Administration Eyes Drop-In Fuels to Meet Shortfall in Cellulosic to Meet RFS

Date: January 27, 2012

Source: News Room

The Obama administration, led by the US Department of Agriculture, is seeking to encourage the production of advanced biofuels, which could be commercialized sooner than cellulosic fuels, to help industry meet EPA's supply mandates for biofuels under the renewable fuel standard (RFS). So far, the USDA is seeking to leverage increased demand by the military for so-called "drop-in" fuels to spur production of advanced biofuels for vehicles that are easier than cellulosic ethanol to use in existing fueling infrastructure, though the administration continues to back cellulosic fuels, which are usually produced from corn waste, switch grass and other sources. Agriculture Secretary Tom Vilsack has in recent weeks pointed to new innovation in advanced biofuels in the last six months that could change earlier expectations on how the country will meet its RFS goals. Last month EPA finalized its RFS blending requirement of 8.65 million gallons for 2012, up 2 million gallons from 2011. Consequently, industry is concerned about inadequate supply to meet EPA's mandates because they fear they will be forced to purchase "credits" to offset any blending shortfalls. They cite data from the Energy Information Administration (EIA) that showed production levels unable to meet the EPA goal.

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