US cannot abandon biofuels global leadership

We have accomplished too much, and the future is too bright for the U.S. to abdicate its leadership on renewable fuels now, writes Bliss Baker of GRFA. This column appears in the October issue of EPM.
By Bliss Baker | September 10, 2015

This month the U.S. renewable fuels industry celebrated the 10-year anniversary of the introduction of the renewable fuel standard (RFS). But this landmark policy, implemented as part of the Energy Policy Act 2005, mandated biofuel content in blended gasoline to encourage greater use of renewable fuels and initiated unprecedented growth in the ethanol industry. Since then it has helped the U.S. diversify its energy supply mix, eased dependence on foreign oil and boosted rural economies across the country.

This success has been envied and emulated by countries the world over with steady growth seen in the Canadian, Brazilian and European biofuels industries in recent years. Today, more than 60 countries have initiated biofuels friendly policies led by the U.S., which remains the largest producer in the world.

Of course, this success has not been without its challenges. The U.S. ethanol industry has shown its resilience against commodity price spikes, severe weather and plummeting oil prices. Through all that, the industry has continued to grow and prosper. This success has been in large measure due to policies that have created the right conditions for success.

Unfortunately, despite the undeniable success of the RFS in achieving its objectives, it has come under sustained attack by vested interests that have been threatened by the growth of the renewable fuels industry, or it has been used as a scapegoat for other challenges.

As a result, the renewable fuels industry has been forced to repeatedly respond to misinformation and fear-mongering campaigns. Most damaging of all has been the success these campaigns appear to have had in influencing some within the U.S. EPA. Despite renewable fuel volumes being explicitly laid out in the original legislation, the EPA has repeatedly introduced uncertainty into the industry by delaying the release of annual blending volumes and setting blending goals far below the original targets.

This policy instability has resulted in an estimated $13.7 billion in lost investments that the advanced biofuels industry needed to increase capacity and meet RFS goals. It is extremely regrettable that the EPA has fallen prey to the self-interested fear mongering against biofuels by the fossil fuel industry.

After a decade as the world leader on renewable fuels policy development and production, the U.S. is at risk of going backwards and surrendering this leadership position. As an industry, we cannot afford to get complacent with our advocacy. While the EPA deserves credit for eventually releasing renewable fuel volumes for 2015 and 2016, the delays and significant volume reductions will undeniably have a negative effect on the industry going forward.

There is now speculation that the EPA will look to further undercut the RFS in the future, and that the program as a whole may be under threat. Not only would this be unbelievably shortsighted and foolish, but it flies in the face President Obama’s efforts to address the threat of climate change.

We have accomplished too much, and the future is too bright for the U.S. to abdicate its leadership on renewable fuels now.

Author: Bliss Baker
Global Renewable Fuels Association