UpdateUS EPA proposes slashing 2011 cellulosic fuel target

12 July 2010 22:15  [Source: ICIS news]

(adds updates throughout)

HOUSTON (ICIS news)--The US Environmental Protection Agency (EPA) on Monday proposed slashing its 2011 blending target for cellulosic-based biofuel as production of the fuel lagged initial estimates.

The agency said lack of availability forced it to reduce its cellulosic biofuels target in 2011to 17.1m gal, or 7% of the original target of 250m gal set in the Energy Independence and Security Act (EISA) of 2007. 

“Based on the analysis of market availability, EPA is proposing a 2011 cellulosic volume that is lower than the EISA target,” the agency said in a statement. “Overall, EPA remains optimistic that the commercial availability of cellulosic biofuel will continue to grow in the years ahead.”

The agency said there were five companies in the US able to produce cellulosic ethanol for the mass market by next year. It was also tracking 17 other cellulosic ethanol companies, three of which it said could start commercial-scale refining in 2012.

The Renewable Fuels Association (RFA) trade association did not debate the EPA’s estimate of cellulosic ethanol production capacity for 2011, but said that the revised target volume could turn off investment.

RFA spokesman Matt Hartwig referred questions to the organization's blog, which read, “While this may be prudent for EPA based on market conditions, it does send a chilling effect through the investment community with respect to cellulosic ethanol technologies.”    

The EPA said it would keep the original 2011 EISA target blending levels for biodiesel and advanced biofuels at 800m gal and 1.35bn gal, respectively.

The EPA also proposed changing the renewable fuel mandate to include biofuels derived from canola oil, sorghum, pulpwood and palm oil, none of which petroleum suppliers can now use to satisfy their blending obligations. 

The rule change would also set criteria that would allow some foreign feedstocks to be treated like their domestic counterparts, which could open the door for blenders to use imported biofuels to meet their biofuel targets.

The EPA said it would accept public comment on the proposed rule change until 30 days after the proposal is published in the federal register, which has not yet occured.

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By: Ben Lefebvre
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