Will slow and steady win the race for alternative jet fuels?
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Is the Renewable Fuel Standard enough to spur progress in advanced biofuels? Probably not.
Production of cellulosic biofuel is expected to fall nearly 7 billion gallons short of meeting the statutory Renewable Fuel Standard (RFS) volume for this type of advanced biofuel in 2018, which has forced the EPA to lower targets for the program. Although cellulosic biofuel production has lagged behind the ambitious RFS schedule, it has exhibited an overall upward trajectory, with year-over-year increases in output since 2011 and new cellulosic biofuel companies coming online. Given that other government support, such as grants and loan guarantees, also influence cellulosic biofuel development, we wanted to know if this modest success is due to the RFS or other forms of direct support.
We looked at funding sources of cellulosic biofuel facilities to understand which funding paths have helped establish existing refineries, including those slated to deliver fuel to meet 2018 RFS goals. To develop a list of active facilities in the United States, we queried the BIOENERGY2020+ database of facilities for the production of advanced biofuels. We applied filters to arrive at cellulosic biofuel plants that are either operational or under construction. While this database may not contain all active facilities in the United States, it should comprise a representative sample. We then researched each facility to determine if it received government support—either from the U.S. government or from its home government if it was located outside of the U.S. but delivering fuel to meet the RFS target.
The table below presents a list of advanced biofuel facilities and their government funding sources, if any. Projects in bold are expected to deliver fuel for RFS compliance in 2018. Out of 21 active facilities, 16 received U.S. federal, state, or Canadian government funding. Grant amounts ranged from relatively small (e.g. $1.5 million) into the tens of millions. Notably, five of seven RFS-supporting facilities have received significant government funding from their domestic governments. For example, Edeniq secured funding from the U.S. Department of Energy (DOE) and the California Energy Commission (CEC) totaling $28.9 million. Ensyn, a company whose Canadian facilities are slated to help meet RFS targets, recently received a $70 million loan guarantee from the U.S. Department of Agriculture for a new plant in Georgia. Although this facility isn’t expected to contribute to the RFS in 2019, it may do so in future years.
Active cellulosic biofuels refineries or companies and their funding sources. Projects and companies in bold are expected by EPA to deliver fuel to meet the 2018 Renewable Fuel Standard volume obligations.
| Project or Company Name | Location(s) | Federal Funding Source(s) |
|---|---|---|
| Edeniq | Visalia, CA, US | DOE Grantee, California Energy Commission Grantee; Private Investment |
| Omaha, NE, US | No external funding sources found | |
| Sao Paulo, Brazil | No external funding sources found | |
| Enerkem | Edmonton, AL, CA | Private investment and some government funding |
| Ensyn | Renfree, ON, CA | Ontario Province Program Grantee |
| Port-Cartier, QC, CA | Canadian Government Grantee | |
| GranBio | Sao Miguel dos Campos, Brazil | Private investment from Banco Nacional de Desenvolvimento Economico e Social (BNDES) |
| Project Liberty, POET-DSM Advanced Biofuels | Emmetsburg, IA, US | DOE Grantee, USDA Grantee, State of Iowa Grantee |
| Quad-County Corn Processors | Galva, IA, US | No external funding sources found |
| Ensyn Georgia Biorefinery I, LLC | Dooly County, GA, US | USDA Loan Guarantee |
| DuPont Cellulosic Ethanol Demonstration plant | Vonore, TN, US | No external funding sources found |
| Thomaston GP3+ Biorefinery, American Process | Thurnston, GA, US | DOE Grantee |
| Commercial Plant, Fiberight LLC | Hampden, ME, US | Maine State Government Bond Security |
| Gevo | Luverne, MN, US | Joint USDA-DOE Grantee |
| USA Mobile Demo Plant, LanzaTech | Soperton, GA, US | DOE Grantee |
| Demonstration Plant, Renmatix | Rome, NY, US | No external funding sources found |
| ThermoChem Recovery International (TRI) | Durham, NC, US | DOE Grantee |
| Eagle Demonstration Plant, Virent, Inc. | Madison, WI, US | DOE Grantee |
| LLC Thermal Reformer Synthesis West Biofuels, West Biofuels | Woodland, CA, US | California Energy Commission |
| ZeaChem, Demonstration scale biorefinery | Boardman, OR, US | DOE Grantee |
| Red Rock Biofuels, forest biomass refinery | Lakeview, OR, US | DOE Grantee |
Note: Funding sources presented here are to the best of our knowledge, and facilities that do not have sources listed may have received funding that was not published.
In 2018, the RFS will support less than half of the commercial or demonstration-scale cellulosic projects in the U.S. (or that export cellulosic fuel to the U.S.). However, most projects have received direct government funding in the form of grants and loan guarantees. Looking to the future, projects listed here that aren’t expected to participate in the RFS in 2019 may contribute volumes once a commercial facility is built and ramped up. However, given policy uncertainty, as well as the delay in getting new pathway approval, it’s unlikely that the RFS is a major factor in attracting private investment. Taken together, these findings suggest that federal and state grant and loan guarantees have been essential in spurring progress in the cellulosic biofuel industry, while the RFS has only influenced a minority of facilities. It looks like the RFS alone won’t be enough to drive a transition to cellulosic biofuels. Continued direct funding from the US and other national governments will be key.
