'Biobased diesel' RFS on the table
A bill introduced in the U.S. Senate earlier this year calls for the nation's petroleum companies to purchase and blend 1.25 billion gallons of biodiesel by 2012. Just before press time, a companion bill was introduced in the House that would require 450 million gallons of "biobased diesel" to be used in the national diesel pool in 2008, gradually increasing to 1.25 billion gallons in 2012. The bill, titled "The Biodiesel Promotion and Quality Assurance Act of 2007," would allow any biobased diesel to qualify, as long as the fuel is derived from plant or animal matter, is registered through the U.S. EPA and meets ASTM standards. The bill doesn't exclude renewable diesel from eligibility. Rather, it calls for 80 percent of the requirement to be comprised of biodiesel, leaving 250 MMgy open to ConocoPhillips, Syntroleum Corp. and other companies moving forward with renewable diesel production plans.
The bill's sponsors believe an 80/20 balance offers a reasonable path forward, and allows biodiesel and renewable diesel to coexist. However, the rift between biodiesel purists and renewable diesel stakeholders has been intense enough to expect dissent on both sides. Some biodiesel advocates might not be pleased to see the door left partially open for renewable diesel. Likewise, some renewable diesel advocates might think 250 MMgy is equivalent to being tossed legislative table scraps. At any rate, legislating a floor for U.S. biodiesel demand is a step in the right direction for an industry that is able and eager to extend America's diesel supply, but currently hamstrung from doing it.
While extending the federal biodiesel tax incentive through 2010 remains vitally important, pairing the blender's credit with a biobased diesel RFS would begin to establish a sense of cooperation between biodiesel and renewable diesel, getting this industry headed in the right direction.