Energy

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.”

Eric McAfee, CEO for Aemetis, which has developed a 100 percent drop-in bio jet fuel using a drought-loving, non-food Ethiopian mustard seed hybrid called carinata, was more specific about necessary RIN system reform. “The most urgent thing that needs to happen in aviation biofuels is to level the playing field with Brazilian ethanol,” he declared.  The EPA included Brazilian ethanol in its original definition of “advanced biofuel” because it derived from sugar cane rather cornstarch, providing its producers a $0.36-per-gallon subsidy.

via Aviation Biofuel: Technology-Ready, Needs Capex Infusion, RIN Reforms | Renewable Energy News Article.

Categories: Energy, Transportation