Biofuels Part Two - Fertile Energy Policies

Biofuels Producers Find Fertile Policies Across the Great Plaines.

In terms of production capacity (MMgy), a whopping eight of the 12 largest biodiesel plants call the Midwest home, according to Biodiesel Magazine.

While impressive, this is nothing new thanks to decades of painstaking innovation in the region. As attorney Todd Taylor explains, the Midwest was the original hub for biofuel developments, not a new powerhouse, and has been absorbing the industry’s many peaks and valleys since the ‘80’s.

For part two of our biofuels series, we looked at factors effecting the mainstream success of biodiesel and how government policies are driving further adoption.

Step One: Implement Renewable Fuel Standards
Technology is a drive, but still relies heavily on national and local policy in the U.S.

The best example is the Renewable Fuel Standard (RFS) program, established and enforced by the EPA, which has enacted a coast-to-coast demand for biofuels.

Initiated in 2005, and extended in 2007, this measure set legal minimums of renewable fuels to be blended into gasoline, increasing the biofuel volume from nine billion gallons in 2008 to 36 billion gallons in 2022.

To explore this further, Dr. Darrel Good, Professor Emeritus of agricultural economics at the University of Illinois Urbana-Champaign, recently remarked:

“For the most part biodiesel production has been driven by the RFS mandate... As we move forward certainly the mandate will be an important component of whether or not biodiesel production expands.”

In response to the RFS program, many state-level governments offered – and continue to extend – incentives to draw production within their boarders, reaping the economic and environmental benefits of these renewable fuels.

Step Two: Add State-Wide Incentives
Many prairie states have recently extended legislation and, in some cases, incentive funds to promote enhanced biodiesel production.

The measure passed by Iowa legislators, for example, provides a refundable credit for the first 25 million gallons of biodiesel produced in any single plant now through 2017.

Missouri, meanwhile, has a Biodiesel Producer Incentive Fund that grants up to $6 million annually to biodiesel production facilities that are at least 51 percent Missouri owned or use roughly 80 percent of feedstocks originating in the state.

Additionally, Illinois recently extended its pro-biofuels measure, providing 100 percent tax credits for biodiesel blends greater than B10. A measure enacted in 2003, it has popularized the unique B11 blend and, as REG President and CEO Daniel J. Oh explains:"

“Since Illinois’s inception of the B11 blending credits…more biodiesel has been blended in Illinois annually than in any other state…by extending the [measure], the Illinois legislature showcases its commitment to more than 1,500 green collar jobs in the state.”

Step Three: Mix with Abundant Resources
The region’s competitive policy-making, coupled with rich resources, is an essential component of Midwest biofuel production. How? By giving companies more stable and predictable regulations, and incentives to keep green jobs rooted back home.

What goes without saying, however, is none of these innovations or policies would exist if it weren’t for the abundant biomass throughout the Midwest.

Come back in July for our final look at the future of biofuels and the potential energy packed into these fertile plaines.

Produced by: Cassandra Oliveira