3.5 M new cellulosic RINs in August?!? Or did EPA just sink the 2nd-gen biofuel market?

"I'm happy to be making a contribution to US bioenergy goals."

“I’m happy to be making a contribution to US bioenergy goals.”

What drove the registration of 3.5 million new cellulosic RINs in August, after less than 5,000 the month before??  Looks like EPA recently changed the rules in a huge way:

http://bakken.com/news/id/218997/new-biogas-rules-renewable-fuel-standards/

Now, bio-methane produced from all sorts of sources (wastewater treatment plants, landfill gas, anaerobic digestion of animal waste, etc.) is eligible for cellulosic RINs if bottled up and used as compressed natural gas (CNG) in vehicles that can use that fuel, which in the US is mostly buses, fleet vehicles, and the occasional odd CNG Civic from California.  The credits apparently still stand if the methane is used to generate electricity to power electric cars.

While the move probably takes some of the political pressure off the Renewable Fuel Standard in the short term and improves the economic viability of bio-methane projects in the face of the fracking boom, I’m worried that it might pull the rug out from under the nascent cellulosic ethanol industry at a critical time.  If the cellulosic RIN market gets flooded with cheap gas, it seems like the incentive to invest in cellulosic biofuels, the original goal of the EISA legislation, evaporates overnight.

On the plus side, in addition to this huge influx of biogas-derived RINs, the latest EPA numbers show that the production of actual cellulosic biofuels has re-bounded from its summer lull, with ~77,000 gallons of cellulosic ethanol and drop-in fuels produced in August.  I’ve updated the Cellulosic RINs page to differentiate between biogas RINs and biofuel RINs, and will keep doing so as long as detailed data is available.

In related news, now that Italy has apparently already beaten the US to commercial-scale cellulosic ethanol production with their Beta Renewable’s Crescentino facility, is GranBio’s Bioflex 1 plant in Brazil poised to do the same?  These folks are apparently licensing Beta’s pretreatment technology (which according to their website is accomplished through a high-temperatures and pressures, without acid) to process sugarcane straw and baggasse into ethanol and electricity at 21 MGY scale – very similar to the Italian plant, and the Poet/Dupont/Abengoa trio in the US.

It’s a very exciting time to be studying bioenergy…

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2 Responses to 3.5 M new cellulosic RINs in August?!? Or did EPA just sink the 2nd-gen biofuel market?

  1. John says:

    The new “Outlook for 2014 Cellulosic Production and D3 RINs” whitepaper from Genscape Inc. reviews this new rule, but points out that successful completion of the cellulosic ethanol biorefineries currently under construction in the US would lead to a total annual production capacity of 9MGY by the end of 2014, and 91MGY by the end of next year:
    http://www.biomassmagazine.com/articles/11013/genscape-suggests-75-million-cellulosic-rins-possible-in-2014
    Reaffirms that the industry is now in fact making facility investments at an accelerating pace that’s broadly consistent with the EISA/RFS2 mandate.

  2. John says:

    Also, the Beta facility in Italy must be doing okay, as there’s talk of building another slightly larger facility using the same technology in Slovakia:
    http://www.biofuelsdigest.com/bdigest/2014/10/06/beta-renewables-biochemtex-ink-deal-for-commercial-scale-cellulosic-biofuels-project-in-slovakia/
    Note that their process design is such that, under some conditions, the electricity exported is the main product by revenue, and the cellulosic ethanol the co-product.

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