Renewable fuels look to states, marketplace, exports
The Hagstrom Report
While renewable fuels industry officials will continue to push the Environmental Protection Agency to maintain favorable policies for the industry, their organizations are increasingly focusing on the role that the states, the marketplace and exports can play in increasing consumption, the annual meetings of the National Biodiesel Board and the Iowa Renewable Fuels Association indicated last week.
National Biodiesel Board officials said during their online annual conference that more states are likely to follow California in establishing low carbon fuel standards.
NBB CEO Donnell Rehagen told reporters that biodiesel had fared much better during the COVID-19 pandemic than ethanol did because, while individuals reduced driving, goods still need to be moved and trucks use diesel.
Compared with ethanol, biodiesel volumes “held extremely strong. It is an exciting time for the industry,” Rehagen said. He noted that Congress had renewed the biodiesel tax credit through 2022.
Rehagen said industry officials worry that the push for electric vehicles means that policymakers will miss the opportunity to recognize biodiesel as a cleaner fuel today. But he added that electrification will have more of an impact in light vehicles than in the trucks that use diesel.
NBB also noted in a recent news release that “fleets and consumers have an impressive list of new diesel models to look forward to in model year 2021,” with General Motors, Fiat Chrysler and Ford bringing out diesel SUVs and pickup trucks.
“The vast majority of automakers support B20 or higher biodiesel blends, not only providing the opportunity for their customers to reduce their own carbon emissions, but also reducing the Scope 3 emissions generated within their supply chain, showing investors their commitment to climate change,” NBB said.
Growth Energy CEO Emily Skor told the Iowa Renewable Fuels Association meeting, also held last week, that while the industry will work with the White House to ensure that President Biden keeps his campaign promises to support renewable fuels and to stop small refinery exemptions from the Renewable Fuel Standard, the real key to the future is higher blends.
“Last year was the worst fuel market in 30 years. Retailers across the board suspended capital investment,” Skor said.
“But E15 sites actually grew 10%. E15 is now available at nearly 2,300 locations.”
She noted that Growth Energy also helped its retail partners secure nearly $30 million in grants under USDA’s Higher Blends Infrastructure Incentive Program.
“The RFS will not be the vehicle that drives a substantial step change in domestic ethanol demand. For that, we must take the bull by the horns and make higher blends the national commercial success we know,” Skor said. “Opening new markets for E15 is at the heart of Growth Energy’s mission. And we continue to invest in the relationships and talent to make it happen.”
Skor said she considered Iowa to be a model of state biofuels activism.
“Iowa producers and farmers led the charge on the Iowa tax differential and infrastructure investments, modernizing tax incentives for higher biofuel blends and securing COVID funding for E15 infrastructure,” Skor said.
“The work happening here is a model for the robust legislative and regulatory agenda we’re pursuing in other states, like Minnesota, where policymakers are considering a climate roadmap that would make E15 the new normal. Or Missouri, where lawmakers are considering tax incentives to help us eliminate remaining barriers to E15 growth.”
In California, she noted, biofuels like ethanol have generated more than 75% of the carbon savings achieved under the state’s decade-old low carbon fuel standard.
Skor referenced a new report led by David MacIntosh, chief science officer of Environmental Health and Engineering Inc. and adjunct professor of environmental health at Harvard’s T.H. Chan School of Public Health, that found that greenhouse gas emissions from corn ethanol are 46% lower than gasoline, up from the estimated 39% done by previous modeling.
She added that Growth Energy is encouraging foreign countries to use higher blends.
“Canada is our largest ethanol trading partner. Mexico could be an ethanol fuel market to rival California — offering a 1.2 billion-gallon growth opportunity,” Skor said.
“And that is just our neighbors to the north and south. A nationwide transition to E10 in Mexico, Canada, China, India, Japan, and Indonesia would create a combined potential of 7.6 billion gallons of new ethanol demand.”
Former U.S. Ambassador to China and former Iowa Gov. Terry Branstad, a Republican, also said at the Iowa summit that the United States has “just opened the door for ethanol” in foreign countries.
In China, Branstad said, the population is concerned about pollution, but the country’s gasoline suppliers still use MTBE, which poisons the ground water.
The United States needs to insist on “fairness and reciprocity” in trade relations, Branstad said, and not just with China but other countries. Brazil, he said, should not be able to ship ethanol to California duty-free.
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