Even though the administration is likely to raise its targets for both ethanol and advanced biofuels while finalizing 2014’s Renewable Fuels Standard (RFS) levels, the RFS has provided anything but certainty for biomass developers. Seven months into the year, it also remains unclear when the EPA will even publish the final targets for obligated parties since the White House’s Office of Management & Budget hasn’t even received the rule for review which can take several months.
Thus, with the EPA showing increased deference to the “blend wall” and a recognition of the slower-than-expected deployment of fueling infrastructure, it is worth taking a look at what other policies can help bring more biomass products into the marketplace.
EPA’s GHG Rules
EPA’s proposal for reducing greenhouse gas (GHG) emissions from existing power plants will likely be the biggest single federal policy driver for renewable energy implemented by the Obama Administration. In its draft rule released in June, the EPA stated that “biomass fuels can yield climate benefits as compared to burning conventional fossil fuels.“
Although there is still some uncertainty over permitting for new biomass facilities in the wake of the U.S. Supreme Court’s decision to thrown out EPA’s tailoring rule, preconstruction permitting won’t be required for biomass plants if the only pollutant that would trigger Prevention of Significant Deterioration (PSD) regulations is carbon dioxide. Only if a biomass facility is large enough to trigger permitting for other pollutants, will it have to get permitting for CO2 emissions.
Algae is seen as a potential win-win for energy development and the environment. Although neither EPA’s proposal for new or existing power plants includes carbon capture and reuse technologies as strategies for reducing GHG emissions, these proposals have not been finalized. Time remains for the agency to recognize the role algae can play in reducing carbon emissions from any number of power sources, which could create incentives for power plants to use new technologies that capture waste carbon and feed it to algae.
According to the Energy Information Agency, the Pentagon is requesting that biofuels be included in its annual request for fuels that are delivered to its facilities. This is the first time the request has included biofuels, which would be blended with military-specified diesel fuel and jet fuel. The request is part of the Navy’s request to reach its goal of generating 50% of its energy from alternative sources by 2020.
In a final rule issued earlier this year, the EPA said it would allow renewable electricity made from certain biomass sources to qualify under the RFS if it is used to power electric vehicles (EVs). Under the rule, entities would be allowed to generate credits for that electricity and sell them to refiners. The standard applies broadly to biomass-derived transportation fuel, and EPA has determined that renewable electricity made out of biogas from landfills, municipal wastewater treatment and solid waste digesters, and agricultural digesters meets the 60% GHG reduction threshold to qualify as a cellulosic biofuel.
Three years ago, Connecticut started to lend money to fund commercially viable green projects. The goal was to combine public financing with private loans from community banks and other financial institutions to help create a renewable energy marketplace. New York started its own green bank in 2013 and is now evaluating proposals to fund. California, Hawaii, and New Jersey have plans to create similar enterprises.
The Farm Bill enacted this year provides rural energy programs with $881 million in mandatory funding over the next five years. This legislation reauthorized the 9003 Biorefinery Assistance Program with mandatory funding of $100 million for fiscal 2014 and $50 million each for fiscal 2015 and 2016. It also allows renewable chemicals to qualify for funding for the first time. The Biomass Crop Assistance Program (BCAP), created to help farmers grow crops for energy and fuels, was reauthorized at $25 million per year for five years.
So, even though EPA’s implementation of the RFS has been frustrating to the biomass community, several other federal and state policies remain in place to help bring this feedstock into America’s energy market.