House bill grandfathers biodiesel into RFS, orders study of indirect land use

By Susanne Retka Schill | June 09, 2009

Posted June 29, 2009

The U.S. House of Representatives passed climate change legislation with language that would improve the Renewable Fuels Standard implementation for biodiesel.

The American Clean Energy and Security Act of 2009, also known as the Waxman-Markey bill, passed by a narrow margin of 219 to 212 in the House on Friday, June 26. Among the provisions of a deal struck among the House leadership, biodiesel gets grandfathered into the 1 billion carve-out for biomass-based diesel without a greenhouse gas (GHG) reduction target, similar to the grandfather provision for ethanol. Biodiesel production from all plants in production or under construction in December, 2007, when the 2007 Energy Bill was enacted, is grandfathered into the RFS at 1 billion gallons or the EPA-set volume, whichever is higher.

The bill's language also delays the use of international indirect land use change impacts in determining a fuel's GHG emission profile for the RFS for several years while an independent scientific assessment is done. Six months after enactment, the bill says the USDA and EPA would jointly institute a three-year National Academy of Sciences study to determine whether or not it is scientifically valid to incorporate indirect international emissions. Upon completion, the Secretary of Agriculture and the EPA administrator would jointly determine whether to include indirect emissions in the GHG reduction targets for the RFS program, subject to public notice and comment. Congress would have one year to act on the joint USDA/EPA determination. The earliest an international indirect land use assessment for GHG emissions could be incorporated would be six years from enactment.

The House compromise was negotiated by Rep. Collin Peterson, chairman of the House agriculture committee, Henry Waxman, chairman of the House energy and commerce committee and Speaker of the House Nancy Pelosi to garner the support needed to pass the Climate Change bill. The American Clean Energy and Security Act would establish a federal carbon cap-and-trade program and a Renewable Portfolio Standard setting a 15 percent target for renewable energy content in electrical production by 2020.

Peterson had announced earlier that he was reluctant to support the climate change legislation unless Congress addressed the inclusion of indirect land use impacts in the Renewable Fuels Standard. EPA's proposed rule to implement the RFS gave soy biodiesel a devastatingly low GHG reduction score due to the incorporation of international indirect land use change impacts. The indirect land use penalty to biofuels has sparked widespread protest from industry and the scientific community that the science behind the modeling is far too full of errors to be the basis of policy.

"The NBB is very pleased with the hard work of Chairman Peterson for biodiesel," Frohlich said. "We hope the deal being reported will move through swiftly so we can have the RFS in place to provide a framework for our producers to get up to speed again."

While the House language is a positive development for the biodiesel industry, it is uncertain when the Senate will begin its work on energy and climate change since it is expected to complete work on health care reform first.
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