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Biofuel, farm groups file suit over EPA auto standards

  • Spanish Market: Biofuels
  • 10/09/24

Road fuel industry representatives have filed suit before the US Court of Appeals for the DC Circuit challenging the Environmental Protection Agency's (EPA) finalization of tailpipe emissions standards.

The finalized EPA standards would force automakers to decrease the CO2 emissions of cars and trucks made between 2027 and 2032.

The brief draws support from 56 groups, rangingfrom agriculture labor unions, the automotive industry and the American Farm Bureau Federation to organizations representing shipping, retail fuel distributors, petroleum refiners, biofuel producers, manufacturing, and corn grower associations.

Several petitioners behind the brief filed a lawsuit in June of this year following regulations that the EPA said would cut road fuel consumption by 2.6mn b/d.

The petitioners assert the claim that the EPA lacks statutory authority to regulate tailpipe emissions and that the regulations currently in place would favor electric vehicles over internal combustion engine automobiles. Fewer internal combustion vehicles soften the demand for renewable fuels as a result, the filers argue. According to the EPA, electric vehicles made up 7.5pc of light and medium duty vehicle sales in 2022, but by 2032, 68pc of corresponding sales must be electric vehicles to comply with the regulation.

The brief goes on to scrutinize the EPA's calculations used to craft policy that support electric vehicle adoption, suggesting the finalized standards fail to account for emissions created in the production of electric vehicles as well as the ability of renewable fuels to lower emissions as a substitute good.

The Renewable Fuels Association, one of the petitioners named in the brief, voiced its concerns that the EPA ignores the benefits of high octane ethanol and more fuel efficient internal combustion engines' ability to lower emissions at a lower cost to domestic consumers. It also said the tailpipe emissions standards would conflict with Congress' Renewable Fuel Standard (RFA), which mandates set volumes of biofuel in the nation's road fuel supply.

"While we certainly share the Biden administration's vision for reducing carbon emissions from transportation, EPA's tailpipe rule is clearly the wrong way to pursue that goal and the agency obviously overstepped its authority," RFA chief executive Geoff Cooper said.

The Illinois Corn Growers Association echoed the sentiments from the perspective of the agricultural sector, as president Dave Rylander voiced the industry group's goals of building a robust farm economy while opposing the EPA's regulations as they "exceed their authority as a government agency and jeopardize farm family profitability."

The group claims that President Joe Biden's administration's target for electric vehicle growth will have adverse effects on corn demand by way of decreases in biofuel production.

The EPA is expected to respond by 26 November. Members of the US House of Representatives have drafted a joint resolution attempting to block the standards from going into effect.


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01/10/24

Clean fuel credit not on Treasury priority list

Clean fuel credit not on Treasury priority list

New York, 1 October (Argus) — The US Department of Treasury says it will prioritize issuing final guidance around qualifying for a handful of Inflation Reduction Act clean energy tax credits before the end of President Joe Biden's administration, though guidance around a new credit for low-carbon fuels will likely take longer. The agency's new timeline suggests that granular rules around how to qualify for the 2022 climate law's clean fuels incentive will ultimately be decided by the winner of this year's presidential election. Kicking off in January and lasting through 2027, the 45Z tax credit will replace a suite of expiring fuel-specific credits and offer up to $1/USG for low-carbon road fuels and up to $1.75/USG for low-carbon aviation fuels. Treasury is still "actively" working on guidance around the 45Z incentive, Treasury acting assistant secretary for tax policy Aviva Aron-Dine told reporters today. But unlike for other credits, officials have not provided any timeline for proposing or finalizing that guidance or any signal of whether they could issue any safe harbor assurances before final guidance is available. The Biden administration has not yet clarified how it will calculate greenhouse gas emissions or account for the benefits of "climate-smart" agricultural practices for fuels derived from crop feedstocks, potentially deterring investments until final guidance is available. The 45Z credit requires fuel to meet an initial carbon intensity threshold and then increases the subsidy as a fuel's greenhouse gas emissions fall. Policy clarity is essential, biofuel groups say, since fuel and feedstock offtake contracts are hashed out months in advance and the credit is relatively short-lived compared to other Inflation Reduction Act incentives. Some farm state lawmakers have also pushed for final guidance to bar refiners using foreign feedstocks — such as used cooking oil from China — from being able to claim the credit. The Biden administration still expects to finalize guidance for the 45V clean hydrogen tax credit by year-end out of recognition that the industry "needs certainty" to invest, Aron-Dine said. The final guidance will provide "appropriate adjustments and additional flexibilities" to help projects move forward, she said, while adhering to requirements to consider indirect greenhouse gas emissions caused by the production of clean hydrogen. Treasury also expects to issue final guidance by the end of the administration on the 45Y clean electricity production credit and clean electricity investment credit, a technology-neutral tax credit it proposed earlier this year. The final guidance will continue the "explosive growth" of wind and solar and also provide tax credits to emerging technologies that produce no net greenhouse gas emissions, Aron-Dine said. Other tax credits set to be finalized by the end of the administration include the section 48 investment tax credit and the 45X advanced manufacturing production credit that is supporting the buildout of domestic supply chains, Aron-Dine said. By Cole Martin and Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Some eastern US rail shipments restart after Helene


30/09/24
30/09/24

Some eastern US rail shipments restart after Helene

Washington, 30 September (Argus) — Some railroad operations in the southeastern US have resumed in the aftermath of Hurricane Helene, but major carriers warn that some freight may be delayed while storm-damaged tracks are repaired. Rail lines in multiple states were damaged after Hurricane Helene made landfall on the northeastern Florida coast on 26 September as a category 4 storm and traveled northwards as a downgraded but still dangerous storm into Georgia, Tennessee, and the Carolinas. The storm left significant rain and wind damage in its wake, including washed-away roads, flooded lines, downed trees and power outages. Eastern railroads CSX and Norfolk Southern (NS) said they are working around the clock to restore service to their networks. Norfolk Southern said it had made "significant progress" towards its recovery with most major routes back in service including its Chattanooga, Tennessee, to Jacksonville, Florida, line as well as its Birmingham, Alabama, to Charlotte, North Carolina route. Norfolk Southern said freight moving through areas that are out of service could "see delays of 72 hours". Several of Norfolk Southern's other routes remain out of service, including rail lines east and west of Asheville, North Carolina, because of historic levels of flooding. There are multiple trees to remove along a 70-mile stretch from Macon, Georgia, to Brunswick, Georgia. And downed power lines are keeping the railroad's lines from Augusta, Georgia, to Columbia, South Carolina, and Millen, Georgia, out of service. CSX said "potential delays remain" but did not provide specifics. However, the railroad said it had made "substantial progress" in clearing and repairing its network. The railroad's operations in Florida have mostly reopened, as have rail lines in its Charleston subdivision, which crosses South Carolina and Georgia. But bridge damage and major flooding has kept CSX's Blue Ridge subdivision out of service. A portion of the line running from Erwin, Tennessee, to Spartanburg, South Carolina, has been cleared, but CSX said "a long-term outage" is expected for other parts of the rail line. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US July ethanol output highest ever: EIA


30/09/24
30/09/24

US July ethanol output highest ever: EIA

Houston, 30 September (Argus) — US production of fuel ethanol in July set a monthly record at 1.09mn b/d as producers were incentivized by low feedstock prices amid robust demand. July output was up by 5.1pc from the previous month and 5.6pc higher than a year earlier, according to data released by the Energy Information Administration (EIA) on Monday. Output during the month was 2,000 b/d above the previous record set in August 2018. Low prices for corn feedstock, which arrived during the demand-heavy summer driving season for gasoline — a proxy for ethanol blending and demand — helped bolster production rates. Front month CBOT corn prices in July averaged 398¢/bushel, the lowest since September 2020 and 28pc less than a year earlier. Value for corn has been under pressure from healthy domestic crop yields. US supplied finished motor gasoline reached 9.3mn b/d, up by 177,000 b/d from June and about 300,000 b/d higher than a year earlier. Ethanol blending in July was 914,000 b/d – little changed over the month and from a year earlier. By Payne Williams Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

SAF market is far from takeoff: Airlines


27/09/24
27/09/24

SAF market is far from takeoff: Airlines

New York, 27 September (Argus) — Airline executives descended on climate events in New York this week to emphasize their commitments to use more sustainable aviation fuel (SAF) — and to hint that these goals will prove difficult absent additional government support. At events tied to the UN General Assembly and Climate Week NYC, supporters of alternative jet fuels said that a range of policies were growing the market, including tax incentives, US states' low-carbon fuel standards and increasingly stringent mandates for SAF usage in the EU. While US production capacity of SAF is expected to rise significantly in the coming years, there is still concern that limited supply and a steep premium to conventional petroleum jet fuel will hinder adoption. SAF "will always be more expensive because it's a better product," said Aaron Robinson, vice president of US SAF for the International Airlines Group, a holding company that includes British Airways and Iberia. Executives, while calling generally for more policies to stimulate supply and demand, were more inclined to support subsidies over mandates. The airline industry already runs on tight margins, and executives fear that prospective customers could stay home instead of paying more for lower-carbon flights. "I think the worst thing we could do right now is choose a very short-term solution that takes that green premium and directly saddles it onto our customers," said Delta Air Lines chief sustainability officer Amelia DeLuca. She argued that the EU's SAF mandates were "pushing the fuel forward a little bit too fast in terms of where the supply and the green premium are." Still, the most prominent government subsidy for SAF — a tax credit kicking off next year in the US that will offer up to $1.75/USG for domestic SAF producers — was described as helpful but insufficient. The Inflation Reduction Act, which included that credit, was "historic, monumental, not good enough," said United Airlines chief sustainability officer Lauren Riley. President Joe Biden's administration has frustrated US biofuel groups by not yet providing guidance around qualifying for that credit, known as "45Z," which requires SAF to meet an initial carbon intensity threshold and increases the subsidy as the fuel's greenhouse gas emissions fall. Regardless, airlines and fuel producers say that the credit — which expires at the end of 2027 — is too short-lived to build up a supply chain. Policies like the 45Z credit should "have an end" but the end needs to be "far enough into the future," ExxonMobil vice president of strategy and planning for product solutions Tanya Vetter said this week at a clean energy event in Washington, DC. Competing interests Prolonging the 45Z credit would require legislation, but reopening a debate over clean fuels incentives in Congress could divide groups generally supportive of SAF. Airlines and refiners support more flexibility around feedstocks — including fuels produced from foreign sources like Chinese used cooking oil and fuels produced by co-processing petroleum — while farm groups want policy to increase demand for domestically produced vegetable oils and corn ethanol. A bipartisan group of farm state lawmakers this week introduced legislation that pairs an extension of the 45Z credit through 2034 with restrictions on fuels sourced from foreign feedstocks. With Congress set to debate tax policy next year regardless of who controls the White House, airlines supportive of more generous and longer-lasting SAF subsidies will also have to contend with Republicans that want to repeal much of the Inflation Reduction Act and with competing lobbies that would rather devote funds to extending other incentives. For instance, Justine Fisher — the chief financial officer at the Canadian carbon capture company Svante — signaled interest this week in increasing a tax credit for carbon capture, utilization, and storage that is included in the law. The incentive, which offers $85/metric tonne for captured carbon and is more popular than other parts of the law among oil and gas companies, is currently not "high enough to make project economics work," she said. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Jet Zero gets $9.6mn in grants for Australia SAF plant


27/09/24
27/09/24

Jet Zero gets $9.6mn in grants for Australia SAF plant

Sydney, 27 September (Argus) — Australian bioenergy developer Jet Zero gets A$14mn ($9.6mn) of grants from federal and state governments for its proposed Project Ulysses, a sustainable aviation fuel (SAF) project in the northern Queensland state city of Townsville. The joint funding consists of A$9mn from the federal Australian Renewable Energy Agency (Arena) and A$5mn from Queensland's state government to develop the local production plant and build SAF value chains. Project Ulysses plans to utilise agricultural by-products to manufacture 102mn litres/yr of SAF and 11mn l/yr renewable diesel. Jet Zero will use the funds to complete front-end engineering and design of the plant and progress commercial deployment of alcohol-to-jet (AtJ) SAF technology. Jet Zero in February signed a licence and engineering agreement to use US sustainable fuels company LanzaJet's AtJ technology which converts bioethanol into SAF and renewable diesel. The funding complements an A$30mn investment by project partners Qantas, Airbus and Idemitsu Kosan, Jet Zero said on 27 September. The transport sector accounts for about one fifth of Australia's total greenhouse gas emissions but scheduled closure of coal-fired electricity generators means it could be the largest source by 2030, as Canberra turns its attention to decarbonising the industry via a certification scheme for low-carbon liquid fuels. . By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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