Eliminating Corn Ethanol Mandate May Hurt Cellulosic Fuel, Report Says

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By Andrew Childers

April 2 — Eliminating conventional corn ethanol from the renewable fuel standard blending mandate could jeopardize efforts to develop advanced cellulosic fuels, a centrist think tank said in an April 2 report.

Companies that produce corn ethanol also account for 80 percent of the cellulosic biofuel industry's commercial production capacity, and eliminating the conventional ethanol mandate from the renewable fuel standard would undermine their ability to invest in new fuel technologies, the group Third Way said in the report, “Cellulosic Ethanol is Getting a Big Boost from Corn, for Now.”

“For the most part, these larger plants have been spearheaded by established companies with a sizeable presence in the corn ethanol industry as producers, suppliers, or service providers,” the report said.

The report comes after the introduction of bills in both houses of Congress to strip the corn ethanol mandate out of the annual renewable fuel standard blending requirements, leaving only the requirement that petroleum refiners blend advanced biofuels such as cellulosic ethanol into their products.

Calls to repeal the renewable fuel standard have intensified after the Environmental Protection Agency failed to issue a final rule for 2014. The agency also missed the deadline to issue standards for 2015. Instead, the EPA said it plans to issue standards for 2014, 2015 and 2016 this year in an effort to get the program back on its statutory deadlines.

Bills Target Corn Ethanol 

Sens. Pat Toomey (R-Pa.) and Dianne Feinstein (D-Calif.) introduced the Corn Ethanol Mandate Elimination Act (S. 577), and Rep. Bob Goodlatte (R-Va.) introduced the RFS Reform Act (H.R. 704) to cap the amount of ethanol allowed in gasoline at 10 percent and eliminate the renewable fuel standards's corn ethanol blending mandate.

Cellulosic ethanol exceeded the EPA's projections for the first time in 2014, largely due to a rule change that reclassified millions of gallons of advanced biofuels being produced from compressed and liquefied natural gas from landfills and wastewater treatment as cellulosic ethanol, but still lagged well behind the amounts required by the Energy Independence and Security Act (Pub. L. No. 110-140).

However, eliminating the corn ethanol mandate would not necessarily spur growth in advanced biofuels such as cellulosic ethanol, Third Way said.

“While proposals to gut only the corn section of the RFS may not be intended to endanger the development of cellulosic ethanol, this is exactly what would occur,” Third Way said in its report. “Given the nuances of current fuel markets and how they interact with the RFS, these proposals will discourage cellulosic ethanol investment by companies with a large stake in corn ethanol—the very companies that are helping to commercialize this long-sought fuel.”

To contact the reporter on this story: Andrew Childers in Washington at achilders@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com