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:
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…