Congress, Biden Administration Look toward Biofuels to Help Combat Climate Change
With the Biden administration and a Democratic Congress beginning a concerted effort to combat climate change, biofuels are increasingly coming into focus.
Biofuels are any fuel that is derived from biomass—that is, plant or algae material or animal waste. Since such feedstock material can be replenished readily, biofuel is considered a renewable energy source, unlike fossil fuels such as petroleum, coal and natural gas. Biofuels burn cleaner than fossil fuels, and release fewer pollutants and greenhouse gases, such as carbon dioxide, into the atmosphere
Many crops, known as energy crops, are used to make biofuels, including wheat, corn, soybean and sugarcane, but biofuels also can be made using waste materials. In the United States, corn is the primary energy crop, with over 40 percent of the nation’s corn crop used for ethanol, according to Scientific American.
Because biofuels are cleaner and the use of energy crops provides a big market for American farmers, both Republican and Democratic administrations and Congress have pushed biofuel use to help meet U.S. transportation fuel needs for over a decade.
Ethanol and Biodiesel are Key Biofuels
The two most common types of biofuels in use today are ethanol and biodiesel, both of which represent the first generation of biofuel technology.
There are two main biofuels in the United States – ethanol and biodiesel. The most common blend of ethanol is E10 (10% ethanol, 90% gasoline). Some vehicles, called flexible fuel vehicles, are designed to run on E85 (a gasoline-ethanol blend containing 51%–83% ethanol, depending on geography and season), an alternative fuel with much higher ethanol content than regular gasoline. Roughly 97% of gasoline in the United States contains some ethanol.
The common method for converting biomass into ethanol is called fermentation. During fermentation, microorganisms (e.g., bacteria and yeast) metabolize plant sugars and produce ethanol.
Biodiesel is a liquid fuel produced from renewable sources, such as new and used vegetable oils and animal fats and is a cleaner-burning replacement for petroleum-based diesel fuel. Biodiesel is nontoxic and biodegradable and is produced by combining alcohol with vegetable oil, animal fat or recycled cooking grease.
Like petroleum-derived diesel, biodiesel is used to fuel compression-ignition (diesel) engines. Biodiesel can be blended with petroleum diesel in any percentage, including B100 (pure biodiesel) and, the most common blend, B20 (a blend containing 20% biodiesel and 80% petroleum diesel).
Liquid terminals are a critical logistics component in getting biofuels to the market, by storing and blending and helping to facilitate transportation.
EPA Reverses Course on Granting Biofuel Waivers to Refineries
The new Biden administration seems to want to ensure the use of biofuels. The Biden EPA in late February said it would support the ethanol industry in a lawsuit over biofuel waivers granted to oil refineries under President Donald Trump’s administration. EPA said it was reversing course and would support a January 2020 decision by the Denver-based 10th U.S. Circuit Court of Appeals in a lawsuit filed by the Renewable Fuels Association and farm groups. The lawsuit is headed to arguments before the U.S. Supreme Court, probably in April.
Federal law requires refiners to blend billions of gallons of biofuels in the nation’s gasoline supply or buy credits from refineries that do the blending. Refineries can seek waivers if they can show that meeting the ethanol quotas would create a financial hardship for their companies.
The appeals court concluded the EPA improperly granted exemptions to refineries that didn’t qualify. The court said that refineries should be granted waivers only as extensions, but most refineries seeking exemptions had not continuously received them year after year. The decision effectively limited the EPA’s ability to grant most exemptions. Two refineries appealed the decision to the Supreme Court.
While Trump had promised to back policies that helped agriculture, his EPA approved sharp increases in the waivers, helping oil refiners and dampening demand for corn-based ethanol.
The EPA under Trump issued 85 retroactive small refinery exemptions for the 2016-2018 compliance years, undercutting the renewable fuel volumes by a total of 4 billion gallons, (15.1 billion liters), according to the Renewable Fuels Association.
Roughly a month after President Joe Biden took office, his EPA reversed the federal government’s stand, saying the EPA agrees with the appeals court that the exemption was intended to operate as a temporary measure.
Biofuels and farm advocates applauded the decision.
Lawmakers Seek Additional Support for Biofuels Industry
Meanwhile in Congress, Iowa Senator Chuck Grassley, along with Democratic Senator Amy Klobuchar of Minnesota and eight of their Senate colleagues, sent a letter in March to U.S. Secretary of Agriculture Tom Vilsack, urging USDA to assist biofuel producers hurt by the COVID-19 pandemic.
In the letter, the senators called on the U.S. Department of Agriculture to make biofuels producers eligible for existing CCC funding. “We have been advocating for targeted relief for the biofuels industry since last spring when we were first made aware of the demand collapse for ethanol and other renewable fuels due to the COVID-19 pandemic,” the senators wrote. “As you know, additional funding was added to the Commodity Credit Corporation (CCC) by the Coronavirus Aid, Relief, and Economic Stabilization (CARES) Act. However, the previous administration argued that congressional intent was not clear with regard to support for biofuels and did not use its discretionary authority to assist biofuels producers through available CCC funding.”
The letter is also signed by Senators Joni Ernst (R-Iowa), Dick Durbin (D-Ill.), John Thune (R-S.D.), Tina Smith (D-Minn.), Deb Fischer (R-Neb.), Roger Marshall (R-Kan.), Mike Rounds (R-S.D.) and Mike Braun (R-Ind.).
Meanwhile, the House Biofuels Caucus introduced two new pieces of legislation in March to increase access to biofuels. One bill, the Renewable Fuels Infrastructure Investment and Market Expansion Act, seeks to expand access to higher blends of biofuels. Another, called the Adopt GREET Act, would direct the Environmental Protection Agency to update its greenhouse gas modeling for ethanol and biodiesel, ensuring that federal regulators consider how biofuels lower greenhouse gas emissions.
The Renewable Fuel Infrastructure Investment and Market Expansion Act would authorize $500 million over five years for infrastructure grants for fuel retailers and direct the EPA Administrator to finalize a proposed rule to repeal E15 labeling requirements warning drivers about the 15 percent ethanol fuel’s potential impact on cars, which could deter drivers from using E15. The bill would also direct the EPA administrator to finalize provisions from the same proposed rule to allow certain existing Underground Storage Tanks to store higher blends of ethanol.
The Adopt GREET Act would require the EPA to update its greenhouse gas modeling for ethanol and biodiesel by requiring the EPA to adopt the Argonne National Lab’s Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) Model for both fuels. EPA would then be required to update its modeling every five years or report to Congress to affirm its modeling is current or otherwise explain why no updates were made.
Both pieces of legislation are supported by the National Corn Growers Association, the Renewable Fuels Association and the American Coalition for Ethanol.
EIA Expands Reporting of Biofuels Capacity
With the renewed push toward cleaner fuels, the U.S. Energy Information Administration said it will release expanded monthly biofuels data through a new report—the Monthly Biofuels Capacity and Feedstocks Update. The first report, released on March 31, contained January 2021 data. EIA, the statistical arm of the U.S. Energy Department, also said it is modifying petroleum and biofuel volumetric balances in the interactive supply and disposition summary data table in its Petroleum Navigator.
“We developed the Monthly Biofuels Capacity and Feedstocks Update because of the significant growth in U.S. production of renewable fuels,” said EIA Acting Administrator Stephen Nalley said in a statement. “The new data will help our data users better track production capacities and feedstock consumption for biofuels, which will increase understanding of the effects of biofuels on the energy industry and our economy.”
As biofuels increasingly plan a role in transportation fuels, the terminal industry will continue to play its part in storing, handling and scheduling flows to ensure that the fuels are delivered to drivers.