EPA’s Magic Number for Cellulosic Biofuels

It's going to be 6 million gallons. That is how much cellulosic biofuel EPA's research (crystal ball?) shows will be produced in the U.S. this year, and what fuel blenders, who live by the Renewable Fuels Standard, will have to put in their product. EPA's final rule on this question was published today. And the text includes a remarkable figure: "From 2007 through the second quarter of 2012 over $3.4 billion was invested in advanced biofuel production companies by venture capitalists alone." Egads. Anyway, for at least one more year, cellulosic biofuel will be the black-footed ferret of fuel types, which is to say, exceedingly rare. By comparison there will be over 16 billion gal of regular biofuel (like the stuff made from corn and soybeans) this year. The 6 million figure comes from output from two sources - the largest is Kior's Columbus, MS plant, which is projected to make between 5 or 6 million gal of gasoline and diesel from woody biomass using a special kind of catalytic cracking technology. The remainder will be produced by Ineos Bio (see the below post). I note that the Kior facility's output is not ethanol and so nicely side-steps the issue of the "blend-wall", which affects ethanol producers. For 2014, however, the fact that most advanced biofuels are ethanol will cause the EPA some RFS problems. EPA is now saying that there will be changes:
EPA does not currently foresee a scenario in which the market could consume enough ethanol sold in blends greater than E10, and/or produce sufficient volumes of non-ethanol biofuels to meet the volumes of total renewable fuel and advanced biofuel as required by statute for 2014. Therefore, EPA anticipates that in the 2014 proposed rule we will propose adjustments to the 2014 volume requirements, including the advanced biofuel and total renewable fuel categories. We expect that in preparing the 2014 proposed rule, EPA will estimate the available supply of cellulosic biofuel and advanced biofuel volumes, assess the ethanol blendwall and current infrastructure and market-based limitations to the consumption of ethanol in gasoline-ethanol blends above E10, and then propose to establish volume requirements that are reasonably attainable in light of these considerations and others as appropriate

Author: Melody Bomgardner

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