Green Industry Update

Arkansas Alternative Fuels Development Program amended

During the 2009 legislative session, the Arkansas General Assembly amended the Arkansas Alternative Fuels Development Program. The Alternative Fuels Program provides grants for alternative fuel producers, feedstock processors and distributors of alternative fuels. Traditionally, only biofuel and ethanol were considered alternative fuels. Act 977 amends the definition to include compressed natural gas and synthetic transportation fuel. The Act also includes fuel from algae as a biofuel.

Grant funding for alternative fuel producers remains unchanged and is capped at $2 million per producer for improvements and costs associated with alternative fuel production. The cap for feedstock processors was increased to $3 million per processor and the cap for distributors was increased to $300,000 per distributor.

Arkansas’ strong support for alternative fuels has already captured the attention of outside investors as demonstrated by Dynamotive USA, Inc.’s plan to build a biofuel plant in El Dorado. The Alternative Fuels Program was a contributing factor to Dynamotive’s decision to come to Arkansas.

U.S. Department of Energy to fund advanced biofuels research

This month, U.S. Secretary of Energy Steven Chu announced plans to provide $786.5 million from the American Recovery and Reinvestment Act of 2009 to accelerate advanced biofuels research and development and to provide additional funding for commercial-scale biorefinery demonstration projects.

The $786.5 million will be divided as follows:

• $480 million through solicitations for integrated pilot and demonstration-scale biorefineries which will be operational in the next three years;
  
  
• $176.5 million for demonstration or commercial-scale biorefinery projects that were selected and awarded within the last two years;
  
  
• $110 million for biomass research; and
  
  
• $20 million for ethanol research.
  

Biofuel Interagency Working Group established

This month the White House released a memo establishing a Biofuels Interagency Working Group. The Group will be co-chaired by the Secretaries of Agriculture and Energy and the Administrator of the EPA. This Group will be responsible for:

• Developing the nation’s first biofuel market development program to support the development of next-generation biofuels, increase flexible fuel vehicle use and assist in retail marketing efforts;
  
  
• Coordinating infrastructure policies affecting the supply, transportation and distribution of biofuels; and
  
  
• Identifying new policies to promote environmental sustainability of biofuels feedstock production.
  
  

In conjunction with the Group, the Secretary of Agriculture may pursue other biofuel development efforts. These steps may include restructuring existing investments in renewable fuels, providing loan guarantees for biorefineries and providing funding and support for biorefineries, biofuel producers, biomass conversion facilities, renewable energy systems and energy efficiency improvement programs.

EPA proposes national renewable fuel standards

The U.S. Environmental Protection Agency has proposed new rules that will require gasoline and diesel to contain specified percentages of renewable fuels such as cellulosic biofuel, biomass-based diesel, and advanced biofuel. If implemented, the proposed rules are expected to reduce U.S. dependence on foreign sources of crude oil, increase domestic sources of energy, and reduce greenhouse gas emissions.

The rules would also expand the market for agricultural products such as corn and soybeans and open new markets for the development of cellulosic feedstock industries and conversion technologies. The rules are intended address the requirements of the Energy Independence and Security Act of 2007.

Past Green Industry Updates

February 27, 2009