Federal Biogas Policies Update

The 2018 Farm Bill Reauthorization, U.S. EPA renewable fuel targets, and carbon utilization are among the legislative and federal agency activities in 2018.

Maureen Walsh
BioCycle September 2018, Vol. 59, No. 8, p. 25

BioCycle REFOR18The American Biogas Council’s (ABC) Federal Policies Committee educates federal and state policymakers and advocates for favorable federal policies that will increase biogas project development. In 2018, several key pieces of legislation have been introduced that involve biogas. In addition, the Farm Bill is up for reauthorization this year, and the U.S. Environmental Protection Agency (U.S. EPA) recently closed the comment period for its 2019 draft renewable fuel targets under the Renewable Fuel Standard (RFS) program.

Federal Biogas Policies Update

Images courtesy of Storms Hog Farm, Cavanaugh and South San Francisco Scavenger Company

Farm Bill Reauthorization

The Farm Bill conference process started in earnest in September. Both the House and Senate appointed conferees and staff have been working to reconcile the differences between the two bills. From a biogas perspective, the Senate version is much more helpful to the industry as its bill contains both an Energy Title as well as mandatory funding. The House version had no energy title and no mandatory funding. The ABC is continuing to build support for the Senate Energy Title and mandatory funding as members move forward through the conference process.

Farm Bill energy title programs bring significant investment and opportunity to rural America, providing producers with new revenue sources, promoting development in clean, renewable energy, biobased products, and making energy efficiency investments. Due to Federal leadership, rural economic development, jobs, manufacturing, and environmental quality have all seen quantifiable and substantial gains.

For America’s farmers, ranchers and rural small businesses to continue to be leaders in the development and the advancement of the clean energy economy, it is critical the final 2018 Farm Bill reauthorizes programs such as the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program; the Biopreferred program; the Biomass Crop Assistance Program (BCAP); the Biomass Research and Development Initiative (BRDI); the Rural Energy for America Program (REAP); and Bioenergy Program for Advanced Biofuels, again with mandatory funding as passed by the Senate. The Senate version of the Farm Bill contains $50 million in mandatory funding for REAP.

Light Duty NGV Parity Act Of 2018

Senator Jim Inhofe (R-OK), and Representative Bill Johnson (R-OH-06) have introduced in their respective chambers the Light Duty Natural Gas Vehicle (NGV) Parity Act of 2018. The legislation ensures that U.S. EPA provides light-duty NGVs with vastly similar incentives as those provided to encourage automaker support of electric vehicles (EVs). The Act is intended to direct EPA to invite a portfolio of solutions that includes NGVs to maximize the 2012 rulemaking objectives of reduced pollution and petroleum use, and achieve the broader benefits of job creation, economic growth, trade deficit reduction, and energy independence — all while protecting automakers and offering consumers a lower and more stable priced fuel.

The ABC was greatly encouraged to see continued recognition of biogas and renewable natural gas (RNG) and the range of technologies and benefits their use supports. While we do not believe this legislation will pass as a stand-alone bill, it continues to emphasize the role of RNG. We are hopeful that this continued awareness of RNG, along with recent changes at the U.S. EPA, could increase the opportunity for RNG success at EPA. Elements addressed in the Parity Act include:

• Equalizing Regulatory Burden: The Corporate Average Fuel Economy (CAFE) standards allow for incentives to cars and other light-duty vehicles that have reduced emissions. However, despite the technological progress of NGVs, they do not have regulatory parity with other low-emissions vehicles, even though they offer comparable reductions. This legislation would require regulatory standards apply equally across electric and natural gas vehicles.

• Dual Fuel Eligibility: Congress granted regulatory incentives for dual-fuel, or bi-fuel, NGVs but EPA regulations have made it nearly impossible to receive the benefits. The press release issued when Sen. Inhofe introduced the bill in July 2018 stated, “Overwrought regulations require natural gas vehicles meet design features that do not benefit consumers or manufacturers and are not required for electric vehicles.” The Parity Act is designed to ensure that electric and natural gas vehicles are required to meet the same standards for dual fuel eligibility.

Carbon Utilization Act

Senators Sheldon Whitehouse (D-RI) and Michael Bennet (D-CO) introduced, along with Congressmen Scott Peters (D-CA-52) and David Young (R-IA-03) the Carbon Utilization Act of 2018. This bill would promote biogas technologies as part of a broad mix of energy sources. The bill also codifies the recommendations made in the Biogas Opportunities Roadmap of 2014 (see “Federal Biogas Opportunities Roadmap,” Sept. 2014) by encouraging collaboration between government agencies and creating educational programs around biogas.

ABC is very encouraged to see greater recognition of biogas technologies and all the benefits these systems can provide including methane capture and beneficial use of the biogas and nutrients. While ultimately this piece of legislation is unlikely to pass as a stand-alone bill, it still draws valuable attention to the biogas industry and the American Biogas Council. We are hopeful that this continued awareness increases the probability of success for similar language contained in the Senate Farm Bill — which hopefully will be retained during the conference process.

2019 Renewable Fuel Targets

The U.S. EPA released its 2019 draft renewable fuel targets for the Renewable Fuel Standard (RFS) on June 26, 2018. Comments to the proposed rule were due on August 17. Overall, the picture improved for biogas as the rule calls for 358 million gallons of CNG/LNG derived from biogas. This Renewable Volume Obligation (RVO) derived from biogas is an increase of 84.4 million gallons over the 2018 volumes. In its proposal, EPA also confirmed that biogas derived CNG/LNG is a mature industry and, therefore, its use of a broad methodology to determine future year’s targets are warranted. Finally, as expected, EPA proposed using the “cellulosic waiver authority” to lower the volumes of cellulosic fuel from their statutory levels as well as lower the corresponding levels of advanced biofuel and total renewable fuel.

The proposed rule is generally more positive than the 2018 proposal, however it does contain a few disappointments. While ABC did not expect the U.S. EPA to address the eRIN pathway in this rule (biogas pathway for electric vehicles), the publication of the proposed rule confirms that activation of the eRIN pathway is further delayed. Additionally, the proposed rule does not address the continued use of small refinery waivers (see sidebar) that negatively affect the broader market for RINs — and especially the small buyers of RINs who are often the buyers of D3 and D5 RINs. The biogas industry produces D3 and D5 RINs. (Editor’s Note: RINs — Renewable Identification Number — is a serial number assigned to a batch of biofuel for the purpose of tracking its production, use, and trading as required by the RFS.)

Maureen Walsh is Director of Policy for the American Biogas Council. She has spent the last two decades serving as a senior legislative, regulatory and government relations advisor to a wide range of nonprofit and corporate clients.

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