US elections vex biobased fuel and chemical makers

The specter of Donald J. Trump returning to the White House cast a shadow over the 2024 Advanced Bioeconomy Leadership Conference, held last week in Washington, DC. From the talks and hallway chatter, the takeaway was that biobased fuels and chemicals have momentum—and that government policies will strongly influence where they’ll go.

US Secretary of Agriculture Tom Vilsack, who spoke on Thursday, March 14, said the Joe Biden administration sees the sector as a crucial part of its plans for economic development and climate change mitigation. To succeed, he said, the US needs to recapture its technological leadership by investing in chemistry, fermentation, and infrastructure.

Cultivating a low-carbon, 21st-century economy is comparable to farming, Vilsack said. “You can’t keep planting the same crop and hope it keeps producing. You have to nourish the soil.”

The emphasis at the conference was on biobased fuels, a reflection of the difficulty of powering aviation and heavy transportation without traditional liquid fuels. “The reality is, we’re not going to have battery-powered planesanytime soon, we’re not going to have hydrogen-powered planes anytime soon,” Vilsack said. “We need low-carbon fuels.”

Although the secretary asserted that the Biden administration’s policies are making the US the best place to build a bioeconomy, the crowd repeatedly asked panelists what will happen if Trump wins back the US presidency and starts dismantling those supports.

The answer, often, was that companies will take their investments elsewhere. The sector is relatively young, and many firms have not yet committed to sites for their first commercial-scale plants. Eric McAfee, CEO of the biofuel maker Aemetis, said his company is working in both India and the US as a way to mitigate the political risk. Other panelists pointed to Canada and Mexico as alternatives.

“It’s a statement about where we are that we’re talking about political risk insurance against ourselves,” said George Schulz, a managing director at the business insurance firm New Energy Risk.

Despite the electoral anxiety, the overall mood of the meeting was optimistic. For example, a panel on federal policy celebrated the US Treasury Department’s December adoption of the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model, a system for counting greenhouse gas emissions that was developed by the US Department of Energy and is favored by industry. Vilsack also supports the GREET model and has directed the US Department of Agriculture to adapt it for analyzing agricultural products and practices.

And a number of companies shared milestones. Patrick Gruber, CEO and director of the biofuel maker Gevo, said making jet fuel from biomass by his firm’s process now costs about the same as making it from petroleum, though the equipment costs more. DG Fuels, which has plans to make biobased hydrogen, jet fuel, and diesel, said it has signed a $26 million community benefits agreement with the residents of St. James Parish, Louisiana, and expects to make a final investment decision on a $4 billion plant there within 11 months.