BIO: RFS policy instability continues to ‘chill investment’ in advanced biofuels

The US Environmental Protection Agency’s new methodology for setting annual Renewable Fuel Standards (RFS) continues to chill investment in advanced biofuels, the Biotechnology Innovation Organization (BIO) finds.

Based on a new study, BIO says investment patterns demonstrate that EPA is sending a sustained market signal that disincentivises advanced biofuels, causing a $22.4 billion (€19.8bn) shortfall in necessary investment.

Brent Erickson, executive VP at BIO’s industrial and environmental section, said: “EPA recognises that its delays in rulemaking from 2013 to 2015 undercut investment in advanced biofuels. The agency fails to recognize, however, that its methodology – including in the newly proposed 2017 rule – also undercuts investment in advanced biofuels.

Data on investment in the biofuel sector bears out that EPA’s methodology has forced producers to consolidate investment in conventional biofuel production capacity and distribution infrastructure, while sacrificing investment in advanced, according to Erickson.

 “EPA can correct course in the 2017 rule by reversing its use of the general waiver authority to reduce overall volumes, raising advanced biofuel volumes sufficiently to obviate competition among biofuel developers, and ensuring that the US transportation fuel market is open to every gallon of renewable fuel that can be produced,” he concluded.

The report is available for download here.