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The election of Donald J. Trump to a second term as US president was the talk of the Alternative Fuels & Chemicals Coalition’s annual conference, which took place on the waterfront just south of Washington, DC, last week. “Possibly hostile. At best, indifferent,” was one attendee’s prediction about how the Trump administration would treat the bioeconomy.
In and out of office, the former president has expressed disdain for the sustainability concerns that underpin the transition to biomass and other low-carbon feedstocks. But attendees were optimistic that the sector in the US can reframe its appeal around domestic jobs, energy security, and local supply chains.
The mood was more worried in sessions about biofuels than in discussions about biobased chemicals. That’s because more than half the money many biofuel firms can make under current policy comes from federal and state programs that reward producers, blenders, and customers with tax credits.
“There’s a groundswell of anxiety” among credit applicants, said Tim Urban, a tax attorney and lobbyist at the law firm Bracewell. Firms that are eligible for federal incentives under current policy want to get everything signed and deployed before an administration less motivated to decarbonize takes office in January, he said.
The feeling is mutual, Urban said, and federal workers are racing to finalize tax rules and get money out the door from President Joe Biden’s signature economic legislation, the Inflation Reduction Act (IRA) of 2022. “There’s quite a fire drill going on to give as much to as many people as possible before President Biden’s term ends,” Urban said.
At the same time, few attendees seemed to think the Republicans will scrap the IRA, even with control of the federal government, because the bioeconomy enjoys strong support from farmers and other agriculture interests that provide the biomass.
“They may nibble around the edges of the IRA, but there is no support in Congress for repeal or even major changes,” said Paul Schubert, CEO of Strategic Biofuels. Schubert’s firm is building a plant in Louisiana that will use gasification, Fischer-Tropsch synthesis, and CO2 sequestration to convert forestry waste into jet and diesel fuel with a negative net carbon footprint.
In contrast, biobased chemicals haven’t been able to attract major subsidy programs, said Steve Friedewald, a consultant who is working with the biobased ethyl acetate maker Viridis Chemical. As a result, he said, companies that make them are less sensitive to changes in tax credit policy.
That lack of government support has sunk chemical innovations that could have made an environmental impact, said Rusty Pittman, CEO of the fermentation start-up DMC Biotechnologies. But it has also made the biobased chemical sector strong and self-reliant, he said.
The government’s role goes beyond subsidies and loans. Tariffs and other policies that discourage international trade may help the US bioeconomy mature, said Shara Ticku, CEO of the biotech palm oil replacement start-up C16 Biosciences. One reason biobased chemical firms struggle, she said, is that they often have to compete against products made with cheap raw materials imported from regions with dubious environmental regulations.
“Biotechnology can change that,” said Kevin Jarrell, CEO of the synthetic biology firm Modular Genetics. The firm is advancing an acyl glycinate surfactant that can replace coco glucoside, a personal care ingredient derived from tropical oils. Modular’s process starts with sugar, a feedstock that can be made domestically, unlike palm or coconut oil. “It can make sense to make it in the US,” he said.
Michael Japs, senior vice president for process technology and engineering at the synthetic biology firm Genomatica, said business leaders across the bioeconomy should talk less about greenhouse gases and CO2 and more about supply chain security and domestic job creation. Both angles are true, he said, but the latter is more likely to appeal to officials in the incoming White House and congressional majority.
“With full control, Republicans can kind of do . . . whatever they can get internal agreement on,” said Bracewell government relations strategist Liam Donovan. For all of them, he said, “frame your story around American energy dominance.”
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