Clean fuel standards driving biofuels industry growth

By Ross Macfarlane
Climate Solutions

Oregon, California and other states have set clean fuel standards that drive reductions in carbon pollution.  Meeting these standards will spur development of advanced biofuels produced from cellulose and residues instead of from food crops. But can the advanced biofuels industry really scale to the challenge? A new report from Environmental Entrepreneurs (E2) answers this question with a resounding yes, and projects creation of  thousands of new jobs in the process.

E2, a national community of business leaders promoting environmental policy that builds economic prosperity, released their 2012 Advanced Biofuel Market Report this week. It shows that U.S. advanced biofuels production increased from 437 million gallons in 2011 to more than 685 million gallons this year.  It specifically documents that Oregon’s new Clean Fuel Standard (CFS) can be met and exceeded by growing the advanced biofuel industry.  

"What this [report] shows is that advanced biofuels industry has sufficient, proven technology to meet these new standards that will help clear our air, strengthen our economy and provide new choices in transportation fuels," says Chris Dennett, Portland-based director of the Northwest chapter of Environmental Entrepreneurs.

The advanced biofuels industry will have the capacity to produce between 1.6 -2.6 billion gallons of low-carbon fuel by 2015 if state standards in Oregon and California and the federal Renewable Fuels Standard are not derailed. These advanced fuels will be critical to meet the aviation industries demand for low-carbon, drop-in fuels to power the next generation of flight.

The E2 report finds:

-Nationally, between 18,407-47,700 new jobs could be created by the growth in the biofuels industry if the standards in Oregon and California and the federal Renewable Fuels Standard are implemented as planned.

-Clean fuel standards are expected to drive the creation of at least 27 new advanced biofuels refineries across the United States by 2015. Currently, the U.S. has 165 advanced biofuel producers including several in Oregon.

-Oregon's Clean Fuel Standard is a key driver for growth and job creation at advanced biofuel companies in the state. ZeaChem, for instance, plans to expand its biofuels demonstration facility in Boardman, Oregon, to help meet new demand expected from the standard. The expansion is expected to create 190 new construction jobs and 65 permanent positions. ZeaChem is also exploring new fuels for aviation.

Oregon’s Clean Fuel Standard requires fuel suppliers to lower carbon emissions from transportation fuels by 10 percent over a 10-year period. Oregon’s standard is similar to California’s existing Low Carbon Fuel Standard.  A similar measure is under consideration for implementation by a consortium of 11 Northeastern states.  The national Renewable Fuel Standard requires 3.6 billion gallons of cellulosic and “other” advanced fuels to be produced in 2015.

Efforts to fill up the tank with advanced biofuels is particularly important for the aviation industry. As documented in our Sustainable Aviation Fuels Northwest report, advanced fuels are part of a strategic initiative by airlines and aircraft makers to reduce carbon emissions – the industry has set a target for 1% of worldwide aviation fuels to contain bio content by 2015.  Policies like Oregon’s Clean Fuel Standard add necessary thrust behind the technologies and infrastructure to stand up a commercial-scale advanced biofuels industry. Biorefineries that produce advanced biofuels for ground vehicles will also supply the aviation industry.

For a copy of E2s full report, please contact Bob Keefe at bkeefe@e2.org or Mary Solecki at mary@e2.org.  For more information on Climate Solutions’ work on renewable fuels and Oregon’s clean fuel standards, contact Ross Macfarlane at ross@climatesolutions.org; Patrick Mazza at Patrick@climatesolutions.org; or Ann Gravett at ann@climatesolutions.org.