The biodiesel industry, the little brother to big ethanol, is growing, and they’re looking for a big break from a Democratic-controlled House that is focused on climate change.
Biodiesel companies are beefing up their teams of lobbyists in Washington to watch for opportunities in the “Green New Deal.” Chief among their goals would be securing a long-term production tax credit, which the Democratic leadership supports.
The companies include some of the largest agribusiness companies in the world, such as Archer Daniels Midland, and account for nearly 5 billion gallons of fuel a year. Out-of-waste greases that restaurants discard daily, vegetable oil, and even algae, they make diesel for trucks, jet fuel for airlines, and heating fuel for homes.
Biodiesel, or renewable diesel, is also a more climate-friendly fuel than its cousin, corn ethanol, and meets the Environmental Protection Agency’s definition of “advanced biofuel.” The EPA requires refiners to blend billions of gallons of such fuels into the market annually.
The EPA designation means that the fuel will cause less carbon dioxide pollution than its corn ethanol cousins. Carbon dioxide is commonly blamed for causing global warming and climate change.
The environmental benefits give biodiesel fuels a leg up in the House, which now features a critical block of progressive lawmakers who favor aggressive government action to counter climate change.
“For those that are coming into office, this is an important concept for them,” said Donnell Rehagen, CEO of the National Biodiesel Board, the lead trade group for the industry. The group is increasing staff at its Washington office to make sure lawmakers understand what the industry means to climate change.
The “Green New Deal” includes, as a key component, a mandatory switch to renewable energy. “Biodiesel is a perfect fit,” says Rehagen. “We’ve been doing this for years. It’s nothing new for us.”
Rehagen and other large industry players say biodiesel could become the country’s leading biofuel because it beats both corn ethanol and electric cars when it comes to emissions.
Neither battery power nor ethanol can tackle the commercial transportation market as effectively as biodiesel, say industry officials, noting that mail carriers such as FedEx and UPS have switched over large portions of their fleets to run on a blend of renewable diesel fuel. Trucks lose fuel efficiency if they switch to higher ethanol fuels such as 85 percent blends, or “E85.” Going all-electric also adds weight, which reduces a vehicle’s overall efficiency and ability to move freight effectively, the biofuel industry argues.
“When you think of the electric vehicle opportunity, it’s really a gasoline, small-vehicle opportunity,” said Chad Stone, the chief finance officer for REG, the nation’s leading producer of biodiesel.
Switching to electric cars makes sense for small cars in regions of the country where the electricity is made from clean-burning power plants such as nuclear and wind, but not coal, Stone said. By burning coal to charge an electric vehicle, “you’re kind of defeating the purpose.”
The emissions benefits become even more conspicuous when considering long-haul 18-wheelers or other heavy-duty big-rig trucks, which cannot easily be transitioned to battery power.
Those vehicles would need an extremely large battery “and just towing that battery around is about all you’re going to get out of that,” said Stone.
“It’s not practical, right now, for those big rigs, but it’s more of a displacer of gasoline in the light-duty vehicle space,” he explained.
Biodiesel also receives support from top lawmakers in both the Senate and House.
House Democratic Speaker Nancy Pelosi, D-Calif., is very supportive. She led the development of the 2007 energy law, which expanded the EPA’s Renewable Fuel Standard to approve biodiesel as an advanced low-carbon biofuel. More important, she backs efforts to extend a seven-year tax credit for the fuel, which industry officials hope to see passed this year.
Sen. Dianne Feinstein, D-Calif., has supported revamping the EPA biofuel program to support fuels that reduce greenhouse gases the most, rather than corn ethanol, which often ranks lower in terms of emissions reductions.
San Francisco, the political hometown of both Pelosi and Feinstein, was one of the first cities in the country to switch its bus fleets over to biodiesel.
Rep. Dave Loebsack, D-Iowa, head of the House biofuel caucus, called biodiesel a “fuel of the future” in a video address to the January biodiesel conference.
Sen. Jeff Merkley, D-Ore., who had in the past been very supportive of electric vehicle legislation, recently touted his state’s efforts to transition to more renewable diesel fuel at the Mayors Conference in Washington, D.C.
Both Oregon and California have low-carbon fuel standards that drive the use of renewable fuels in those states. As a result, the West Coast is a huge market for REG’s fuel, and industry officials believe that the region’s embrace of biodiesel fuels will pressure the federal government to follow suit.
“You have the potential, if Washington state moves, to have the entire West Coast move” on a low-carbon fuel standard, said Scott Hedderich, REG’s executive director focused on the state policy.
