Wednesday, November 26, 2014 12:18:10 PM
Cellulosic ethanol and chemicals are the future but the US will not see growth.Blend Wall Brings Uncertainty
Despite the breakthrough in production in 2014, cellulosic ethanol producers are concerned that an EPA proposal to avoid breaching the so-called ethanol “blend wall” could limit their access to fuel markets, constraining future growth.
“You have to have space in the marketplace for these new biofuels to be sold,” Erickson said.
The first commercial-scale cellulosic production facilities have begun operation recently. Poet LLC and Royal DSM NV in September opened their 20-million-gallon Project Liberty facility in Emmetsburg, Iowa. More recently, Abengoa SA began operation at its 25-million-gallon Hugoton, Kan., facility in October.
Investors are unlikely to fund new production facilities without the guaranteed markets provided by the renewable fuel standard, Erickson he said.
The EPA's 2014 renewable fuel standard proposal would require petroleum refiners and importers to blend 15.21 billion gallons of renewable fuels into their products. That is down from the 18.15 billion gallons required by the Energy Independence and Security Act as the agency takes steps to address the ethanol blend wall. That is the point at which the amount of ethanol that must be blended into the gasoline supply exceeds 10 percent, the maximum approved for all vehicles on the road.
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