Publication

February 4, 2010Client Alert

President Obama Announces Efforts Aimed at Enhancing Biofuels Industry

As part of the Administration’s efforts to reduce American dependence on foreign oil and build a clean energy economy, yesterday, President Barack Obama announced biofuels policy updates involving the National Renewable Fuel and Biomass Crop Assistance Programs, the President’s Biofuels Interagency Working Group and a new Interagency Task Force on Carbon Capture and Storage. A brief summary of each is provided below.

Renewable Fuels Standard 2 (RFS2): The National Renewable Fuel Program was established by Congress to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel. Under a rule finalized by the EPA, as required by the Energy Independence and Security Act of 2007, the President announced that the Renewable Standard Program will increase the required volumes of renewable fuel to 36 billion gallons by 2022. The total renewable fuels volume standard for 2010 will be 12.95 billion gallons total, with 6.5 million gallons of cellulosic fuels, and 1.15 billion gallons of biomass based diesel. The revised statutory requirements establish new specific annual volume standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel that must be used in transportation fuel. The revised statutory requirements also include new definitions and criteria for both renewable fuels and the feedstocks used to produce them, including new greenhouse gas emission (GHG) thresholds as determined by lifecycle analysis. For the fuel pathways modeled, the following meet or exceed the respective required minimum GHG reduction standards: corn based ethanol plants using new efficient technologies, soy based biodiesel, biodiesel made from waste grease, oils and fats and sugarcane based ethanol. Significantly, corn based ethanol fared significantly better under the final RFS2 standards than the previously proposed standards. Fuels derived from cellulosic materials meet, and generally significantly exceed, the minimum GHG reduction standard. RFS2 has also been expanded to include all transportation fuel including fuels used for highway vehicles and engines, and nonroad, locomotive and marine engines. The regulatory requirements for RFS will apply to domestic and foreign producers and importers of renewable fuel used in the U.S.

*The rule can be found at: http://www.epa.gov/otaq/renewablefuels/index.htm

Biomass Crop Assistance Program (BCAP): The President announced the U.S. Department of Agriculture (USDA) has proposed a rule on the BCAP to provide financing to increase the conversion of biomass to bioenergy. The BCAP was authorized in the Food, Conservation, and Energy Act of 2008 and the financing in the proposed rule aims to spur the expansion of dedicated non-food crops for renewable energy and biofuel production. In addition to the BCAP matching payments announced last year, the new proposed rule would providing funding for producers of eligible renewable crops within a select geographical area to receive payments up to 75% of the cost of establishing the crop and annual payments equal to the market rate plus any incentive for up to 15 years of crop production.

*The announcement and a copy of the proposed rule can be found at:
http://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0_1OB?contentidonly=true&contentid=2010/02/0046.xml

Biofuels Working Group: The President announced that the President's Biofuels Interagency Working Group had released its first report entitled, “Growing America's Fuel.” The report, authored by group co-chairs, Secretaries Vilsack and Chu, and Administrator Jackson, outlines a strategy to advance the development and commercialization of a sustainable biofuels industry to meet or exceed the nation's biofuels targets.

*The full report can be found at:
http://www.whitehouse.gov/sites/default/files/rss_viewer/growing_americas_fuels.PDF

Interagency Task Force on Carbon Capture and Storage: The President announced a Presidential Memorandum creating an Interagency Task Force on Carbon Capture and Storage. Within 180 days, the task force will work to develop a federal strategy to speed the development and deployment of clean coal technologies with a goal of bringing five to ten commercial demonstration projects on line by 2016.

*The full memorandum can be found at:
http://www.whitehouse.gov/the-press-office/presidential-memorandum-a-comprehensive-federal-strategy-carbon-capture-and-storage

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