Infrastructure Investments to Reach U.S. Renewable Fuels Goals

The U.S. must increase incentives for a wide variety of biofuels infrastructure investments if the nation is to meet the federal renewable fuels standard (RFS), according to a new report released by a task force of leading energy infrastructure experts. In the new study, the Biofuels Infrastructure Task Force, convened by the National Commission on Energy Policy (NCEP), examined the infrastructure implications of the federal Renewable Fuels Standard, which commits the U.S. to 36 billion gallons of biofuels production by 2022 from a current level of about 9 billion.

The bipartisan group composed of experts from relevant industries found that the relatively swift shift in the composition of the nation’s transportation fuel supply has profound implications.

“The renewable fuels standard is ambitious,” said Norm Szydlowski, chairman of the Biofuels Infrastructure Task Force. “To meet its timetable, approaches to biofuels infrastructure upgrades must also be ambitious.  Whether its vehicles, pipelines, or pumps, new investment will be needed to meet the 36 billion gallon mandate.”

The report identified several key issues. The RFS will require that the nation transition to a broad-based use of a 10 percent ethanol blend as well as increased use of higher-ratio blends. Transporting and blending this much ethanol will stress existing networks and require new infrastructure investment.

In the current economy however, it may be difficult for businesses to access capital and make large investments in new infrastructure such as biofuel production facilities, blending terminals, pipelines, unit trains and terminals, ethanol retail facilities and flex fuel vehicles to support national biofuels distribution, without increased federal tax and other incentives.

The Task Force developed several recommendations including growing the flex fuel vehicle (FFV) fleet. Reducing or limiting the number of different blends that fuel refiners must produce to meet state-level specifications and simplifying permitting processes along all aspects of the biofuels supply chain would help to reduce costs and lead times for infrastructure investment

The report said that market confidence in the government’s commitment to the RFS is a prerequisite for timely private large-scale biofuels investments.

Copies of the full report can be downloaded by clicking here.

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