RFS2 reduces 2010 cellulosic ethanol requirement

By Lisa Gibson
Posted February 3, 2010, at 4:22 p.m. CST

The new requirement for cellulosic biofuel production in 2010 is reduced to 6.5 million ethanol--equivalent gallons in the renewable fuels standard (RFS2), down significantly from the 100 million gallons established in RFS1, included in the Energy Policy Act of 2005. The U.S. EPA released final RFS2 rules Feb. 3 as media outlets, producers and others scrambled to find out how it will affect their industries.

While the required total volume of renewable fuels produced this year remains the same at 12.95 billion gallons, changes within the requirements for different types of fuels are drastic. Good news came for the biodiesel industry, as the requirement for a new biomass-based diesel program jumped to 1.15 billion gallons, a combination of standards for 2009 and 2010, to be applied in 2010.The advanced biofuel requirement remains the same at 950 million gallons.

The new cellulosic biofuel standard is based on an updated market analysis considering detailed information from pilot and demonstration-scale plants, an Energy Information Administration Analysis, and other publically and privately available market information, according to the EPA. While 6.5 million shows a drastic reduction, a number of companies appear poised to expand over the next several years, it added.

"We see it as a positive change," said Jennifer Hutchins, spokeswoman for DuPont Danisco Cellulosic Ethanol (DDCE), which opened a demonstration plant in Vonore, Tenn., at the end of January. "As a leading player in cellulosic ethanol, we're glad the standard has changed. Obviously, the industry wasn't going to meet that 100 million-gallon mandate." The plant runs on corncobs now, but will transition to 100 percent switchgrass over the next year.

"I think it's a great change," said Arnold Klann, CEO of California-based BlueFire ethanol, which focuses on producing cellulosic ethanol from waste. "It was very clear our industry couldn't meet the standard set for this year." He added that the new goal is easily achievable and was a good decision.

Fortunately, changes to the greenhouse gas (GHG) modeling mean all classes of biofuels meet the RFS GHG reduction goals. According to the RFS2 Lifecycle Greenhouse Gas Analysis, ethanol from switchgrass reduces GHG emissions by a stunning 110 percent through biochemical conversion and 72 percent through thermo-chemical processes. That was no surprise to DDCE. "We have known about the greenhouse gas reduction potential of switchgrass," Hutchins said. "That's one of the reasons we work with it." Ethanol from corn stover reduces emissions by 130 percent through biochemical conversion and 93 percent thermochemical. That means both meet the 60 percent GHG reduction requirement in EISA for cellulosic biofuels.

Ethanol from sugarcane also meets the standard, reducing GHG emissions by 61 percent. "EPA's reaffirmation of sugarcane ethanol's superior GHG reduction confirms that sustainably-produced biofuels can play an important role in climate mitigation," said Joel Velasco, chief representative in Washington for the Brazilian Sugarcane Industry Association (UNICA). "Sugarcane ethanol is a first generation biofuel with third generation performance."

Biomass-based diesel must meet a 50 percent reduction standard to qualify for the RFS2. The National Biodiesel Board welcomed the RFS2 almost immediately after its release. The new rules, specifically the implementation of the biomass-based diesel program, will help America reap existing benefits in job creation, energy security and the environment, according to Joe Jobe, NBB CEO. "The U.S. biodiesel industry stands ready to provide the fuel that will be needed to meet the readily-attainable biomass-based diesel goals established in the RFS2," he said. "We look forward to working with all industry stakeholders to successfully implement this worthwhile program."

The EPA also mentioned five categories of feedstock that are expected to have less or no indirect land use changes, including crop residues such as corn stover, wheat straw, rice straw, citrus residues; forest material such as eligible forest thinning and solid residue remaining from forest product production; secondary annual crops planted on existing crop land; separated food and yard waste; and perennial grasses including switchgrass and miscanthus.

RFS2 rules were originally scheduled for release Jan. 1, 2009, but inclusion of new elements pushed it back. It expands the scope of the program and lays out the strategy for reaching the RFS of 36 billion gallons by 2022. Currently, the country is not on track to meet that goal, as only about 12 billion gallons of biofuels are produced annually. President Obama's biofuels initiative, also released Feb. 3, states that the goals will be met by supporting the existing biofuels industry, while accelerating the commercial establishment of advanced biofuels by increasing communication and having a strategic plan across the U.S. government, and by employing strategic public-private partnerships.

"We welcome the commitment of the President to continue growing the domestic ethanol industry. He correctly noted that producing home-grown ethanol creates jobs in America at a time America most needs them," Poet LLC CEO Jeff Broin said. "However we are concerned that some pieces of the rules put out by EPA today run contrary to that stated effort. Although the international indirect land use change penalty has been lessened somewhat, EPA still relied on the disproven theory when all of the data shows that ethanol production continues to improve and isn't requiring new land." South Dakota-based Poet produces corn-based and cellulosic ethanol from corncobs.

"The final rule announced today by the EPA highlights the fact that-even with assumptions about international land use change-advanced biofuels can significantly reduce and reverse growth of U.S. greenhouse gas emissions from transportation," said Brent Erickson, executive vice president of Biotechnology Industry Organization's Industrial Environmental Section. "Advanced biofuels are a key to creating new jobs and revitalizing the U.S. economy. ... Development of the advanced biofuels industry could produce hundreds of thousands of new green jobs and contribute more than $140 billion in economic growth by 2030."

To see the RFS2 rule go to http://www.epa.gov/OMS/renewablefuels/.