Cellulosic producers comment on RFS2 target

By Kris Bevill | August 27, 2010
Posted Aug. 27, 2010

The comment period has ended for the U.S. EPA's 2011 proposed renewable fuel standards and it appears that most producers agree that the agency's proposal to lower next year's cellulosic biofuels target to between 5 and 17.1 million gallons is an accurate goal. However, several producers submitted comments stating that continued lowering of the RFS2 mandate could severely hamper the expansion of cellulosic ethanol production.

The EPA didn't include Soperton, Ga.-based Range Fuels Inc. as one of next year's cellulosic ethanol producers in its proposed rule. In a comment filed with the agency, Bill Schafer, Range Fuels senior vice president of business development and government affairs, said the EPA committed an error in omitting Range Fuels from its list and stated that the company will indeed be producing cellulosic ethanol as early as later this year. "The EPA never contacted Range Fuels in 2010 to discuss plans for producing cellulosic biofuels from its Soperton Plant in 2011," Schafer said in his comment, adding that the EPA's information regarding the plant was inaccurate.

According to Schafer's comment to the EPA, the first phase of construction at the Soperton facility was completed in the first quarter of this year and it will begin producing cellulosic methanol this quarter using wood chips as a feedstock. Range Fuels will also experiment with other types of woody biomass, miscanthus and switchgrass as feedstocks and will begin commissioning the plant to produce ethanol in September. "The company plans to begin producing fuel-grade ethanol from this system and selling this cellulosic ethanol as a transportation fuel into the gasoline blendstock market in the third quarter 2010 following commission," Schafer stated. "The company also plans to continue production and sales of fuel-grade ethanol produced by Phase 1 operations into transportation fuel markets in 2011."

Range Fuels communications director Patrick Wright said the company is not yet able to release a specific cellulosic ethanol production volume for 2010-'11. "With a first-of-a-kind technology such as is being used at Soperton we'd expect there to be unique startup and operating challenges not encountered by mature technologies and, as such, it's difficult to predict how much we might produce in 2010 and 2011," he said.

Schafer also suggested in his comment to the EPA that it should reconsider qualifying methanol as a renewable fuel. "If the U.S. is to meet the mandates of the RFS2 program, the EPA should consider expanding the set of transportation fuels qualifying as renewable fuels under RFS2 beyond just ethanol and a handful of other drop-in fuels," he stated. "We have seen this limitation contribute to the EPA's resetting of annual cellulosic biofuels mandates for 2010 and 2011 far below originally established levels, which we believe only diminishes confidence among the public and investment community in the country's ability to produce cellulosic biofuels that meaningfully contribute to reducing our dependence on foreign oil supplies and to lowering greenhouse gas production from transportation fuels."

Christopher Standlee, executive vice president of Abengoa Bioenergy U.S. Holding Inc., said in his comment that Abengoa believes the EPA's estimate for a reduced cellulosic biofuel volume next year is accurate. However, Abengoa is concerned that ongoing reductions in the mandate will weaken support for cellulosic ethanol. "If the RFS is not treated as a true mandate and does not receive consistent governmental support, then financing and construction of new biorefineries will become even more difficult, and the entire industry will suffer," he stated. Standlee recommended that the EPA also lower the advanced biofuels target for 2011 in order to prevent an influx of imported sugarcane-based ethanol and foreign biodiesel. "We also believe that these foreign-produced fuels will be in short supply and will be difficult to import in the necessary quantities, potentially resulting in a failure to meet the overall advanced biofuels requirement - a result which would be devastating to the entire biofuels industry and to the RFS program as a whole," he said. Starch-based ethanol can fill the gap in advanced biofuels and cellulosic biofuels supplies, according to Standlee, and therefore the EPA should maintain next year's overall mandate of 13.95 billion gallons.

DuPont Danisco Cellulosic Ethanol was listed in the EPA's proposal to contribute 150,000 gallons of cellulosic ethanol to next year's volume. In her comment to the EPA, corporate communications director Jennifer Hutchins thanked the agency for its continued support of DDCE and said the proposed volume range for 2011 appears to be accurate. But while the estimate may be correct, she also expressed DDCE's concern over the continued lowering of the cellulosic target and said it threatens to slow the progress of the entire cellulosic ethanol industry. "The RFS2 program must maintain the volume requirements to continue to drive private investment, ensure that we can meet the long-term production volume requirements, and fulfill EPA and national objectives for renewable fuels, energy security and domestic economic development," Hutchins stated. "The industry is currently entering the commercial build-out phase, and the continual lowering of cellulosic biofuel volumes threatens to push timelines forward even further."

The EPA is scheduled to issue its final 2011 volume requirements in November.