A New Year for Biofuels

Fuel blenders are finding that the New Year is bringing a few changes to their business. Before Congress adjourned for the holidays, it opted not to renew the subsidies for putting corn ethanol into gasoline. Though the subsidy had become a fact of life - and added up to $6 billion last year - the fall of the corn regime was not unexpected. This morning, NPR tried to answer the question of whether anybody would notice the difference, and according to their expert, energy economist Bruce Babcock at Iowa State University, most likely no one will. You can review the segment on the NPR website. I don't yet have a number for 2011 production of corn ethanol, but 2010 was a record year, according to the Renewable Fuels Association. U.S. refineries produced 13.23 billion gallons of the stuff. So bear that number in mind for my next item... Totally aside from and unrelated to the generous corn ethanol subsidy that no longer exists, the EPA still requires the blending in of biofuels in its Renewable Fuels Standard, now in its second edition (RFS2). For 2012, EPA says blenders must include 8.65 million gallons of cellulosic biofuel* in their fuel mix. That will be equivalent to .06% of all renewable fuel produced in 2012. RFS2 says blenders will need to use 9.23% of renewable fuels in their blends in 2012 - most of that will still be corn ethanol. EPA is tracking 6 cellulosic biofuel projects that are supposed to produce in 2012, and that is how it came up with the number. This is what EPA published at the end of December:

KL Energy Corp. is the only facility in the United States currently generating cellulosic biofuel RINs. American Process Inc., Fiberight, and ZeaChem all anticipate completing construction on their production facilities in late 2011 or early 2012 and plan to begin producing biofuel soon after their facilities are complete. INEOS Bio and KiOR are targeting April 2012 and mid 2012 for the start-up of their respective cellulosic biofuel production facilities. The variation in these expected start-up times, along with the facility production capacities, company production plans, and a variety of other factors have all been taken into account in projecting the available volume of cellulosic biofuel from each these facilities.

There are a couple of other projects in the works that are likely to be RFS2 candidates, but not this year. Poet has received a conditional USDA loan guarantee and is building a co-located plant (with corn ethanol) in Emmetsburg, Iowa - scheduled for completion in 2013. DuPont now has full ownership of what used to be DuPont Danisco's cellulosic project. No word yet on when that plant will be constructed, but it will be in Nevada, Iowa. *Edited 1/4/12 to state cellulosic biofuel rather than cellulosic ethanol. EPA anticipates that the largest cellulosic fuel producer will be KiOR, which will be making biodiesel and gasoline from cellulose at its plant in Columbus, MS. KiOR is the only project of the six planning to make anything other than ethanol.    

Author: Melody Bomgardner

Share This Post On