Continued Growth

By Ron Kotrba | January 09, 2012

After the congressional super committee failed to meet its deadline to agree on a bipartisan plan
to cut federal spending and reduce the national deficit, the question for conventional and advanced biofuel producers was, how might this impact the chances of extending various expiring federal tax credits?

President of the Advanced Biofuels Association Michael McAdams said most people who still had any hope that these tax incentives would be renewed thought the best chance for an extenders package would be to attach one to the super committee effort. “How,” McAdams asked, “do you do an extenders package with no vehicle? Do you simply deficit finance it? That would be politically awkward following the public failure to reach a deficit deal. Or do you come up with offsets and try and move certain pieces to spur the economy?”

Despite the lack of tax code support expected this year, advanced biofuels and biobased chemicals will continue making headway in the marketplace. Lux Research generated a new report, titled “Nations Race to Build Alternative Fuel Capacity,” in which the lead author of the report, Andrew Soare, writes, “The market is shifting to second-generation fuels like renewable diesel and cellulosic ethanol. These fuels bypass the major logistical hurdles of first-gen alternative fuels, and investors, as well as governments, are realigning investment to grow capacity.”

The report projects that in 2015, next-generation renewables such as biobutanol, renewable gasoline, biojet and biocrude, will reach a combined 3.2 billion gallons, a respectable commercial volume for this emerging industry.