The USDA on June 9 announced the U.S. Forest Service is investing a combined $43 million in 123 projects through the Community Wood Grants and Wood Innovations Grants programs, which promote innovation in wood products and renewable wood energy economies. Several Wood Innovations Grants support bioenergy projects. For wood pellets specifically, in Kentucky, Dunaway Timber Company was awarded $300,000 to support a wood pellet plant, and in Oregon, Wisewood Energy was awarded $699,161 to support an expansion of wood pellet and brick production to service the state&rsquo;s bulk wood fuels market. The U.S. exported 720,209 metric tons (MT) of wood pellets in April, down from 909,787 MT exported the previous month, but up over 61,000 MT when compared to April 2022, according to data released by the USDA Foreign Agricultural Service on June 7.&nbsp;&nbsp;&nbsp; The U.S. exported wood pellets to more than a dozen countries in April. The U.K. was the top destination for U.S. wood pellet exports at 348,724 MT, followed by the Netherlands at 228,318 MT and Japan at 106,706 MT. The value of U.S. wood pellet exports was $129.17 million in April, down from both $169.43 million in March and $145.41 million in April 2022. Total wood pellet exports for the first four months of the year reached 2.9 million MT at a value of $531.25 million, compared to 2.74 million MT exported during the same period of last year at a value of $458.1 million. Spain produced a record 768,000 metric tons (MT) of wood pellets in 2022, according to a report filed with the USDA Foreign Agricultural Service&rsquo;s Global Agricultural Information Network. Domestic consumption and exports were also up when compared to 2021. According to the report, Spain is among the top 10 producers of wood pellets in the European Union but has not been a top consumer of wood pellets. Domestic consumption, however, increased last year, primarily due to higher residential use and improved competitiveness against alternative energy sources. Biomass tax reductions and incentives to install biomass stoves and boilers also helped boost consumption, although incentives for biomass consumption are relatively low when compared to other EU member states. According to the report, Spain had 83 operational pellet plants last year, up from 75 in 2021. Total capacity is estimated at 2 million MT per year. Total pellet production in Spain is estimated at approximately 768,000 MT in 2022. In addition to wood, pellets are also produced from olive kernels, tree nutshells, and sunflower kernels, with total pellet production estimated at approximately 2 million MT last year. Spain is a net exporter of wood pellets, with exports largely exceeding imports. According to the report, expanding pellet demand in other EU member states, combined with a shortage of wood pellets to supply to the EU from Ukraine and Russia, as well as the impacts of measures against Russia, has triggered a steep increase in Spain&rsquo;s pellet sales in EU countries. The report estimates that exports were at approximately 200,000 MT last year. Pellets imported into Spain largely come from neighboring Portugal, according to the report. Drax Group plc announced it has selected two sites in the U.S. to build new bioenergy with carbon capture and storage (BECSS) projects. The company is also developing an option for a project to add BECCS to an existing pellet plant in Louisiana. Over the past two years, Drax said it has been progressing a number of work streams to develop options for BECCS, with a primary focus on North America. According to the company, it has continued to develop plans for a new-build BECCS power unit capable of producing c.2TWh of electricity from sustainable biomass and capturing c.3Mt of carbon annually. Two initial sites located in the U.S. South have been selected and are progressing to option, according to Drax. Drax estimates total investment would be approximately $2 billion per plant, with a final investment decision (FID) targeted for 2026. The facilities could be operational as soon as 2030. The new-build BECCS projects would enable a wider choice of biomass materials, including wood chips. Drax said it is also continuing to evaluate nine additional BECCS sites in North America. To support the development of North American BECCS projects, Drax has hired 80 employees in the U.S. and Canada and is working to establish a global BECCS headquarters in Houston, Texas. The proposed project to add BECCS capabilities to an existing pellet plant would have the capacity to capture more than 100,000 metric tons of carbon dioxide per year from the pelleting process. The project has a projected capital cost of $150 million, according to Drax. The company is targeting FID for the BECCS pellet project in 2024 or 2025, with commissioning expected to begin as soon as 2026. The Vermont House on May 11 voted 107 to 42 to override Gov. Phil Scott&rsquo;s veto of the Affordable Heat Act, which is designed to affordably reduce greenhouse gas (GHGs) in the state&rsquo;s thermal sector through efficiency, weatherization measures, electrification and decarbonization. The bill was introduced in January and was passed by both houses of the Vermont legislature this spring. Scott vetoed the legislation on May 5. He, in part, cited concerns over costs to consumers, particularly provisions of the bill that will raise the costs of fuel oil. The Vermont Senate voted 20 to 10 to override the veto on May 9, followed by the House. The new law establishes a Clean Heat Standard under which obligated parties are required to reduce GHGs attributable to the state&rsquo;s thermal sector by retiring required amounts of clean heat credits to meet required GHG reductions of the thermal portion of Vermont&rsquo;s Global Warming Solutions Act, which was enacted in 2020. The Affordable Heat Act lists advanced wood heating and sustainably sourced biofuels as two of several eligible clean heat measures that can be used to generate credits under the program. Aemetis Inc., a renewable natural gas and renewable fuels company focused on negative carbon intensity products, announced June 5 that its Aemetis Biogas subsidiary generated federal D3 renewable identification numbers from the U.S. EPA under the Renewable Fuel Standard for the first time, and has filed to generate California Low Carbon Fuel Standard credits for renewable natural gas (RNG) that was delivered to heavy transportation customers starting in late May 2023. The Aemetis Biogas project is managed by a recently installed Allen Bradley Decision Control System with artificial intelligence (AI) energy and process management capabilities.&nbsp; The integrated, on-site and remote management of the Aemetis Biogas network of dairy digesters supports the rapid addition of dairy digesters to the 40-mile Aemetis pipeline and biogas-to-RNG system with utility interconnect. The Aemetis Biogas network of dairy digesters in California&rsquo;s Stanislaus and Merced counties, and the AI Decision Control System, are partially funded by more than $25 million in grants awarded by the California Department of Food &amp; Ag, California Energy Commission, and PG&amp;E. Brightmark RNG Holdings LLC announced five new anaerobic digestion dairy farm RNG projects in western Michigan, designed to convert animal waste to renewable fuels. Brightmark RNG Holdings LLC is a joint venture between Chevron U.S.A. Inc., a subsidiary of Chevron Corp., and Brightmark Fund Holdings LLC, a subsidiary of Brightmark LLC. The Chevron-Brightmark renewable natural gas joint venture operates a nationwide system of RNG joint venture projects. The Castor Project, which processes manure from one large digester, is Brightmark and Chevron&rsquo;s second-largest RNG project. Other Michigan projects in the joint venture include Meadow Rock, Red Arrow, Willow Point and SunRyz. Including these Michigan projects, the Chevron-Brightmark RNG joint venture has a total of 20 RNG projects across the country. West Biofuels LLC began construction of a 3-MW bioenergy plant in Burney, California, that will convert forest waste and sustainably sourced wood to renewable electricity, heat and biochar. The bioenergy facility is owned by Hat Creek Bioenergy LLC, developed in collaboration with West Biofuels LLC&rsquo;s, engineering, procurement and construction management team and local partners, including Fall River Resource Conservation District. The biomass feedstock will be procured from local forest restoration projects resulting from five years of drought and the related resurgence of bark beetle infestation in fir and pine trees. The bioenergy facility&rsquo;s capital budget is estimated at $25.7 million, and it is expected to be operational in the first quarter of 2024. Sen. Tammy Duckworth, D-Ill., introduced the Sustainable Aviation Fuels Accuracy Act of 2023, a bipartisan bill that aims to identify the standards required to meet the definition of sustainable aviation fuel (SAF) at the Federal Aviation Administration. The bill would require the federal government to adopt the most up-to-date life cycle emissions models, including GREET or successor life-cycle analysis models to GREET. It would also prevent the federal government from picking winners and losers in the SAF market and clarifies that the U.S. government does not encourage the banning of agricultural feedstocks from being utilized as a viable source of SAF. Honeywell announced that bp selected Honeywell&rsquo;s Ecofining technology to help support the production of SAF at five bp facilities across the globe. These facilities include Cherry Point refinery in Blaine, Washington; Rotterdam II refinery in Rotterdam, Netherlands; Lingen refinery in Lower Saxony, Germany; Castell&oacute;n de la Plana refinery in Castell&oacute;n, Spain; and Kwinana Oil refinery in Kwinana, Australia. SAF produced from Honeywell&rsquo;s Ecofining technology is certified for use according to international standards and be used as drop-in replacement without engine modifications, in blends of up to 50% The U.S. EPA on June 21 released its final Renewable Fuel Standard &ldquo;set&rdquo; rule, which includes a modest increase in biomass-based diesel renewable volume obligations (RVOs) for 2024 and 2025. The agency, however, elected not to finalize provisions of the proposed rule related to electric renewable identification numbers (eRINs). For 2023, the EPA has set the total renewable fuel RVO at 20.94 billion gallons, including the nested RVOs of 5.94 billion gallons of advanced biofuel, 2.82 billion gallons of biomass-based diesel, and 840 million gallons of cellulosic biofuel. The agency originally proposed to set the 2023 renewable fuel RVO at 20.82 billion gallons, including the nested volumes of 5.82 billion gallons of advanced biofuel, 2.82 billion gallons of biomass-based diesel, and 720 million gallons of cellulosic biofuel. The final 2023 RVO includes a supplemental RVO of 250 million gallons of renewable fuel that completes the EPA&rsquo;s response to a court remand of the 2016 RFS rule. The final 2024 and 2025 RVOs include modest increases for biomass-based diesel but reduced RVOs for advanced biofuel and cellulosic biofuel. The EPA has set the 2024 RVO for renewable fuel at 21.54 billion gallons, including the nested volumes of 6.54 billion gallons of advanced biofuel, 3.04 billion gallons of biomass-based diesel and 1.09 billion gallons of cellulosic biofuel. The proposed RVOs for 2024 were set at 21.87 billion gallons, 6.62 billion gallons, 2.89 billion gallons and 1.42 billion gallons, respectively. For 2025, the EPA has set the total renewable fuel RVO at 22.33 billion gallons, including 7.33 billion gallons of advanced biofuel, 3.35 billion gallons of biomass-based diesel, and 1.38 billion gallons of cellulosic biofuel. The respective proposed RVOs were 22.68 billion gallons, 7.43 billion gallons, 2.95 billion gallons, and 2.13 billion gallons. Within the final &ldquo;set&rdquo; rule, the EPA attributes reductions in cellulosic RVOs to its decision not to finalize eRIN provisions of the proposed rule that would have allowed electricity generated by eligible biogas-fueled facilities to participate in the RFS program. As proposed in December 2022, the eRIN provisions would have allowed electric vehicle (EV) manufactures to generate electric eRINs based on the light-duty electric vehicles they sell by establishing contracts with parties that produce electricity from qualifying biogas. Some representatives of the U.S. biogas and biofuel industries lobbied against this approach, arguing that biogas electricity producers are the parties that should generate eRINs&mdash;in line with how liquid biofuel producers generate renewable identification numbers (RINs) under the RFS. In the rule, the EPA indicates that stakeholder positions on the proposed rule&rsquo;s eRIN provisions varied greatly, with some stakeholders strongly supportive of the proposed provisions, some who sought significant modifications to the program while remaining broadly supportive of eRINs conceptually, and others who opposed moving forward with any type of eRIN framework. &ldquo;In light of the significant number of comments provided by stakeholders on EPA&rsquo;s proposed eRIN approach, and the complexity of many of the topics raised in those comments, and the consent decree deadline on other portions of the rule, we are not finalizing the proposed revisions to the eRIN program at this time,&rdquo; the EPA said in the final rule. &ldquo;We have adjusted the final volume requirements for this rulemaking to reflect this decision.&rdquo; &ldquo;Given strong stakeholder interest in the proposed eRIN program and the range of potential benefits that the program could provide, EPA will continue to work on potential paths forward for the eRIN program,&rdquo; the agency added. Within the rule, the EPA also addresses its decision to maintain its proposed 2023 RVO for biomass-based diesel and include only modest increases to the 2024 and 2025 biomass-based diesel RVOs. The rule cites U.S. Energy Information Administration data that projects U.S. renewable diesel production capacity could reach nearly 6 billion gallons by 2025, but cautions that some of those projects may not be completed, and the ones that are won&rsquo;t necessarily produce renewable diesel in the 2023-&lsquo;25 timeframe addressed by the &ldquo;set&rdquo; rule. The EPA also discusses concerns over feedstock limitations that could result in renewable diesel and biodiesel facilities operating at below capacity, noting that competition for qualifying feedstocks could also reduce in reductions in biodiesel production if larger renewable diesel facilities are able to out-complete smaller biodiesel producers for feedstock. The EPA also points to the structure of the RFS program&rsquo;s nested RVOs in justifying its decision.&nbsp; According to the agency, it believes that excess volumes of biomass-based diesel beyond the biomass-based diesel RVOs will be used to satisfy the advanced biofuel RVOs, within which the biomass-based diesel volume requirement is nested. &ldquo;We also believe it is important to maintain space for other advanced biofuels to participate in the RFS program,&rdquo; the EPA said in the rule. &ldquo;Although the [biomass-based diesel] industry has matured over the past decade, the production of advanced biofuels other than biodiesel and renewable diesel continues to be relatively low and uncertain. Maintaining this space for other advanced biofuels can, in the long-term, facilitate increased commercialization and use of other advanced biofuels, which may have superior environmental benefits, avoid concerns with food prices and supply, and have lower costs relative to [biomass-based diesel]. Conversely, we do not think increasing the size of this space is necessary through 2025 given that only small quantities of these other advanced biofuels have been used in recent years relative to the space we have provided for them in those years.&rdquo; The final rule also includes a variety of other regulatory changes that the EPA said aim to strengthen its implementation of the RFS program. This includes modification of regulatory provisions for biogas-derived renewable fuels to ensure that biogas is produced from renewable biomass and used as a transportation fuel and allow for the use of biogas as an biointermediate; enhancements to third-party oversight provisions, including engineering reviews, the RFS quality assurance program, and annual attest engagements; establishing a deadline for third-party engineering reviews for three-year registration updates; updating procedures for the apportionment of RINs when feedstocks qualifying for multiple D-codes are converted to biogas simultaneously in an anaerobic digester; revising the conversion factor in the formula for calculating the percentage standard for biomass-based diesel to reflect increasing production volumes of renewable diesel; flexibility for RIN generation; reiterating the prohibition on generating RINs not used in the covered location; flexibilities for the generation and maintenance of records for waste feedstock; clarifying the definition of fuel&nbsp; used in ocean-going vessels; modifications to the bonding requirements for foreign parties that participate in the RFS program; and other minor changes and technical corrections. In general, representatives of the U.S. biofuels industry are criticizing the final &ldquo;set&rdquo; rule, describing it as a missed opportunity and disappointment.

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Upcoming Events

National Carbon Capture Conference & Expo

2024 International Biomass Conference & Expo

2024 International Fuel Ethanol Workshop & Expo

Biodiesel Summit: Sustainable Aviation Fuel & Renewable Diesel

Carbon Capture & Storage Summit

Biomass News Roundup