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.

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.

Alternative fuels Strategies