State RFS Waivers Could Derail Advanced Biofuels

Main Category: Pharma Industry / Biotech Industry
Article Date: 29 Apr 2008 - 3:00 PDT

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Granting Texas' or other states' requests for a federal waiver of the Renewable Fuel Standard (RFS) would not reduce food prices but could hinder or delay advanced biofuel research, the Biotechnology Industry Organization (BIO) said. BIO opposes Texas Gov. Rick Perry's request to the U.S. Environmental Protection Agency for a 50 percent waiver of the RFS.

BIO President and CEO Jim Greenwood stated, "Governor Perry has been a friend to the biotechnology industry, supporting research and development of innovations in health, agriculture and advanced biofuels within his state. While we recognize the financial strain for some in the Texas cattle business who face higher grain prices, we must point out that a recent study by the Texas A&M University Agricultural and Food Policy Center concludes, 'Relaxing the RFS does not result in significantly lower corn prices.'

"Texas has a strong interest in promoting advanced biofuels; the state has the potential to be a leading supplier of cellulosic feedstocks as well as biofuel refining and distribution capacity. The RFS is the right policy right now to move the United States as rapidly as possible to sustainable production of advanced biofuels from renewable resources. Ongoing research and development in biotechnology is important to achieving that goal. Relaxing the RFS would not lower food prices, but it could send a signal to the market that would undercut that research."

The Texas A&M study demonstrates:

- "The underlying force driving changes in the agricultural industry, along with the economy as a whole, is overall higher energy costs;

- "With rising energy costs, corn and other commodity prices would have to increase;

- "Corn prices have had little to do with rising food costs; and

- "Relaxing the RFS does not result in significantly lower corn prices."

The study is available here.

Texas Gov. Rick Perry on Friday sent a letter to U.S. Environmental Protection Agency Administrator Stephen L. Johnson requesting the 50 percent waiver, saying that the increased price of corn is damaging Texas' energy and beef industries.

The 2007 Renewable Fuel Standard caps conventional ethanol production at 15 billion gallons and requires the production and use of 21 billion gallons of advanced biofuels by 2022. The combined total of 36 billion gallons will amount to about 20 percent of U.S. transportation fuel needs. Next-generation biofuel technologies that use cellulosic feedstocks are currently being commercialized. One of the primary byproducts of ethanol production, dry distillers grains, is used as a high-protein component of animal feed.

Upcoming BIO Events

- World Congress on Industrial Biotechnology & Bioprocessing
April 27-30, 2008
Chicago, Ill.

- 2008 BIO International Convention
June 17-20, 2008
San Diego, Calif.

- Pacific Rim Summit on Industrial Biotechnology and Bioenergy
Sept. 10-12, 2008
Vancouver, B.C., Canada

About BIO

BIO represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the annual BIO International Convention, the world's largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world.

http://www.bio.org