AEC, BIO write EPA letters about cellulosic waiver

Stable policy is needed, and there are options available for obligated parties outside of an all-out waiver retroactive to last year.
By Ron Kotrba | February 16, 2012

The Advanced Ethanol Council and Biotechnology Industry Organization both wrote letters this week to U.S. EPA Administrator Lisa Jackson urging EPA to deny the joint petition filed by the National Petrochemical & Refiners Association, American Petroleum Institute and Western States Petroleum Association to retroactively waive the 2011 cellulosic biofuel Renewable Volume Obligation under the federal renewable fuel standard.

“In fact, as it was designed, the RFS and EPA’s consistent implementation of the law is the fundamental policy driver for the continued development of U.S. biofuels, particularly advanced and cellulosic biofuels,” stated BIO in its letter to Jackson. “It provides industry and investors with the confidence of knowing that if they can produce advanced and cellulosic biofuels, the RFS will ensure market access for those types of fuels. The technology for cellulosic biofuels is ready, but commercialization has been slowed by the economic downturn and the accompanying lack of financing. Stability of policy, therefore, is crucial for the industry’s pathway to commercialization.”

AEC wrote, “We are well aware that the commercialization of cellulosic biofuels is behind the schedule set forth by the federal RFS. However, Congress anticipated the inevitable uncertainties and variability inherent with the commercialization of new technologies and set up a credit waiver system to account for variances from the established schedule for advanced biofuels.” AEC detailed three observations in its letter: 1) the petitioners seem to misunderstand the purpose of the federal RFS; 2) the petitioners have, in essence, asserted that the compliance marketplace is devoid of any options to avoid a payment of $6.78 million for waiver credits; and 3) Congress in 2007 called on the advanced biofuel industry to ramp up commercialization of the most innovative fuels in the world. See details of these observations here. Read the BIO letter here