GREEN Team Newsletter - Issue #216
The Iowa Legislature recently voted with overwhelming, bipartisan support to extend several important policies aimed at encouraging greater availability and use of higher ethanol and biodiesel blends.
The Iowa House of Representatives voted 88 – 6 and the Iowa Senate 49 – 0 to extend a handful of important state tax incentives for homegrown renewable fuels, like E15, E85 and B11 through 2024.
“We commend the Iowa legislature for its overwhelming support in taking this important step to continue Iowa’s leadership in renewable fuels,” stated Iowa Renewable Fuels Association (IRFA) Policy Director Grant Menke. “Extending these tax incentives supports Iowa jobs, cleaner air, competition in the fuel marketplace and Iowa’s motorists through lower fuel prices.”
Included in legislation that is now headed to Governor Terry Branstad for final approval is an extension of two retailer tax credits for ethanol blends:
- The E85 Promotion Tax Credit, available for fuel blends containing 70 to 85 percent ethanol, was extended at 16 cents per gallon.
- The E15 Plus Promotion Tax Credit, available for fuel blends containing 15 to 69 percent ethanol, was extended at 3 cents per gallon from September 16 through May 31, and 10 cents per gallon from June 1 through September 15 to help alleviate the summertime blending issues for registered E15.
The forward-thinking legislation also included an extension and adjustment of the Biodiesel Blended Fuel Retailer Tax Credit. While the incentive will continue at 4.5 cents per gallon for retailers offering a biodiesel blend containing a minimum of 5 percent biodiesel (B5) through 2017, from 2018 through 2024 it will then provide a 3.5 cents per gallon incentive on B5, and a 5.5 cents per gallon credit on B11, or diesel blended with a minimum of 11 percent biodiesel.
Later in the week, the Iowa Legislature voted 94 – 0 in the House of Representatives and 49 – 0 in the Iowa Senate to secure another year of funding for the state’s very successful biodiesel and ethanol blender pump program, the Renewable Fuels Infrastructure Program (RFIP).
“While we were hopeful for a long-term funding solution for the state’s renewable fuels infrastructure program, we’re very pleased today that the Iowa legislature was able to keep this vital initiative going for another year,” said Menke. “The USDA’s Biofuels Infrastructure Partnership re-energized many Iowa retailers, leading to record participation in the blender pump program over the past year. This one-year funding extension allows us to build upon this momentum and ensure Iowans have greater access to cleaner-burning, lower-cost renewable fuels.”
The Iowa Renewable Fuels Infrastructure Program (RFIP) offers cost-share grants to Iowa retailers wishing to upgrade fueling infrastructure to offer E15, E85 and/or biodiesel blends. Reimbursement can be up to 70 percent of the installation costs, up to a maximum of $50,000 per project, with a five-year commitment to sell E15, E85 or biodiesel blends. For more on the program, please click here.
May 3, 2016
The Environmental Protection Agency (EPA) recently delivered its proposed rule for the 2017 Renewable Fuel Standard (RFS) to the White House Office of Management and Budget (OMB) for interagency review. The OMB review is the final step before the proposed rule is published in the Federal Register and opened for public comment.
The proposed rule contains 2017 renewable volume obligations (RVOs) for renewable fuel, advanced biofuel and cellulosic biofuel. It also contains the 2018 RVO for biomass-based diesel. The 2017 standard for biomass-based diesel was finalized in a previous RFS rulemaking.
“This year’s rule really gives the EPA the chance to get the RFS back on track,” stated Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. “The data is clear, the EPA should set the conventional biofuels number at 15 billion gallons and dramatically push up the biomass-based diesel number to account for the foreign imports of biodiesel pouring into the United States. Iowa retailers have proven definitively that you can meet – and greatly exceed – the RFS schedule by simply giving consumers the option of buying higher blends of ethanol and biodiesel.”
Delivery of the proposed rule to the OMB seems to indicate the EPA is on track to finalize the final rule for 2017 RVOs in line with the Nov. 30 statutory deadline.
The EPA delivered the proposed rule to set 2014, 2015 and 2016 RVOs to the OMB on May 7, 2015. The proposed rule was released for public review less than one month later, on May 29.
May 3, 2016
Growth Energy recently announced Emily Skor as its next Chief Executive Officer, effective May 16. Skor most recently served as the Vice President for Communications of the Consumer Healthcare Products Association (CHPA) and the Executive Director of the CHPA Educational Foundation. She succeeds Tom Buis, who assumed a new role as Co-Chairman of Growth Energy’s Board of Directors in July 2015.
“For the last seven years, Tom Buis has been a tremendous ally to the ethanol industry, leading Growth Energy through some of its toughest fights, and on behalf of the entire organization, we are thankful for his service and continued commitment to the industry,” said POET Executive Chairman and CEO and Growth Energy Co-Chair Jeff Broin. “As the ethanol industry continues to evolve – facing new opportunities and challenges – Emily is poised to lead Growth Energy as our next generation leader for next generation fuels. Emily brings a new perspective on policy, reputation management and communications to the organization during this dynamic time for the industry.”
At CHPA, a member-based trade association advocating for consumer healthcare products and serving as leader on regulatory and scientific issues for the industry, Skor oversaw public affairs campaigns, integrating strategic communications into legislative campaigns and coordinating ally development. Before joining CHPA in February 2011, Skor served as Senior Vice President at Dezenhall Resources, a nationally recognized crisis communications and issues management firm. For more than a decade, she helped Fortune 500 companies and industry associations manage issues affecting brand confidence and corporate reputation through media, advocacy, coalition building and consumer education campaigns.
“Since its inception, Growth Energy has been a champion for pro-biofuels policies and represented thousands of voices for the ethanol industry,” said Emily Skor. “The organization and its members are committed to advancing fuel technologies that are proven to be better for the environment and automobile engines. I am thrilled to be part of this effort to take Growth Energy to the next level. As more consumers and automakers alike embrace higher blends of ethanol and legislators continue to support its environmental benefits, we will protect our environment for future generations and give drivers choices at the pump.”
Skor is a Minnesota native and graduate of Wellesley College. She lives in Washington, D.C. with her husband and two children.
May 3, 2016
POET-DSM Advanced Biofuels recently announced, while it has already produced several tank car loads of cellulosic ethanol, it is now in the “ramp-up” phase to reach its full 20 million gallons per year capacity at Project Liberty in Emmetsburg, Iowa.
Last year’s “startup” phase yielded great experience that will benefit subsequent plants and the learning continues each day as POET-DSM Advanced Biofuels works to make cellulosic ethanol in the most efficient way possible.
POET-DSM’s process uses corn cobs, leaves, husk and some stalk as the feedstock for cellulosic ethanol. This product is harvested by local farmers and brought to the plant for processing. Besides ethanol, Project LIBERTY produces biogas from its anaerobic digester and steam from its solid-fuel boiler to produce power to run its own processes and export energy to the adjacent grain-based ethanol plant.
May 3, 2016
The Environmental Protection Agency (EPA) gave final approval in 2012 regarding the use of E15, or fuel containing 15 percent ethanol, and the fuel blend is now sold in 23 states. With many new retailers preparing to offer E15, the Renewable Fuels Association (RFA) issued a new communication detailing how to properly offer E15 at the retail level and highlighting several items retailers should consider before ordering equipment, including:
- What are the equipment options to legally offer E15 to 2001 and newer vehicles?
- What are the various dispenser hose configurations allowed?
- What are the retail fuel dispenser labeling requirements for each configuration?
“Four years and 23 states later, confusion still remains in the fuel equipment and retailing communities when it comes to E15,” said RFA Vice President of Industry Relations Robert White. “With this document, we hope we can eliminate the misinformation and ensure retailers get the appropriate equipment needed to safely and legally offer this relatively new fuel. With proper labeling and education, we look forward to seeing many more retailers, consumers and states embrace E15 in the near future.”
The new RFA document can be viewed here: https://www.ethanolrfa.org/resources/blends/e15/.
May 3, 2016
A recent Renewable Fuels Association (RFA) analysis shows that as California’s Low Carbon Fuel Standard (LCFS) reaches its halfway point, grain-based ethanol has provided nearly half of the greenhouse gas (GHG) reductions under the first five years of the program.
Seven years ago, the California Air Resources Board (CARB) formally adopted the LCFS, requiring fuel suppliers to reduce the carbon intensity (CI) of gasoline and diesel fuels by 10 percent between 2011 and 2020. When the regulation was adopted in 2009, it was expected that grain-based ethanol produced in the Midwest would make a quick exit from the California fuel market due to CARB’s flawed assumption that the CI of corn ethanol was higher than gasoline.
But in reality, data released by CARB last week shows that consumption of grain ethanol has increased under the LCFS, and the biofuel has been responsible for 46 percent of the total carbon credits and roughly 75 percent of the credits generated by fuels that replace gasoline (one credit is equivalent to 1 metric ton of GHG reduction). Of the 16.55 million credits generated since enforcement began in 2011, grain ethanol is responsible for 7.58 million metric tons (MMT). To date, grain ethanol has provided substantially more credits than any other fuel used under the LCFS.
“California regulators are finally recognizing what we in the industry have known for decades — that ethanol is a high octane, low-cost alternative fuel that is readily available and offers meaningful GHG savings compared to gasoline. Seven years later, despite CARB’s bogus indirect land use change penalties, ethanol made from corn and sorghum has proven to be an essential tool to help meet LCFS requirements,” said RFA President and CEO Bob Dinneen. “However, more needs to be done to ensure ethanol remains available as a viable compliance option for the LCFS over the next five years.”
To read RFA’s entire white paper, “As California LCFS Reaches Halfway Mark, Grain Ethanol Provides Half of Carbon Credits,” please click here.
May 3, 2016
As recently reported by OPIS, the U.S. House Armed Services Committee recently rejected an amendment to the 2017 defense authorization bill that would have limited or stopped Department of Defense (DOD) efforts to increase its use of renewable fuels.
During a markup session, Representative Tim Walz (D-Minn.) offered an amendment to remove the language from the bill that could have limited the use of renewable fuels, noting the military push toward greater use of biofuels is an important national security issue.
“We spend half a billion dollars a day getting oil from countries that hate us,” Rep. Walz said, adding “reducing our dependency on foreign oil is not just an economic issue; it’s a vital national security issue. DOD recognizes that and that is why some of the most ground-breaking work on renewable energy is happening within DOD.”
Rep. Scott Peters (D-Calif.) supported Rep. Walz’s amendment, stating, “DOD is the largest institution and consumer of energy in the world and as we’ve seen in recent years, global [oil] markets are volatile, despite massive domestic production increases.
“Just because the price of oil is low today does not mean it will not spike tomorrow and force military leaders to divert dollars away from mission priorities. At a time when we face new and dynamic threats from non-state actors like ISIS and aggression from China and Russia, this [language] prohibits our ability to provide for a robust national defense. The military has chosen to enter into a partnership with USDA to source a competitive American-made fuel source for our war fighters and our military needs the flexibility to diversify its fuel source as it sees fit.”
The committee defeated the amendment by a 33 – 29 margin.
May 3, 2016
Coinciding with this year’s Earth Day, a group of 55 countries, collectively representing at least 55 percent of global emissions, signed the Paris Agreement that will limit the global temperature rise to well below 2 degrees Celsius.
Leading up to the Paris Agreement, countries submitted individual plans, called Intended Nationally Determined Contribution (INDCs), detailing how they plan to meet the greenhouse gas (GHG) emissions reduction targets. Thirty-seven countries have included biofuels in their INDCs, but there’s one glaring omission — the United States.
“It is beyond baffling that biofuels or the RFS were not included in the U.S.’ plans to reduce greenhouse gas emissions,” said RFA President and CEO Bob Dinneen. “The U.S. should be proud that it has the most progressive and effective transportation-focused carbon program in the world. As the U.S. signs the Paris Agreement, it needs to look no further than its own backyard and fully implement the most potent and proven weapon to combat climate change — the RFS.”
According to the Department of Energy’s GREET model, corn ethanol from an average dry mill reduces greenhouse gas emissions by 34 percent compared to gasoline — even when hypothetical land use change emissions are included. Comparing direct emissions only, average corn ethanol reduces greenhouse gas emissions by 44 percent relative to gasoline. In fact, the use of ethanoI in gasoline in 2015 reduced CO2-equivalent greenhouse gas emissions from transportation by 41.2 million metric tons — equivalent to removing 8.7 million cars from the road for an entire year.