Policy Challenges for Growing the Algae IndustryPolicy Challenges for Growing the Algae Industry
April 2014April 2014
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GHG Emissions are at Historic HighsGHG Emissions are at Historic Highs
Global greenhouse gas emissions rose 2.2% annually in the past decade — nearly twice the annual rate of 1.3% from 1970 to 2000
Fossil fuel combustion and industrial processes accounted for 78% of the emissions' increase between 1970 and 2010
Holding emission increases to 2 degrees celsius above pre-industrial levels will require "heroic efforts" and a "massive" shift in the energy sector
IPCC reports that our climate needs swift shift to clean energy
Source: IPCC WGII “Climate Change 2014: Impacts, Adaptation, and Vulnerability”
Anti-RFS scare tactics have had a negative effect on investment in the renewable fuels sector
This attempt to bully the renewables industry is made worse by the current administration’s lack of support on rule setting—Mixed signals jeopardizes the US’ ability to utilize valuable fuel technologies
We should not let misleading ads and information de-rail our industry and further hinder renewable technologies that benefit our country
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Oil and Gas Interests are Undermining Advanced Biofuel CompaniesOil and Gas Interests are Undermining Advanced Biofuel Companies
Almost half of global biofuels were made in the United States as a direct result of the RFS policy
The EPA’s proposed New Source Performance Standard (NSPS) would create a permanent barrier to integrate with CO2 point sources and prohibit EGU’s from reducing CO2 emissions through recycling
‒ Establishes CCS/EOR, and forecloses all beneficial reuses of CO2
‒ Sec. 111, CAA is a emissions limitation (performance) NOT a technology standard
‒ Foolishly designates one technology to meet the performance standard
‒ Impermissible under Sec. 111, CAA
“Generally, the EPA does not prescribe a particular technological system that must be used to comply with a standard of performance. Rather, sources generally can select any measure or combination of measures that will achieve the emissions level of the standard.”
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EPA Undercuts the Low-Carbon Benefits of Advanced BiofuelsEPA Undercuts the Low-Carbon Benefits of Advanced Biofuels
NPRM for RVO proposes to cut volume requirements for advanced biofuels by more then 40%
In contrast they propose a less than 10% reduction to volume requirements for conventional biofuels
Delivering a material blow to the category of fuels that will deliver the largest reductions in GHG emissions, infrastructure compliant and required by the DoD
One must assume that the administration is playing politics with this nascent industry in order to pay favor for the much larger and more powerful producers of starch ethanol
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Proposed EPA RVO Pulls the Rug out From the Advanced Fuels IndustryProposed EPA RVO Pulls the Rug out From the Advanced Fuels Industry
NPRM for the 2014 RVO asserts that producers of renewable fuel would not be allowed to generate RINs on their production unless the pre-processing of the renewable biomass and final upgrading of the fuels are co-located at the same facility
‒ The rule is not supported by the original legislation and is inconsistent with the practices and methods in which biofuels companies operate
‒ A rulemaking should not be necessary to allow for the generation of RINs under existing pathways for renewable fuels
‒ Existing pathway definitions and RFS reporting and recordkeeping requirements – along with a QAP – will ensure the integrity of renewable fuel produced and RINs generated in this manner
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EPA Proposes to Require Co-Location of Biofuels Companies Who Produce Intermediate Feedstocks EPA Proposes to Require Co-Location of Biofuels Companies Who Produce Intermediate Feedstocks
USDA is on the Way to Cherry Pick Farm to Fleet Winners and LosersUSDA is on the Way to Cherry Pick Farm to Fleet Winners and Losers
With great fanfare and anticipation the Secretary of Agriculture and Navy announced its intention to, “make biofuel blends part of regular, operational fuel purchase and use by the military.
―“The Navy will seek to purchase JP-5 and F-76 advanced drop-in biofuels blended from 10-50% with conventional fuels.”
This announcement will begin regular procurement of fuels from advanced feedstocks that meet JP-5 and F-76 specifications.
CCC support was to be employed to reduce the cost of feedstock production as the industry transitioned from small to larger scale
As it stands today, the USDA seems to be leaning in the direction of picking winner and loser feedstocks for acceptance into the farm to fleet program
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ConclusionConclusion
Any one of the outlined regulatory, policy and political challenges could have a devastating effect on the ability of the advance biofuels industry to achieve critical mass
The administration seems to be asleep at the wheel when it allowed proposal to come from its agencies, any one of which, would completely undercut the Advanced biofuels industry ability to compete with incumbent energy producers
The unrelenting lobbying, politicking and media campaigns being run by the API on behalf of incumbent energy giants is taking a significant toll on this industry
― Is this administration doing whatever it can to help out these carbon intense industries
― The uncertainty in policy has resulted in a record low investment for this industry
The political tone from policy makers, expired tax incentives, RFS repeal rhetoric, etc, is taking a toll on investor confidence, public confidence and left to continue will result in the destruction of the low carbon fuels space or future companies and investments being made in China, India or the Middle East
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