Groups representing biofuel businesses and corn farmers wrote the Environmental Protection Agency on Tuesday stating that the EPA needs to reconsider how it calculates commercial-ready cellulosic biofuels as EPA proposes the 2019 Renewable Fuels Standard volumes.
First, EPA should better study cellulosic ethanol made from corn kernel fiber. Last year, EPA found ethanol plants converting corn kernel fiber to cellulosic ethanol "over performed relative to our production estimates." The biofuel and farm groups stated that "Unleashing corn kernel fiber ethanol production will bring significant and immediate economic, environmental and energy security benefits." Further, existing ethanol plants can producer hundreds of millions of gallons of cellulosic ethanol from corn kernel fiber.
EPA has been "overly conservative" in factoring in corn kernel fiber for ethanol production, the letter stated. The slow nature of EPA approving new corn kernel fiber technologies "threatens to slow adoption" at existing ethanol plants around the country.
The farm and biofuel groups point out EPA is dealing with some key questions about the eligibility of corn kernel fiber to be considered a cellulosic fuel, eligible for sale in the D3 category of the EPA Renewable Identification Numbers (RINs) market.
Biofuel and farm lobbies also are concerned about EPA low-balling cellulosic production volumes if the same methodology for 2019 that EPA used for 2018 cellulosic volumes. The methodology focuses too heavily on historic trends and doesn't consider new technology at ethanol plants.
There is uncertainty in the ethanol market and one of the problems undercutting ethanol demand is the unconditional availability of cellulosic waiver credits. EPA allows the credits swapped one-on-one with the number of cellulosic biofuel gallons required under the RFS volume obligations, the biofuel and farm groups wrote.
The groups noted that some of the various issues hanging up cellulosic volumes with EPA need to be addressed to reassure industry investors.
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