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Renewable Fuel Standards Spark Opposition

Environmental Protection Agency’s biofuels plan draws fire

by Steven K. Gibb
July 13, 2015 | A version of this story appeared in Volume 93, Issue 28

Credit: Novozyme
A Novozymes plant in Blair, Neb., makes enzymes for ethanol production.
The people walk up a ladder away from the top of a giant tank.
Credit: Novozyme
A Novozymes plant in Blair, Neb., makes enzymes for ethanol production.

Oil, chemical, agribusiness, and biotechnology companies regularly spar with each other over the biofuels market. But now, all are taking aim at the Environmental Protection Agency’s planned Renewable Fuel Standards (RFS).

Agribusiness, biotech, and chemical firms see the proposed standards for the ratio of biofuels to petroleum-based fuels required to be in the U.S. fuel supply as wanting. They say a nascent industry is being starved to serve other interests.

The oil and automotive industries, on the other hand, say they and consumers are being forced to create and use biofuel mixes that can negatively impact or damage combustion engine performance.

Under the 2007 Energy Independence & Security Act, EPA sets renewable fuel standards that require the blending of biofuel made from corn, sugar cane, other biomass, waste oil, and other sources into gasoline and diesel. The standards, introduced and modified under the George W. Bush Administration, were intended to promote energy independence and address climate change. They set volume requirements for how much biofuel must be combined with traditional fossil fuels to power 270 million cars, trucks, boats, and motorcycles in the U.S.

Last month, EPA proposed requiring 16.3 billion gal of ethanol equivalent to be blended into gasoline and diesel in 2015 and 17.4 billion gal in 2016.

The corn ethanol industry says these proposed biofuel volumes are too low and ignore congressional mandates. It also charges that oil companies are unfairly blocking motorists’ access at the pump to fuels with ethanol content higher than 10%.

In response, oil industry officials claim that blending more than 10% of ethanol into gas harms engines and that automakers are threatening to void warranties on vehicles that use fuels with a higher concentration of ethanol. The oil sector is urging EPA to freeze the proportion at around 10% ethanol.

The Biotechnology Industry Organization (BIO), a biotech trade group, faults EPA for backing away from the ethanol volume targets that Congress set in the 2007 law.

In an economic study, BIO found that EPA’s failure to support the targets “crushed” $13.7 billion in investment in new plants and technologies. BIO says 80,000 new jobs, many of them in the chemical sciences, are at stake now with EPA’s proposed standards on renewable fuels.

EPA calls the proposed standards “am­bitious but within reach of a responsive marketplace.” An agency spokeswoman tells C&EN, “We began by assessing the feasibility of meeting the statutory targets on the schedule originally laid out by Congress and concluded the statutory targets cannot be attained in this time frame due to multiple real-world constraints. We then looked specifically at what total and advanced volumes could be attained and would drive growth in renewable fuel production and use.”

Such explanations have failed to assuage critics. DuPont, for example, says “the rule is misguided and is a major step backward.” In a statement, the company says the standards threaten U.S. leadership in biofuels technology, in both cellulosic and corn-based ethanol production where DuPont has businesses.

The American Petroleum Institute (API) is calling the program “flawed from the beginning and now broken.” And Senate Environment & Public Works Committee Chairman James M. Inhofe (R-Okla.) says that EPA’s plan is “a reminder that this is a mismanaged program in need of rigorous reform.”

EPA has long delayed issuing the standards. This, in combination with problematic volume requirements the agency proposed in November 2013, created market uncertainty, a poor investment atmosphere, and lack of environmental progress, stakeholders tell C&EN.

However, it appears that within the energy sector, the real fight is over fuel distribution, a dispute that may ultimately be decided by the courts. Ethanol advocates say Congress’s intent requires the oil and gas sector to include more ethanol in the fuel that drivers put into their tanks. They contend that EPA’s plan empowers the petroleum industry to continue to thwart consumer choice at the pump with no fear of consequence for their bad behavior.

API, however, highlights potential mechanical problems that can crop up in engines burning gasoline with more than 10% ethanol.

Meanwhile, “RFS uncertainty is threatening this industry and America’s energy future. The RFS was a big reason we built a $200 million plant in Blair, Neb., to manufacture enzymes for corn ethanol,” says Chris Bender, public affairs director at Novozymes, a biotech company with North American headquarters in North Carolina.

Protecting investments in cellulosic ethanol plants is “absolutely dependent on the EPA fulfilling its obligations to the existing biofuels industry. RFS policy certainty is a prerequisite for the existing industry to expand,” DuPont’s Brenda G. Heffelfinger said last month at a hearing on the RFS.

EPA says it is reviewing public comments and will finalize the RFS rule by the court-ordered deadline of Nov. 30.



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