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Cellulosic ethanol producers respond to EPA proposal to reduce volume requirements in RFS

Cellulosic ethanol producers, poised to open plants next year, discuss the impact that reduced volumetric requirements in the RFS could have on their plans.

Representatives from the biofuel industry continue to testify and submit comments to the EPA concerning its proposal to reduce the volumes of biofuels required to be blended into transportation fuel (by the Renewable Fuel Standard or RFS) for 2014.

“The EPA's proposal is not the final rule, and may well be revised before it is finalized,” Chris Standlee, executive vice president, institutional affairs, Abengoa Bioenergy US Holding, LLC, told Farm Industry News.

Abengoa Bioenergy is in the midst of building a 25-million gallon per year cellulosic ethanol facility in Hugoton, KS. If the EPA proposal is not revised, Standlee says it would be “a mistake,” adding, “The purpose of the RFS has always been to expand the use of renewable fuels beyond any arbitrary 10 percent limit. First generation ethanol producers responded to that call by investing heavily in new production facilities. EPA's proposed action could result in those investors being forced to strand their existing assets, and significantly restrict investments in newer renewable fuel technologies that might have been made if governmental regulation was consistently applied.”

If the EPA proposal is not revised, Abengoa, which is headquartered in Seville, Spain, will still open the Hugoton plant. “It is almost complete, and is expected to start up early in 2014,” Standlee said. However, any decision to dramatically reduce volume requirements in the RFS could impact Abengoa's future investment in biofuels in the United States, he noted.

Although EPA’s proposal could cause some uncertainty in the market, POET–DSM will open Project Liberty in Emmetsburg, Iowa, as planned, says Kevin Potas, business development manager, POET-DSM:  “Once this plant and others come online in 2014, we expect there to be growing opportunities for cellulosic ethanol.” Potas noted that other corn ethanol producers have already expressed interested in working with POET–DSM on additional projects. POET-DSM will be licensing its cellulosic ethanol production process and technology to other corn ethanol producers.

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