US policy instability cost $13.7 billion in renewables investment: report
80,000 lost jobs through “EPA’s delays in rule making”, according to new analysis
In Washington, EPA’s delays in rulemaking for the Renewable Fuel Standard (RFS) over the past two years have caused an estimated $13.7 billion shortfall in investment in advanced and cellulosic biofuels as a result, the Biotechnology Industry Organization (BIO) finds in an analysis released this week.
Those 80,000 jobs
BIO estimates that EPA’s delays in rulemaking have undercut the industry’s ability to create jobs by more than 80,000 direct jobs in operations and construction, and an additional 228,000 indirect jobs within the rural economy.
A letter to President Obama
Following publication of the report, a letter was sent to US President Barack Obama, signed by RFA, National Corn, POET, DSM, Novozymes, Growth Energy, BIO, AEM, AEC, and Abengoa, stating that “the EPA’s proposal in 2013 was an enormous disservice to you and your legacy, Mr. President. Prior to the release of that proposal, we had asked to meet with the EPA, but were rebuffed. We would like to work with you to ensure that the mistake is not repeated. Let’s seize the opportunity to restart investment in advanced biofuels and fulfil the promise of the commonsense, bipartisan Renewable Fuel Standard. The letter can be read in full here.
Stakeholder reaction
In commenting on the report, Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, observed:
“Cellulosic and advanced biofuel producers have now reached commercial status, enabling them to build additional biorefineries based on proven technology with lower risk and reduced costs. But just as the industry reached this stage of commercialization, EPA rulemaking delays generated instability in the RFS program and intolerable investment uncertainty. The policy instability is responsible for chilling as much as $13.7 billion in investments that the advanced biofuel industry needed to build capacity to meet the RFS goals. The chill in investment has had the heaviest impact on cellulosic biofuel developers. The delays in rulemaking have also undercut the industry’s ability to create new employment opportunities, resulting in the loss of more than 80,000 direct jobs.”
The background
BIO has tracked the advanced biofuel industry’s development and construction of biorefineries since 2009. To date, the industry has invested more than $5 billion in first-of-a-kind demonstration and commercial-scale biorefineries around the world. The analysis finds that as of April 2015, there are five commercial cellulosic biorefineries with a combined capacity of more than 50 million gallons within the United States and registered to meet the goals of the RFS, along with several pilot and demonstration plants. Additional commercial biorefineries are under construction.
These advanced biorefineries employ 5,125 scientists, engineers and operations personnel. Construction of these facilities has created an additional 8,600 fulltime positions over the past five years.
To reach the 2015 RFS goal of producing 5.5 billion gallons of advanced biofuels (including 3 billion gallons of cellulosic and 2.5 billion gallons of advanced biofuel or biodiesel), bio-era estimated the need for 110 operating plants requiring $20.34 billion dollars in cumulative investment.
As of April 2015, there are five commercial cellulosic biorefineries with a combined capacity of more than 50 million gallons within the United States and registered to meet the goals of the RFS, along with several pilot and demonstration plants. Additionally, there are 28 biorefineries generating cellulosic biogas with a combined annual capacity of approximately 80 million gallons.
EPA delays on renewable fuel petitions
The Environmental Protection Agency (EPA) was nine months late issuing the 2013 RVOs and is more than 17 months late in issuing the 2014 rule. Further, the agency has made cellulosic biofuel producers wait an average of 29 months (more than two years) for approval of production pathways.
Currently, 29 companies have unresolved petitions filed with EPA and they have been waiting on average more than 32 months for resolution. A majority of an estimated $13.7 billion shortfall in investment for cellulosic and new advanced technologies should therefore be attributed to EPA’s delays in issuing timely rules.
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