Ethanol advocates support corn kernel fiber as qualifying RFS feedstock, defend RINs

The Renewable Fuels Association (RFA) and Growth Energy are supporting the EPA’s efforts to add cellulosic fiber from the corn kernel to the list of qualifying cellulosic biofuel feedstocks in the Renewable Fuel Standard (RFS2). They also back the agency’s simplified approach to Renewable Identification Number (RIN) generation for renewable fuels derived from cellulosic biomass.

“We applaud EPA for confirming that corn kernel fiber is ‘crop residue,’ and believe the Agency has proposed a sensible and straightforward approach to RIN generation for renewable fuels derived from cellulosic biomass feedstocks,” wrote Bob Dinneen, RFA president and CEO in comments submitted this week to the EPA. “Several technologies to convert corn kernel fiber into cellulosic ethanol have been developed in recent years. The volumes of cellulosic ethanol produced from corn kernel fiber can meaningfully contribute to RFS2 cellulosic biofuel requirements in the near term.”

“We are aware of a handful of plants that could begin commercial production of cellulosic ethanol from corn kernel fiber within the next six to 12 months,” says Geoff Cooper, vice president, research and analysis, RFA. “It seems reasonable to expect that several million gallons of cellulosic ethanol from corn fiber could be produced in 2014 if EPA finalizes this rule in the next few months. In the long run, we could see several hundred million gallons, or even half a billion gallons, of cellulosic fuel coming from these technologies.”

Quad County Corn Processors, Galva, IA is one of the ethanol plants that has converted corn kernel fiber to ethanol at the trial/demonstration scale, Cooper says. He adds that several technology providers, including Edeniq, have been working with corn ethanol plants on adoption of corn-kernel-fiber to cellulosic ethanol technologies.

Focus on RINs

The RFA and Growth Energy also support EPA’s primary approach to allow 100 percent of the volume of renewable fuel produced from cellulosic feedstocks to generate cellulosic biofuel RINs. “It is straightforward and sensible for producers. There isn’t a feedstock on earth that is 100 percent cellulosic in nature, but there are lots of feedstocks that are predominantly cellulose,” Cooper says. “Rather than requiring producers to account for all of the incidental non-cellulosic components of the feedstock separately, EPA is allowing the entire volume to qualify as cellulosic biofuel. It just makes good sense from a technical and administrative standpoint.”

Just this week, though, RINs in general have again come under fire from the petroleum refining industry. In testimony before the Senate Committee on Energy and Natural Resources to examine the effects of oil production, refining and distribution on domestic gas prices, William Klesse, Valero Energy Corporation chairman of the board and COO, wrote that anticipation of the E10 blend wall has forced obligated parties, including refiners, “to incur unprecedented costs for RINs or credits for biofuels that cannot safely be blended into gasoline.” Valero also produces corn-based ethanol.

Klesse noted that the price of RINS this week set a record high of $1.33 for advanced biofuel RINS, $1.32 for corn-based ethanol RINs and $1.33 for biomass-based diesel RINs.

The EPA uses RINs to track renewable transportation fuels to monitor compliance with the RFS, which requires transportation fuels to contain minimum volumes of renewable fuels. The RFS assigns obligated parties (refiners, blenders and importers) a renewable volume obligation (RVO). The RVO for each party is the volume of renewable fuels it is obligated to sell, based on a percentage of the company's total fuel sales, according to the Alternative Fuels Data Center.

The only reason that RIN prices are high is that the oil industry has resisted producing fuel with higher blends of ethanol in them, says Tom Buis, CEO, Growth Energy, adding, “High RIN prices are self-inflicted.” The ethanol industry does not benefit from them. Moreover, last year when RIN prices were just two to three cents last year, gasoline prices were not much lower than they are this year, he said.

Buis also notes that when the Energy Policy Act was enacted in 2007, the petroleum industry wanted RINs to allow them the flexibility to either blend renewable fuels or buy credits (RINs) to comply with the RFS.

Buis also takes issue with the petroleum industry questioning ethanol’s safety. “E15 has been the most tested fuel change ever,” he says. The Department of Energy conducted lifetime mileage (120,000 miles) tests on 86 different vehicle models and did not find ethanol to be a safety concern. Meanwhile, he says that the petroleum industry has based its arguments on a “cherry-picked” study conducted on just eight vehicles and “redefined the terms of failure.”