Study: US must increase biofuels incentives
Apr 21, 2009 11:32 AM
The United States must increase incentives for a wide variety of biofuels infrastructure investments if the nation is to meet federal renewable fuels goals, according to a new report.
The study was released by the Biofuels Infrastructure Task Force, convened by the National Commission on Energy Policy, examined the infrastructure implications of the federal Renewable Fuels Standard, which commits the US to 36 billion gallons of biofuels production by 2022 from a current level of about nine billion.
"The Renewable Fuels Standard is ambitious," said Task Force Chairman Norm Szydlowski, former president and chief executive officer, Colonial Pipeline, and a member of the commission. "To meet its timetable, approaches to biofuels infrastructure upgrades must also be ambitious. Whether its vehicles, pipelines, or pumps, new investment will be needed to meet the 36-billion-gallon mandate."
The Task Force report identified several key issues:
•The renewable fuels standard will require that the nation transition to a broad-based use of a 10 percent ethanol blend (E10), as well as increased use of higher-ratio blends (such as E85). Transporting and blending this much ethanol will stress existing networks and require new infrastructure investment.
•In the current economy it may be difficult for businesses to access capital and make large investments in new infrastructure to support national biofuels distribution. These key pieces of infrastructure include biofuel production facilities, blending terminals, pipelines, unit trains and terminals, ethanol retail facilities, and flex fuel vehicles.
•National E10 saturation may occur sooner than originally expected; however, there has been little progress in developing the E85 market necessary to absorb biofuel quantities beyond what can be blended in conventional fuels.
Based on its findings, the task force developed several recommendations, including:
•Consumer and manufacturer incentives may be needed to accelerate the market penetration of flex fuel vehicles and consumer acceptance of flex fuel vehicles will depend in part on expanded access to E85 (or higher-ratio blends) retail stations in urban and rural areas.
•Reducing or limiting the number of different blends that fuel refiners must produce to meet state-level specifications will enable a more efficient biofuels transition.
•Streamlining and simplifying permitting processes along all aspects of the biofuels supply chain would help to reduce costs and lead times for infrastructure investment.
•Market confidence in the government's commitment to the Refined Fuels Standard is a prerequisite for timely private large-scale biofuels investments. Refocusing current public incentives and subsidies to include a greater emphasis on biofuels transport, refueling infrastructure, and related vehicle technologies makes sense given the industry's current state of development. Loan guarantees or tax credits could be effective ways to support needed infrastructure investments.
© 2013 Penton Media Inc.
Acceptable Use Policy blog comments powered by Disqus