2.5 billion gallons by 2017
During the Bioheat workshop in Pittsburgh last week, Joe Jobe, CEO of the National Biodiesel Board, spoke about the organization’s recommendations to ramp up the biomass-based diesel carveout in RFS2 to 2.5 billion gallons by 2017. Subsequently, Biodiesel Magazine Associate Editor Erin Voegele spoke with Gene Gebolys, CEO of World Energy and chairman of the working group tasked with putting forth these RFS2 recommendations to EPA, and Alan Weber, partner at Marc-IV, special advisor to NBB and lead economic advisor to the committee investigating the increased targets and the U.S. biodiesel industry’s ability to meet them.
Gebolys said it was about two years ago that former NBB chair Ed Hegland put together a committee whose purpose was to look at all of the factors in the biodiesel industry’s ability to hit RFS2 targets and advise NBB on proposed targets to recommend to the EPA. Then, about a year ago, the group, which consists of large and small biodiesel producers, renderers, and other stakeholders in the industry, got together to look at target numbers that can be supported for sustainable growth in the biodiesel industry.
In an effort to avoid “feast or famine” situations, the group looked at what constraints might come into play at the feedstock supply, production and distribution levels. “It’s not enough to say we have enough capacity,” Gebolys told Biodiesel Magazine. From those pinch points, they formulated a high-level econometric model and hired HIS Global as an advisor to develop it. Gebolys said essentially NBB wanted to give EPA a 5-year recommendation regarding sustainable, achievable biomass-based diesel targets. In return, they want EPA to issue nonbinding 5-year outlooks as to what the agency believes will be set forth in its rulemaking. “Obligated parties do their planning on a multiyear basis,” Gebolys said, so in order to do this, these nonbinding 5-year outlooks from EPA would play an important role in the market acceptance and growth in the biodiesel sector.
Weber noted that only feedstocks with approved pathways under RFS2, or those the agency is considering, were considered in these recommendations. This means no cottonseed, camelina, pennycress or algae, for instance, were considered. In other words, the group has taken a conservative approach.
Other factors were considered, such as GDP growth in foreign countries, properly accounting for such things as when countries’ GDP rises, so too does their consumption of meats, oils, etc. Global policies were also taken into account to help shape the recommendations.
The 5-year nonbinding target is unique but important, they said. These recommendations are developed in a 2011 view of the world, using the best data available at that given time. If things change, the “nonbinding” portion of it is important, leaving room for adjustment. All in all, these recommendations are the first of many steps to come on the path to 2022.
“We encourage EPA to challenge our assumptions,” Weber said.