What Is The Government Doing About Biofuels?

Biofuels are fuels produced directly or indirectly from organic material – plant and animal sources – rather than from fossil fuels like coal, petroleum or natural gas. Common biofuels in use today include bioethanol and biodiesel. Biofuels have become increasingly important as renewable, sustainable alternatives to fossil fuels that can reduce greenhouse gas emissions and provide energy security. As an agricultural commodity, biofuels also have the potential to support rural economies and create jobs. However, biofuel production also raises concerns such as impacts on food prices and availability. Given the complex interactions between biofuels and issues like climate change, economics, and food supply, governments play a critical role in regulating, supporting and guiding the development of the biofuel industry through legislation, subsidies, incentives and standards. Government policies aim to promote the sustainable use of biofuels while managing potential risks and unintended consequences through careful oversight and regulation.

Current Legislation

The U.S. government has implemented several major pieces of legislation related to biofuels over the past couple decades. Some of the key laws include:

The Energy Policy Act of 2005 established the Renewable Fuel Standard (RFS), which mandated transportation fuel sold in the U.S. to contain a minimum volume of renewable fuels (ethanol and biodiesel). This standard has been expanded over time and is a major driver of biofuel production in the U.S. (Brazil: Just Not That Into Second-Generation Biofuels).

The Energy Independence and Security Act of 2007 greatly expanded the RFS program by increasing the volume requirements for renewable fuel use through 2022. This law also established new categories for renewable fuels, including cellulosic biofuels, biomass-based diesel, and advanced biofuels (A Legal Analysis of the Effects of the Renewable Fuel Standard).

The Biodiesel Tax Credit provides a $1 per gallon tax credit for biodiesel blended with petroleum diesel. This credit has been extended multiple times by Congress to incentivize biodiesel production and use.

The Second Generation Biofuel Producer Tax Credit provides a $1.01 per gallon tax credit for cellulosic biofuels through 2022 to promote investment in advanced biofuels.

Department of Energy Efforts

The Department of Energy (DOE) is one of the main federal agencies supporting biofuel research and commercialization. Through various programs and initiatives, the DOE provides funding, conducts research, forms public-private partnerships, and aims to accelerate the development and expansion of the bioeconomy.

A major focus of the DOE’s bioenergy efforts is providing research funding to universities, national laboratories, and the private sector. The DOE has provided billions of dollars in recent years to support bioenergy research and development across the full supply chain – from feedstock development to conversion technologies. Key research areas include improving biomass yield and processing, developing advanced biofuels, and driving down costs [1]. This research aims to make biofuels more viable and cost-competitive with conventional fuels.

The DOE also engages in public-private partnerships, such as the Bioenergy Technologies Office (BETO), to help commercialize emerging bioenergy technologies. BETO partners with industry, universities, national labs, and other agencies to develop, test, and deploy bioenergy innovations at commercial scale. These partnerships leverage both public and private funding and expertise to accelerate bioenergy deployment [2].

USDA Biofuel Programs

The USDA has several programs aimed at developing domestic biofuels and the associated infrastructure. Some key initiatives include:

Biorefinery Grants – The USDA provides grants to companies to build or retrofit biorefineries to produce advanced biofuels (Rediscover Wheat, 2016). This helps drive investment into biofuel production facilities.

Biofuel Infrastructure Investments – The USDA partners with private companies to install infrastructure like blender pumps and storage tanks needed for wider biofuel distribution (Rediscover Wheat, 2016). This expands access to biofuels.

Biofuel Crop Research – The USDA Agricultural Research Service conducts studies on improving yields and sustainability of biofuel feedstock crops like switchgrass and energy cane (Rediscover Wheat, 2016). This leads to more efficient biofuel production.

EPA Renewable Fuel Standard

The Renewable Fuel Standard (RFS) program, established under the Energy Policy Act of 2005 and expanded by the Energy Independence and Security Act of 2007 (PDF), requires a certain volume of renewable fuel to be blended into transportation fuel each year (overview of RFS program). The EPA sets annual renewable fuel volume mandates for four different categories of biofuels (renewable fuel volume mandates).

The RFS program has been a major driver in the growth of U.S. biofuel production, particularly corn ethanol and soybean biodiesel. In 2022, the total renewable fuel volume requirement is 20.63 billion gallons, including 15 billion gallons of conventional biofuel like corn ethanol. Cellulosic biofuel volumes started at 100 million gallons in 2010 but have fallen short of EPA mandates so far (impact on biofuel production).

State and Local Initiatives

Many states have implemented their own incentives and programs to promote biofuel production and use within their jurisdictions. For example, Iowa offers a Biodiesel Blended Fuel Tax Credit that provides a refund of state excise tax for biodiesel blends of at least 5%. Minnesota has a similar Biodiesel Blend Tax Credit for B2-B20 blends. Some states like Oregon offer biofuel producers tax credits based on production volume.

There are also regional efforts to create biofuel production hubs. The Pacific Northwest has been working to develop an aviation biofuels industry, led by the Sustainable Aviation Fuels Northwest coalition. They have conducted research on regional feedstock availability and infrastructure needs to supply airports in the area with locally produced sustainable jet fuel. Similarly, the Midwest Aviation Sustainable Biofuels Initiative (MASBI) brings together partners across agriculture, aviation, energy, and academia to advance biojet fuel adoption in the Midwest states.

Military Biofuel Usage

The U.S. military has been at the forefront of adopting biofuels to help meet renewable energy goals and increase energy security. In 2011, the Department of Defense set a goal to get 25% of its energy from renewable sources by 2025. This includes moving away from reliance on fossil fuels towards increased use of biofuels for ships, aircraft and ground vehicles.

The Navy has been testing and validating biofuels for use in its surface fleet and aircraft. In 2016, it operated its “Great Green Fleet” carrier strike group powered by alternative fuels during the Rim of the Pacific (RIMPAC) maritime exercises. The Army is also exploring increased use of biofuels for power generation at bases and for fueling vehicles and aircraft. According to the National Defense Authorization Act, the military’s use of biofuels must achieve cost competitiveness with conventional fuels by 2022.

However, congressional restrictions have limited the military’s ability to ramp up biofuel adoption. Some critics argue that large-scale procurement of biofuels would be too costly. Supporters counter that military investment helps drive the development of next-generation biofuels that can eventually achieve cost parity as production scales up. They also argue it improves energy security by reducing reliance on imported oil.[1]

International Collaboration

International collaboration on biofuels has grown in recent years, helping countries share best practices and research to accelerate deployment of clean energy. The International Biofuels Alliance (IBA), an initiative led by India, Brazil and the United States, was created at the G20 in 2022 Daily India Post. The alliance seeks to enhance collaboration on biofuels among G20 countries and promote broader use of biofuels in transportation and industry.

Additionally, the Mission Innovation program includes 24 countries working together on research and development for clean energy innovations including biofuels.

Challenges

Despite government support and growing interest in biofuels, there are some key challenges constraining wider adoption. These include:

Land use constraints: There are concerns that increased biofuel production could divert agricultural land away from food production and lead to deforestation, impacting food prices and the environment (source). Most biofuel feedstocks currently come from food crops like corn and soybeans.

Food security concerns: Related to land constraints, some worry that increased biofuel production could negatively impact food security by reducing available cropland for food and increasing food commodity prices (source). This is especially concerning for developing countries.

High production costs: In many cases, biofuels remain more expensive to produce than fossil fuels. Additional research and process improvements are needed to reduce production costs through advanced biofuel technologies (cellulosic ethanol, algae-based fuels, etc).

Infrastructure compatibility: Most vehicles and infrastructure are designed for gasoline and diesel, not biofuels. Additional infrastructure and vehicle investments are needed for wider biofuel adoption.

Future Outlook

Projections for biofuel growth and innovation look promising. According to a report from the U.S. Energy Information Administration (EIA), biofuel production is expected to continue increasing through 2050 due to policies like the Renewable Fuel Standard and state/local initiatives. The EIA forecasts renewable diesel and biodiesel production rising from 60,000 barrels per day in 2019 to 277,000 barrels per day in 2050. Ethanol production is projected to reach 16.8 billion gallons by 2022. Technological advancements like converting biomass to bio-oil could enable greater utilization of biofuels.

Potential policies in development include further renewable fuel standard adjustments, expanded biofuel infrastructure funding, and incentives for next-generation biofuels from non-food feedstocks like agricultural residues. The military may increase its biofuel blending goals. The U.S. and international partners can further coordinate on biofuel research and sustainable production standards. However, challenges remain around cost-competitiveness with petroleum and balancing environmental sustainability.