Environmental Engineering Reference
In-Depth Information
The Energy Policy Act (EPAct) of 2005 approved several major incentives to usher in a new
era of renewable transportation fuels (Public Law 109-58 2005).
The most widely publicized pro-
vision of EPAct, the Renewable Fuel Standard (RFS), applies to corn and cellulosic ethanol and
will operate in the place of the now eliminated oxygenate requirement for reformulated gasoline.
Implementation of the RFS by the U.S. Environmental Protection Agency (EPA) began in 2006 at
1.5 × 10
10
L/year (which was nearly met in 2005) and was scheduled to increase to 2.8 × 10
10
L/year
in 2012. In light of the current market for ethanol, EPAct has provided only a modest production
boost. Additional provisions of EPAct were designed to improve commercialization prospects for
cellulosic ethanol through increased research and development funding in all aspects of the indus-
try, including feedstock development, processing technology, co-product production, and systems
optimization (Wyman 2003). Project financing and funding, a major bottleneck (Hamelinck et al.
2005), received attention as well through a series of large grants and loan guarantees for biorefinery
development and commercialization (Public Law 109-58 2005). Overall, EPAct provides a short-
term boost to accelerate commercialization and technological development while also attempting
to cement a place for the new technology in the longer-term ethanol market. Implicit in this is the
assumption that cellulosic ethanol is capable of providing larger societal benefits than corn ethanol,
although in the near future, corn ethanol will still dominate the market.
The prospects for cellulosic ethanol received a much larger boost through passage of the Energy
Independence and Security Act in December 2007. This law revises and extends the RFS begin-
ning in 2008 at 3.4 × 10
10
L/year, up to a rather ambitious 1.36 × 10
11
L/year by 2022. Of this total,
no more than 5.7 × 10
10
L/year will come from cornstarch, with the remaining 7.9 × 10
10
L/year to
come from advanced biofuels with greatly reduced greenhouse gas emissions (including biodiesel).
Over 75% of all advanced biofuels will eventually come from cellulose, and this part of the mandate
could be met by any combination of ethanol and other alcohols (Sissine 2007).
During the revival of the domestic ethanol industry in the late 1970s, more than a dozen state gov-
ernments quickly approved partial or total gasohol exemptions from state road use taxes (Solomon
1980; Solomon et al. 2009). These state programs are generally similar to the federal programs, and
as of 2010, 32 states were supporting ethanol development (Voegele 2010). The most important state
policies included mandates and various levels of excise tax exemptions.
The policy environments in Minnesota and Iowa have been especially strong, combining mea-
sures that support production and consumption of ethanol (Solomon et al. 2009). Instrumental to
this effort in Minnesota has been a 1997 state requirement that all gasoline sold in the state must
have a 10% ethanol content. An increase to a 20% mandate was approved in Minnesota in 2005
(which would take effect in 2013) pending the granting of a waiver by EPA under the Clean Air
Act. Similar laws that mandate a 10% ethanol-blended fuel were passed in Hawaii and Montana
in 2005, and Missouri, Washington and Oregon in 2006-2007, and Florida in 2008 (RFA 2011).
The requirements have varying phase-in dates. Kansas has a 10% ethanol blend mandate that only
applies to state fleet vehicles. Iowa joined Minnesota in 2006 by approving a comprehensive state
RFS—a 10% mandate for 2009 that increases to 25% in 2020. In addition, a retail tax credit on E85
(a blend of 85% ethanol and 15% gasoline) of $0.07/L ($0.25/gal) was approved, although it is being
lowered over time. This compares with Minnesota, which has a state fuel tax exemption on E85 of
$0.015/L ($0.058/gal) and an ethanol production payment of $0.05/L ($0.20/gal). Minnesota also
has the most extensive E85 infrastructure in the country, with 360 retail fueling outlets (DOE 2011).
12.2.2 E
uropEan
u
nion
The European Union (EU) also provides support for a domestic biofuels industry, most notably
through its Biofuels Directive of 2003 and the Renewable Energy Directive of 2008 (Rosch and
Skarka 2008). Only a small amount of ethanol is produced, mostly from sugarbeets, wine, wheat,
and corn in France, Germany, and Spain. More significant biofuel production is in the form of
biodiesel from rapeseed, especially from Germany (the world leader) and to a lesser extent from
