“Clean Coal”, RFS2, BCAP, BIWG, Carbon Capture and Storage Task Force

At a meeting with a bipartisan group of governors from around the country, President Barack Obama yesterday laid out three measures intended to work in concert to boost biofuels production and reduce US dependence on petroleum. First, the Environmental Protection Agency (EPA) finalized the Renewable Fuel Standard Program (RFS2) rule to implement the long-term renewable fuels standard of 36 billion gallons by 2022 established by Congress and also issued the targets for 2010. Second, the US Department of Agriculture proposed a rule on the Biomass Crop Assistance Program (BCAP) that would provide financing to increase the conversion of biomass to bioenergy. Third, the President’s Biofuels Interagency Working Group (BIWG) released its first report: Growing America’s Fuel.

That report, authored by group co-chairs, Agriculture and Energy Secretaries Vilsack and Chu, and EPA Administrator Jackson, lays out a strategy to advance the development and commercialization of a sustainable biofuels industry to meet or exceed the nation’s biofuels targets. In addition, President Obama issued a Presidential Memorandum creating an Interagency Task Force on Carbon Capture and Storage to develop a comprehensive and coordinated federal strategy to speed the development and deployment of advanced lower-emission coal technologies.

One of the things that we’re going to be talking about today is investing in the kind of technology that will allow us to use coal, our most bountiful natural resource here in the United States, without polluting our planet.

It’s been said that the United States is the Saudi Arabia of coal—and that’s because, as I said, it’s one of our most abundant energy resources. If we can develop the technology to capture the carbon pollution released by coal, it can create jobs and provide energy well into the future. So today I’m announcing a Carbon Capture and Storage Task Force that will be charged with the goal of figuring out how we can deploy affordable clean coal technology on a widespread scale within 10 years. And we want to get up 10 commercial demonstration projects, get those up and running by 2016.

We’re also going to be talking about some developments we’re making on biofuels, so that more folks can start filling up their cars and trucks with cleaner, American-grown fuels. By 2022, we will more than double the amount of biofuels we produce to 36 billion gallons, which will decrease our dependence on foreign oil by hundreds of millions of barrels per year. We’re also working to make sure that we can start turning things like plants and woodchips into heat, power, and biofuels, and that will create new economic opportunities for rural communities. And our biofuels working group is releasing its first report that details the government’s strategy for supporting the biofuels industry.

President Obama

Renewable Fuels Standard (RFS2). EPA, under the Energy Independence and Security Act of 2007 (EISA), is responsible for revising and implementing regulations to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel. The Renewable Fuel Standard program (RFS2) will increase the required volumes of renewable fuel to 36 billion gallons by 2022.

The revised statutory requirements establish new specific annual volume standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel that must be used in transportation fuel. The revised statutory requirements also include new definitions and criteria for both renewable fuels and the feedstocks used to produce them, including new greenhouse gas (GHG) emission thresholds as determined by lifecycle analysis. The regulatory requirements for RFS will apply to domestic and foreign producers and importers of renewable fuel used in the US.

The EPA also set the 2010 RFS volume standard at 12.95 billion gallons (bg), or 8.25% of fuel. Further, for the first time, EPA is setting volume standards for specific categories of renewable fuels including cellulosic, biomass-based diesel, and total advanced renewable fuels. For 2010, the cellulosic standard is being set at 6.5 million gallons (mg), or 0.004% of total fuel; and the biomass-based diesel standard is being set at 1.15 bg, (combining the 2009 and 2010 standards as proposed), or 1.10% of total fuel.

The 2010 cellulosic fuel level is significantly less than the 100 million gallons set forward in EISA for 2010, reflecting current capabilities; however, EPA notes that a number of companies and projects appear to be poised to expand production over the next several years. Since the cellulosic standard is lower than the EISA level, EPA will make cellulosic credits available to obligated parties for end-of-year compliance, should they need them, at a price of %1.56 per gallon. EPA said it will issue a notice of proposed rulemaking (NPRM) each spring and a final rule by 30 November of each year to set the renewable fuel standards for each ensuing year.

A significant aspect of the RFS2 program is the requirement that the lifecycle GHG emissions of a qualifying renewable fuel must be less than the lifecycle GHG emissions of the 2005 baseline average gasoline or diesel fuel that it replaces. Four different levels of reductions are required for the four different renewable fuel standards:

Lifecycle GHG Thresholds Specified in EISA
(Percent reduction from 2005 baseline)
Renewable fuel 20%
Advanced biofuel 50%
Biomass-based diesel 50%
Cellulosic biofuel 60%

As mandated by EISA, the greenhouse gas emissions assessments must evaluate the aggregate quantity of greenhouse gas emissions (including direct emissions and significant indirect emissions such as significant emissions from land use changes) related to the full lifecycle, including all stages of fuel and feedstock production, distribution and use by the ultimate consumer.

Based on the EPA’s current modeling of specific fuel pathways, which incorporated comments received through the third-party peer review process, and data and information from new studies and public comments, EPA has determined that:

  • Ethanol produced from corn starch at a new (or expanded capacity from an existing) natural gas-fired facility using advanced efficient technologies that we expect will be most typical of new production facilities complies with the 20% GHG emission reduction threshold.

  • Biobutanol from corn starch complies with the 20% GHG threshold.

  • Ethanol produced from sugarcane complies with the applicable 50% GHG reduction threshold for the advanced fuel category.

  • Biodiesel from soy oil and renewable diesel from waste oils, fats, and greases complies with the 50% GHG threshold for the biomass-based diesel category.

  • Diesel produced from algal oils complies with the 50% GHG threshold for the biomass-based diesel category.

  • Cellulosic ethanol and cellulosic diesel (based on currently modeled pathways) comply with the 60% GHG reduction threshold applicable to cellulosic biofuels.

The EPA said that its technical judgment indicates certain other pathways are likely to be similar enough to modeled pathways that it is also assured these similar pathways qualify.

Biomass Crop Assistance Program. USDA has proposed a rule for Biomass Crop Assistance Program (BCAP) to convert biomass to bioenergy and bio-based products. USDA provides grants and loans and other financial support to help biofuels and renewable energy commercialization. BCAP has already begun to provide matching payments to folks delivering biomass for the collection, harvest, storage, and transportation of biomass to eligible biomass conversion facilities.

Biofuels Working Group In May, President Obama established the Biofuels Interagency Working Group—co-chaired by USDA, DOE, and EPA, and with input from many others—to develop a comprehensive approach to accelerating the investment in and production of American biofuels. (Earlier post.) The report, Growing America’s Fuel, suggests a highly focused supply chain approach to assure that all phases of development (research, pilot-scale demonstration, commercialization, and distribution to customers) complement each other, optimizes government investments, and leads to commercially viable farms and companies that sustainably produce supplies of biofuels. The new approach requires strong management for results using a regional supply chain systems approach.

The report proposes establishing Lead Agency responsibilities for each supply chain segment. The responsibilities for each segment of the supply chain are based on the core competencies and resources of participating federal departments:

  • Discovery Science – DOE (Office of Science). Provide discovery science inquiry that focuses on longer-term, advanced biofuels breakthroughs.

  • Feedstock Development – USDA (Research, Economics and Education (REE) and Forest Service (FS)). Focus will be on five classes of feedstocks: perennial grasses such as switchgrass, Miscanthus, and mixed native grasses; energy cane, a biomass form of sugarcane; biomass sorghum; oil seed crops and algae, including canola and camelina oil seeds; and woody biomass from fast-growth trees and wood residues. USDA will coordinate with DOE to enhance work underway through DOE’s Regional Feedstock Partnerships and the Bioenergy Research Centers.

  • Feedstock Production Systems – USDA (REE and FS). Sustainable feedstock production and harvest systems designed for continued high performance across a range of geographies that will provide opportunities for contributions from both farm and forestlands, and diversify economic benefits to many rural areas across the country. Economic and environmental issues are addressed up-front and evaluated to ensure sustainable biofuels production.

  • Pilot-scale Conversion and Biorefinery facilities – DOE Energy Efficiency and Renewable Energy (EERE), USDA (REE and FS). Integrated pilot and ten percent of full-scale conversion facilities will be financed to determine suitable technologies for full-scale commercial deployment.

  • Full-scale and Widespread Deployment of Commercial Facilities – USDA (Rural Development (RD) and FS) and DOE. Financing is provided for innovative first time commercial technologies (DOE), the continuation of first generation facilities and the development of first-of-a-kind, scaled-up commercial and multiple-commercial deployed second and third generation conversion facilities (USDA).

  • Regulatory compliance – EPA and USDA. Provide environmental quality monitoring and regulatory compliance to ensure compliance with regulatory statutes to assess the impact of the industry on air and water. EPA and USDA will be responsible as appropriate for oversight, compliance and licensing protocols for biotechnology crops and organisms.

  • Sustainability – EPA and USDA. EPA will provide expertise and leadership in assessing the environmental impacts of development and implementation of feedstock and production options. USDA will assess the impacts on the agricultural economy in the development and implementation of feedstock and production options.

  • Policy support – All departments and agencies.

  • Dissemination of Best Practices and Technical Assistance – USDA/State/Local Extension Offices and partners. New information/technology transfer structures will be developed to target all supply chain components to help ensure new technologies are rapidly utilized. In addition, technical assistance to accessing federal grants and loan programs should be readily and easily available. The DOE Clean Cities program has significant dissemination and outreach capabilities, so it could support infrastructure and end-use deployment.

  • Feedstock Supply Chain Workforce Development – USDA (REE, FS, and RD) and universities. New vocational and higher education programs will be developed to ensure the next generations of crop developers, producers, processors, technicians, engineers, analysts, and economists are available.

  • The Departments of Labor, Commerce, Defense, Transportation and other federal partners can also play important roles in each of these sectors.

This effort will be driven by clearly defined deliverables and milestones. Since technology development and deployment usually takes longer than expected, the 2022 target should be aggressively managed to meet or beat the targets. Each supply chain component will have specific goals that are informed by the rest of the supply chain.

The report recommends continued support on development of first- and second-generation biofuels with additional strong focus on accelerating third generation (drop-in) biofuels development: renewable gasoline, diesel, aviation fuels, and industrial feedstocks.

Presidential Memorandum for a Comprehensive Federal Strategy on Carbon Capture and Storage. President Obama called charting the path toward clean coal essential to achieving his Administration’s clean energy goals, supporting American jobs and reducing emissions of carbon pollution. The President’s memorandum establishes an Interagency Task Force on Carbon Capture and Storage to develop a comprehensive and coordinated federal strategy to speed the development and deployment of clean coal technologies.

The Task Force will be co-chaired by representatives of from DOE and EPA and include participants from at least 9 different agencies and offices. The Task Force shall develop within 180 days a plan to overcome the barriers to the deployment of widespread affordable CCS within 10 years, with a goal of bringing five to ten commercial demonstration projects on line by 2016. The plan should address incentives for CCS adoption and any financial, economic, technological, legal, institutional, or other barriers to deployment. The Task Force should consider how best to coordinate existing federal authorities and programs, as well as identify areas where additional federal authority may be necessary. The Task Force shall report progress periodically to the President, through the Chair of the Council on Environmental Quality.