Industry execs stress importance of RFS

By Kris Bevill | May 02, 2012

Executives from BP Biofuels, Novozymes, and DuPont Industrial Biosciences held a conference call May 1 to reiterate the importance of the renewable fuel standard (RFS) to the developing cellulosic biofuel industry and stressed that modification of the policy could severely damage the industry just as it is reaching commercialization.

“We are at an early stage and showing instability creates difficulties in terms of continuing to get support for investments,” BP Biofuels North America President Sue Ellerbusch said. She indicated that modifying or eliminating the RFS would not only scare off outside investors, but could also make it unlikely for some industry players, including BP, to continue funding their own projects.

The 2007 legislative approval of the RFS prompted BP’s entry into the biofuels industry and it has invested heavily in cellulosic biofuels technology. It currently operates a 1.4 MMgy demonstration-scale cellulosic ethanol facility in Jennings, La., employs hundreds of scientists and engineers to develop production processes, and is constructing a feedstock farm in Highlands County, Fla., for a planned $400 million, 36 MMgy energy cane-to-ethanol facility which is expected to undergo construction beginning this fall. “We’re spending our own equity money to do this and we need to see that there will be a market to invest in,” Ellerbusch said.

DuPont Industrial Biosciences is also planning to begin building its first commercial-scale cellulosic facility this year –a 28 MMgy corn stover-to-ethanol plant in Nevada, Iowa. Jan Koninckx, global director of biofuels at DuPont said the RFS is responsible for spurring DuPont to scale up its technology. The company has operated a demonstration-scale facility in Vonore, Tenn., since 2009. Despite increasing warnings that the RFS will soon present obligated parties with unattainable goals, Koninckx said he does not think the policy should be modified. “We shouldn’t to anything premature,” he said. “We see [the RFS] as feasible and realistic and doable, particularly considering the [U.S.] EPA has the tools to manage the mandate and to use their regulatory tools to match supply and demand,” he said.

The 2012 RFS volume requirement, as finalized in late December by the EPA, totals 15.2 billion gallons. Of that total, 1 billion gallons has been carved out for biomass-based diesel, 2 billion gallons for advanced biofuels (a category which includes fuels such as biodiesel, renewable diesel and sugarcane ethanol) and 8.65 million gallons for cellulosic biofuels. The EPA has the authority to temporarily waive the RFS or to reduce the mandated volumes, as it has done repeatedly for the cellulosic biofuels category.

Petroleum groups and some members of Congress suggest that legislative changes should be made to the policy, but Adam Monroe, president of Novozymes, North America, said that would be a mistake. “I would rather live with whatever imperfections people might find in that and keep it there for stability purposes than to open up a debate that takes who knows how long and goes in what directions,” he said. The RFS prompted Novozymes to embark on the largest research and development project in the company’s history, according to Monroe, and the company will soon open a $200 million enzyme manufacturing facility in Nebraska which will service biofuels producers. “The impacts from the renewable fuel standards are obvious—it has provided jobs, it has provided innovation and, most importantly, it’s providing a solution to the American public as it relates to transportation fuel that is lower cost and is cleaner,” he said.