Winter 2017-18

I N D U S T R Y N E W S IN EARLY JULY, EPA RELEASED ITS DRAFT PROPOSAL which included a total renewable fuel volume of 19.24 billion gallons for 2018, slightly lower than the 2017 volumes of 19.28 billion gallons. However, in late September, EPA announced that it would seek further public comments on potential reductions to the 2018 RFS volumes for biomass-based diesel and advanced biofuels—not exactly a strong demonstration of support for the sector as a whole. This decision couldn’t come at a worse time for the innovative cellulosic and advanced biofuels sectors, which have faced headwinds as fossil fuels and natural gas prices remain low. As was recently announced, two large-scale global biofuel ventures are now in the process of shuttering: 1. DowDuPont said that it will exit the cellulosic biofuels business and intends to sell its first commercial project after only two years in “start-up” phase. The $225 million Iowa- based plant was projected to have a capacity of 30 million gallons per year after turning corn cobs, stems, and leaves into cellulosic ethanol. 2. The Beta Renewables cellulosic ethanol plant in Crescentino, Italy also recently shut down. Constructed in 2011, it was the world’s first commercial-scale bioethanol refinery and at a cost of €250mm, it had the capacity to produce 40,000 tons of bioethanol per year from roughly 270,000 tons of biomass. Both of these ventures have been engaged in developing second- generation ethanol, which is derived from biomass feedstocks such as switchgrass, wood chips/forest residues and municipal waste rather than corn. Prior to the merger of Dow Chemical and DuPont in August, DuPont closed a separate cellulosic ethanol plant in Tennessee. Now, DowDuPont said in a statement that as part of its “intent to create a leading specialty products company, we are making a strategic shift in how we participate in the cellulosic biofuels market. While we still believe in the future of cellulosic biofuels, we have concluded it is in our long-term interest to find a strategic buyer for our technology including the Nevada, Iowa, biorefinery. The sale of the DowDuPont facility really illustrates the current struggle of the biofuels sector. The mixed regulatory signals and hesitant application of the RFS have left investors wary and put fuel refiners/blenders in a difficult situation. A recent article at the environmentalleader.com notes that “The issue pits the nation’s oil refineries against biofuel’s producers. If refiners can’t buy the proper amount of ethanol then they are forced to buy credits from those who have exceeded the federal requirements. The shortage, they say, has pushed up prices.” “Cellulosic biofuel innovators have been dealing with mixed policy signals and tremendous regulatory uncertainty for the past decade,” said Bob Dinneen, Chief Executive of Renewable Fuels Association. While both Republican and Democratic continues on next page www.wvfa.org Winter 2017 |  West Virginia Forestry Association Mountain State Forestry 13