2016 Time to Double-down on Renewable Chemicals

Corinne Young

Michele Jalbert

By Corinne Young and Michele Jalbert, re:chem Alliance

For all of 2015’s turbulence in the renewable chemical sector, in one area – US government policy – the industry saw marked progress.

For the last two years, the Renewable Chemical & Advanced Materials Alliance (re:chem), in concert with other stakeholders, has relentlessly advocated for several policy priorities. Our agenda included: prying open USDA and DOE loan guarantee and grant programs to support renewable chemical projects; driving for enactment of a renewable chemical Production Tax Credit (PTC) and promoting reform of the hopelessly outdated Toxic Substances Control Act (TSCA) to ensure a level playing field for renewable chemical interests. In many respects, 2015 was a watershed year for these policy priorities, and important opportunities lie ahead in 2016 to strengthen our hand in Washington.

Not surprising to those who work in DC, US policy was initially slow to respond to the promise of the nascent, yet fast-moving renewable chemical sector, failing in the early days to distinguish biobased chemicals from the established biofuels industry and all its complex challenges. Yet, with the continuous work of re:chem and others, government champions emerged in both the Congress and the Executive Branch during the last few years – people like Senators Thad Cochran and Debbie Stabenow, DOE’s Jonathan Male, EPA’s Jim Jones and USDA’s Secretary Vilsack. These individuals grasped the fact that this exciting sector offers an advanced manufacturing renaissance, while supporting new markets for US farmers. These leaders saw the potential for job creation – family sustaining, career based, high value jobs for a new economy– and worked with us to enact significant policy changes.

The reauthorization of the Farm Bill at the end of 2014 set the stage for 2015’s implementation of the expanded Loan Guarantee Program to include biobased products. And, as in any program changes, the devil is always in the details. Throughout 2015, re:chem worked closely with the USDA to help ensure the intent of congressional champions in updating the Farm Bill was mirrored in the rules issued to govern how renewable chemical projects could access USDA Loan Guarantee and other programs. Despite inadvertent ambiguous language in the final Farm Bill, champions at every level of USDA helped sort out an approach that significantly improves access to capital for renewable chemicals and biobased products. As USDA prepares to announce Round One projects, multiple renewable chemical proponents are gearing up to submit Letters of Intent for Round Two next month.

Similarly, in DOE, great progress has been made in helping policymakers understand the economic value of biobased chemicals and materials, and their potential to cross-subsidize biofuel projects, supporting the over-arching goal of a vibrant BioEconomy. Policymakers increasingly see the potential of biobased chemicals and materials to drive cross sector growth through advanced manufacturing platforms, such as game changing 3-D printing with NatureWorks’ Ingeo .

And of course, one of welcome developments of 2015 was the bipartisan commitment toward reforming TSCA, our nation’s woefully outdated chemical regulatory scheme that dates back to the 70s. The EPA has long been hampered by TSCA’s muddled framework, as the agency sought to enable market entry for new, safer chemicals. And as naysayers sat on the sidelines, re:chem worked quietly behind the scenes to help ensure parity for renewable chemical interests in HR 2576 and S 697, and will continue to do so as the conference committee to reconcile these two bills sets to work. Nearly unanimous bipartisan support of both the House and Senate bills in 2015 signified remarkable progress on a contentious issue in a divided Congress, and underscores the potential for more bipartisan policy success – even cracking open the tax code. In this context, we owe it to our champions to double-down on efforts.

With 2015 bipartisan support dealing funding and regulatory wins, we have garnered a strong seat at the table for a Renewable Chemical PTC. Companion bills were introduced in 2015: HR 3390 sponsored by US Representatives Pascrell, Neal, Fitzpatrick and Ashford, and S 2271 sponsored by US Senators Stabenow, Franken, Coons and Baldwin. Far less costly than the recently passed five-year extension of the wind PTC, this modest provision would level the playing field for sector investment and deployment here in the US. And, as the Senate tackles its first comprehensive energy legislation in nearly ten years, opportunities exist to seek parity for renewable chemicals in expanded DOE spending.

As Congress reconvenes for the last round with the Obama Administration, it is time for our sector to up the ante, not fold.