Aviation Biofuel: Technology-Ready, Needs Capex Infusion, RIN Reforms
By all rights, many believe aviation biofuel producers should be attracting deep-pocketed investors ambitious enough to build the infrastructure necessary to meet a clearly burgeoning industrial-sized demand. At the Aviation Biofuels Development Conference, representatives from eight companies presented strong evidence of a sector that has proven various technologies and is beginning to address its feedstock and cost issues.
Opinion was divided over whether investors would begin returning to the sector after some were burned by losses from first-generation corn ethanol investments several years ago. But participants said reforms to the Renewable Identification Numbers (RIN) regime used to buy and trade it could bridge the gap to industrial scale, and others boasted their product and cost improvements industry’s favorable business opportunities.
A RIN system reformed with some kind of validation from the rule-making underway now would boost the confidence of investors who might be gun shy of biofuel investment, said Graham Noyes, a partner at renewable energy law powerhouse Stoel Rives. “Advanced Biofuel RINs for 2013 are 2.7 bill gallons, or $2.4 billion. Plants will succeed in part because of RIN revenue, and we need that to ramp to a $20-billion industry in the next decade.”