Commentary: Biodiesel could ease U.S. "blend wall"
There are two further carveouts within advanced biofuels. )
First, there is a mandate for cellulosic biofuel, defined as "renewable fuel derived from any cellulose, hemicellulose, or lignin that is derived from renewable biomass".
Second, there is a target for biomass-based biodiesel made from soy oil, algal oils, waste oils and animal fats.
EPA sees a rapidly growing share of biodiesel (under its "primary control case"), accounting for nearly two fifths of all biofuel by volume by 2022 from about a tenth now.
That assumes biodiesel in future accounts for a big share of the rapidly rising cellulosic biofuel category.
Biodiesel would qualify as cellulosic biofuel if manufactured through a biomass-to-liquid conversion process called Fischer-Tropsch.
EPA has already used its authority to cut the cellulosic ethanol mandate (because of under-supply) and increase biodiesel, while keeping the overall advanced biofuel target unchanged.
That has directly substituted biodiesel for ethanol.
This year EPA cut the cellulosic target to 14 million gallons from 1 billion gallons as required in the 2007 act, and increased biodiesel to 1.28 billion gallons, also from 1 billion.
The U.S. National Biodiesel Board estimates record output of more than 1.2 billion gallons this year, roughly half of which will be made from soyoil with the rest a mix of recycled cooking oil, animal fats and other products.
EPA talked up the ability of the U.S. biodiesel industry to take an increasing role, in its ruling last year setting the biodiesel target.
"We believe that it is appropriate that biomass-based diesel play an increasing role in supplying advanced biofuels to the market between 2012 and 2022," it said. ("2013 Biomass-Based Diesel Renewable Fuel Volume; Final Rule")
"Production capacity as well as more recent data on actual production volumes does in fact demonstrate that the industry is capable of significant increases in production when demand for it exists," it said, reporting U.S. production capacity nearly double the new 2013 target.
Regarding substituting biodiesel for corn ethanol, to ease the immediate blend wall problem, EPA has no authority to increase the advanced biofuel category beyond the target stated in the 2007 act.
However it does have the authority to waive the total volume of renewable fuel, on the basis of inadequate renewable fuel supply or expected severe harm to the economy - a power it has not yet wielded.
It is unclear whether it could reduce the overall renewable fuel target (mostly corn ethanol), using such a waiver, while maintaining the advanced biofuel carveout, and by implication raise the share of biodiesel.
Biodiesel does have some concerns, some of which it shares with the corn ethanol it would replace, including price compared with conventional diesel (presently pure biodiesel has a 20 percent premium); as well as its possible impact on carbon emissions and food prices.
But it offers a possible, partial solution to mitigate the blend wall worries facing gasoline.