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Posts Tagged ‘Next Generation’

The next few months could be “make or break time” for the soy biodiesel industry in the U.S.

Biodiesel faces several challenges right now, including the high cost of the feedstock and the loss of the one dollar biodiesel blenders’ tax credit, which Congress allowed to expire on December 31^st.  Indications are that most biodiesel plants have ceased production as they await Congressional action on the tax credit, which may not happen until March.

In Iowa, the state’s Renewable Fuels Association has launched a campaign to highlight the importance of biodiesel—and renewable fuels, in general—to Iowa’s economy.  Monte Shaw is the executive director ofIRFA. “We’ve got a lot of exciting thing coming down the road for this industry—things that are going to really redefine renewable fuels for the future,” says Shaw. “Whether it’s exciting feedstock projects like the algae project at Shenandoah, or maybe it’s the biorefinery  project that’s scheduled to go into Newton.”

Good reasons, Shaw says, to keep Iowa’s biodiesel industry viable.

“If we let the current biodiesel industry wither away and lose the jobs we have today, it also means we’re not going to be the place—we’re not going to be the state—where those next generation investments and next generation jobs come either,” he says.  “So we’re really at a turning point, not just for the investors and jobs of today, but for making Iowa the place to be for the future of this industry as well.”

In addition to the federal tax credit extension, Shaw says IRFA will also be lobbying for a five percent biodiesel mandate in the Iowa legislature.

“We really do need a B5 fuel quality standard to create a low level of demand,” says Shaw. “It’s constant, it’s year-around, it’s predictable—and that’s what can help these plants cash flow during the good times and the bad times.”

A bill creating a B5 fuel quality standard passed the Iowa Senate in 2009, but time ran out before the Iowa House could consider the legislation.

Earlier this month, the US Department of Energy announced almost $600 million in funding for advanced biofuel projects.     This money is intended to push forward next generation biofuels, since corn based ethanol plants have come under fire for increasing food costs.   One of the beneficiaries of the funding is Sapphire Energy, who received $50 million from the DoE and another $54.5 million load guarantee from the Department of Agriculture, under the Biorefinery Assistance Program (part of the 2008 Farm Bill).

Sapphire Energy has developed a process  to produce oil from algae and then turn this oil into gasoline that is virtually identical to the gasoline that is used in cars.   Sapphire calls its gasoline a “drop-in” replacement since its fuel can be used in existing engines without any modification to the vehicle.    Sapphire is currently ramping up production of its biofuel and is looking to produce 1 million gallons of algae based fuel per year by 2011, and 100 million gallons per year by 2018.