards will spur domestic demand for biofuels refined using current technology and create financial incentives to develop the next generation of biorefineries.

“Today’s industry and tomorrow’s ethanol producers require stable federal policy that provides them the market assurances they need to commercialise new technologies,” said Bob Dinneen, president of the Renewable Fuel Association (RFA). “To that end, EPA has achieved that goal.”

Biofuels makers had been worried about whether their fuel would come below the agency’s threshold that biofuels emit less greenhouse gas (GHG) than gasoline to qualify for inclusion in RFS2 programmes.

EPA Administrator Lisa Jackson said that after the agency gained access to updated crop science data, it was able to make improvements to its pollutant measurement methodology that eventually showed that crop-based biofuels would meet the new standards.

“We wanted to make sure they really were renewable fuels,” Jackson said. “The numbers we were using initially in the proposal were not right. When we used updated numbers, we got a new result.”

RFS2 calls for more than 15bn gal/year of corn-based ethanol, 21bn gal/year of non-food crop ethanol, 16bn gal/year of cellulosic ethanol and 1bn gal/year of biodiesel by 2022. The RFA estimates that the new regulations will add $1,700bn (€1,224bn) to the national gross domestic product (GDP) within that time.

Elsewhere, Brazilian sugarcane industry Unica welcomed the EPA announcement, saying the new ruling underscores the “environmental benefits” of sugarcane-based ethanol.

According to Unica, sugarcane ethanol meets the "other advanced" biofuels category in RFS2, which Brazil hopes will open the doors for tax-free imports of the product into the US.

Unica is a fierce critic of existing trade barriers imposed on Brazilian ethanol by the US.

The association said under EPA calculations, sugarcane ethanol made in Brazil reduces GHG emissions by 61% compared with gasoline, using a 30-year payback for indirect land use change emissions.

Still a potential problem, however, is the EPA’s plan to consider indirect land usage in its assessment of biofuels pollution. Indirect land usage the clearing of land to plant new crops as old ones are used to grow biofuels crops.

Biofuels producers said they were disappointed that indirect land use provisions survived into the finished rule, but that the agency did change its methodology to make the rule less onerous.

“The methodology employed in the final rule represents a significant improvement over the proposed rule,” the National Biodiesel Board (NBB) said in a prepared statement.

Meanwhile, the National Petrochemical & Refiners Association (NPRA) was more critical of the rule and criticised the EPA for not detailing the rules months ago, while also questioning the science of the new methods.

“While we are still in the process of reviewing these lengthy and complex regulations, we are concerned that a few key provisions evade sound science and may even be unlawful,” NPRA president Charles Drevna said. “We are concerned, for example, that politics may have trumped science with regard to the revisions to the greenhouse gas emissions (GHG) from the production of soy-based biodiesel.

“We also believe that combining biomass-based diesel volumes from 2009 with 2010 and making portions of the final rule retroactive to 1 January 2010 is unfair and likely unlawful,” he added.

Additional reporting by Ben DuBose and William Lemos

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