1. Advanced Biofuel Opportunities for Every State: Guidebook of State Policies Carol Werner Environmental & Energy Study Institute Presented at: Wisconsin Legislative Council, Special Committee on Domestic Biofuels October 14, 2008 Madison, Wisconsin

2. EESI: Advancing Innovative Solutions!
Dedicated to promoting sustainable societies through innovative policies on energy, climate, transportation, agriculture, buildings, and smart growth
A non-profit organization founded in 1984, by a bipartisan Congressional Caucus
Provides timely information regarding science, policy, and technologies
Conducts ~20 Congressional briefings a year
Builds coalitions and networks
Publishes 3 electronic newsletters
BCO – Bioenergy, Climate Protection & Oil Reduction
Climate Change News
Clean Motion
EESI Associates Program allows companies and individuals to participate
5/10/2018
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3. Broad Biomass Policy Objectives
Climate Change
Environmental Stewardship
National Energy and Security
Public Health
International Competitiveness
Economic Development through Local Ownership
Diversify and Sustainably Grow the Domestic Agriculture Portfolio while Decreasing Dependence on Export Markets
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4. Environmental and Energy Study Institute
Overview
National Renewable Fuel Standard
Low carbon biofuel production provides opportunities for all states
New EESI guidebook: Advancing Commercial Scale Production of Low Carbon Biofuels
Methodology
Policy objectives
Policy options
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Environmental and Energy Study Institute

5. Renewable Fuel Standard (RFS)
New target of 36 billion gallons by 2022 (9 billion in 2008)
15 billion gallons of conventional biofuel (ethanol from corn starch) – Lifecycle GHG emissions from new fuel production must be 20% less than 2005 baseline
21 billion gallons from advanced biofuels: 50% less GHG than baseline
Biomass-based diesel
50% less GHG than baseline
Cellulosic biofuel
60% less GHG than baseline
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6. Environmental and Energy Study Institute
Advanced Biofuel
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7. Opportunities for All States
National RFS provides a guaranteed market for feedstocks and low carbon biofuels
Local source of renewable energy
Diverse and plentiful across the country
Appropriate scaled technologies keep this renewable energy source local
Farmers and foresters across the country benefit
Research capacity of states will lead in R&D
Manufacturing capacity could be put back to work
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8. Cellulosic Biofuel Projects as of July 2008
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9. Advancing Commercial Scale Production of Low Carbon Biofuels
Sneak peek at new EESI state level low carbon biofuel policy guidebook
Goals of guidebook:
Determine what incentives best support the commercialization of low-carbon advanced biofuel technologies
Identify ways federal and state incentives can work together
Determine how states can position themselves to help meet federal biofuel mandate
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Environmental and Energy Study Institute

10. Environmental and Energy Study Institute
Methodology
Establish diverse Advisory Committee
Analyze effectiveness of current biomass incentives
Builds off of 3 year USDA Biomass Incentives Project (EESI, North Carolina Solar Center and New Uses Council)
Identify policy objectives
Develop policy options
Incorporate input from Advisory Committee
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Environmental and Energy Study Institute

11. Environmental and Energy Study Institute
Advisory Committee
Committee Representation
Government
Industry
Non-profit
Environmental
Economic Development
Academics
Regionally Diverse
University of Florida
National Council of State Legislatures
Council of Western State Foresters
Climate Solutions
Environmental Defense Fund
Southern Growth Policies Board & SAFER Alliance
Southern Alliance for Clean Energy
Western Governors’ Association
New Fuels Alliance
National Wildlife Federation
Washington State University Extension Energy Program
National Governors Association
Renewable Fuels Association
U.S. Department of Energy Biomass Program
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Environmental and Energy Study Institute

12. Environmental and Energy Study Institute
Policy Objectives
Resource assessments
Sources of biomass
Available, quantity and cost
Adequate infrastructure
Removal, transportation, storage and cost
Human resources
Research, manufacturing and training capacity
Innovative and coordinated research
Research, development and deployment of technologies along the whole supply chain
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Environmental and Energy Study Institute

13. Policy Objectives cont.
Infrastructure
Not focused on fuel infrastructure
Feedstock infrastructure (harvesting, storage, and transportation)
Reduce the risk of investing
Finances and economics
Appropriate business models including multi-year contracts, capital investment, long-term incentives, risk management programs and other finance mechanisms
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14. Policy Objectives cont.
Regulatory conditions
Focused on funding and permitting difficulties
Flexibility in government agencies
Unique challenges and opportunities
Stakeholder perceptions & political priorities
Multiple benefits of biomass technologies
Local participation/ buy-in
Finding a champion: community or political
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Environmental and Energy Study Institute

15. Environmental and Energy Study Institute
10 Policy Options
Low Carbon Fuel Standard
Innovative and Coordinated Research Initiatives
Interagency Collaboratives
Tax Incentives
Grant and Loan Guarantee Programs
Public Education and Outreach Programs
Easement Programs
Sustainable Agriculture Programs
Sustainable Forestry Programs
Municipal Waste Utilization Initiatives
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16. Low Carbon Fuel Standard
Requires average level of performance (i.e. carbon intensity) making policies technology and feedstock neutral
Can encourage investment along the whole supply and production chain
Guarantee market for low carbon fuels
Best implemented on regional or national scale
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Environmental and Energy Study Institute

17. Low Carbon Fuel Standard e.g.
California
Motivation: Reduction of greenhouse gas emissions
Reduce the carbon intensity of the state’s transportation fuels by 10 percent by 2020
Policy allows refiners, blenders, producers, and importers to trade and bank credits for carbon reductions
Should be complemented with incentives that encourage low carbon production
Feedstock incentives: sustainable agriculture and forestry programs
Advanced conversion technologies: tax credits, grants, or loan programs
Note: CA public meeting to discuss the LCFS draft policy framework, October 16, 2008 – webcast available,
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18. Innovative & Coordinated Research Initiatives
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19. Innovative & Coordinated Research Initiatives
Helps industry move past the “chicken and egg” dilemma
Involves many stakeholders (public-private partnerships)
May address the entire supply
chain
Leadership from governmental
champions is key
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Environmental and Energy Study Institute

20. Innovative & Coordinated Research Initiatives e.g.
University of Tennessee Biofuels Initiative (UTBI)
Covers feedstock production from farmers to conversion technologies
Feedstocks
Switchgrass incentive program - farmers are paid $450 per acre to produce perennial feedstock in advance of a mature market
20 switchgrass research and development projects in areas of breeding, planting, management, harvesting, storage, transportation, and pre-processing
Conversion Facility
DuPont Danisco Cellulosic Ethanol LLC: 250,000 gallon/year biorefinery -operational in late 2009
$40.7 million from the state, leveraging $140 million of investment to develop commercial scale biorefineries (not just pilot facility)
Research
Oak Ridge National Laboratory (ORNL) received DOE funding for Bioenergy Science Centers
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21. Interagency Collaboratives
Helps conduct assessments of potential biomass feedstocks, human resources, and existing infrastructure
Creates a general roadmap for achieving commercial scale production
Helps attract new projects by coordinating funding and streamlining the permitting and approval process for facilities
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Environmental and Energy Study Institute

22. Interagency Collaboratives e.g.
Washington State ‘Bioenergy Team’
Biomass assessment: conducted by the Department of Ecology and Washington State University (WSU)
Focused on under-utilized material that could be converted to fuels, power, or products without disrupting other industries’ supply chains
‘Bioenergy Team’ including:
Departments of Agriculture, Ecology, Transportation, Community Trade and Economic Development, the Conservation Commission, WSU, and the USDA Rural Development Energy office
Encourages sustainable biomass industry
Roadmap, website for centralized information for industry, consumers, feedstock producers, etc., and makes policy recommendations.
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Environmental and Energy Study Institute

23. Environmental and Energy Study Institute
Tax Incentives
Reduce risk of investing in new technologies and systems
Help account for the associated positive externalities and to help level the playing field with fossil fuels
Targeted at unique barriers in each state
Feedstock production
Targeted at unique opportunities in each state
Pulp-paper, dairy or other industries
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Environmental and Energy Study Institute

24. Environmental and Energy Study Institute
Tax Incentives e.g.
Oregon Tax Incentives
Production & collection of biomass
Targeted at foresters, farmers and collectors of raw materials – reduces risk for producers
Compared to credits for the biofuel producer, where the incentive may ‘trickle down’ to the feedstock producers
Already having impact: now economically viable to use logging residues for power production
Helps create the infrastructure to collect, transport and store feedstocks that can be used in future biofuel production chain
Credit for ‘neat ethanol or pure bio-oils’ producer
Created to address the high cost of equipment (oil-seed crushers) to produce intermediary biofuel products
Business Energy Tax Credit (BETC)
Created to overcome high up-front costs of renewable energy projects
Unique options: ‘pass-through’ and ‘carry forward’
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Environmental and Energy Study Institute

25. Grant or Loan Guarantee Programs
Stimulate capital investment
Helps leverage federal and private capital
Moves technologies through the “valley of death” from demonstration to commercial scale production
May be targeted at specific technological barriers
Helps achieve other political priorities and societal needs
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Environmental and Energy Study Institute

26. Grant or Loan Guarantee Programs e.g.
Florida’s Farm-to-Fuel Grant Program
Matching grants to bioenergy projects
Research, development, or demonstration ($3 M) and commercialization projects ($22 M)
Preference to projects that are energy efficient, use Florida-Grown biomass, and innovative technologies
New York State (2007) Pilot Cellulosic Ethanol Facility
Achieve commercial scale cellulosic production
Grant proposals were required to show that they could use the information gained from the operation of the pilot scale facility to develop a commercial scale facility
Both states had political champions for their programs
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Environmental and Energy Study Institute

27. Public Education and Outreach
Helps build support for technologies that are unfamiliar
Galvanize support by bringing stakeholders into the decision-making process
emphasize multiple benefits of technologies, oil reduction, job creation, climate change mitigation etc.
Should be encouraged on a state or local level to deal with concerns about specific projects
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Environmental and Energy Study Institute

28. Public Education and Outreach e.g.
Los Angeles Solid Waste Integrated Resources Plan (SWIRP)
Based on successful Bureau of Sanitation’s wastewater integrated resources planning (IRP)
Includes many state and local agencies
Engaged local stakeholder groups through a grass roots public outreach campaign
Effort began with one-on-one interviews with business, religious, and academic leaders and then moved to house meetings, regional workshops, and citywide conferences
Objective to develop a 20 year road map for local solid waste management
Possible biorefinery model to be used for conversion of solid waste
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Environmental and Energy Study Institute

29. Environmental and Energy Study Institute
Easement Programs
What is an easement?
A voluntary, legally binding agreement in which a private landowner allows another entity to define the use of his land for a set period of time or in perpetuity, usually in return for a payment or tax break
Protects open spaces for multiple uses
Provides a low carbon biofuel feedstock
Simple model that is well established
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Environmental and Energy Study Institute

30. Environmental and Energy Study Institute
Easement Program e.g.
Reinvest in Minnesota – Clean Energy Program
Specific to bioenergy crop production that complements water quality, soil health, reduction of chemical inputs, soil carbon storage, biodiversity, and wildlife habitat
Administered by the Board of Water and Resources
Targets areas of the state for growing native perennial bioenergy crops for periods of at least 20 years: clustered areas
Payment rates increase as more native perennial or woody species are planted to address specific local environmental benefits
Note: State legislature has not funded program; matching with public education campaign could assist funding prospects
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Environmental and Energy Study Institute

31. Sustainable Agriculture Programs
Helps agricultural feedstock
producers lower their life-cycle
carbon emissions through
education, technology transfer, and/or financial incentives to use low carbon practices
Achieves complementary objectives:
Clean water, soil health, biodiversity, reduce nutrient run off etc.
Prepares farmers/foresters for climate legislation
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Environmental and Energy Study Institute

32. Sustainable Agriculture Programs E.g.
Maryland
Agricultural Water Quality Cost-Share Program pays landowners to plant winter cover crops (bioenergy crops) to reduce soil erosion and nutrient runoff
Manure Transport/Matching Program was developed to reduce nutrient runoff
Provides $20/ton to cover costs of transporting, loading, and handling excess manure from poultry, dairy, beef, and other animal operations
Montana Organic Fertilizers
Allows taxpayers to deduct expenditures for the purchase of organic fertilizer
Iowa Field Days
Practical Farmers of Iowa Field Days show farmers ‘innovative farming practices, share on-farm research results, and build urban-rural understanding
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Environmental and Energy Study Institute

33. Sustainable Forestry Programs
Provides assistance in forest management through guidelines and plans which focus on:
biological diversity, productive capacity, forest health, soil and water resources, carbon cycles, socio-economic impacts
Provides low-value material markets
Focuses financial assistance on harvesting equipment
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Environmental and Energy Study Institute

34. Sustainable Forestry Programs e.g.
Minnesota
Forest Resources Council Created guidelines for sustainably managed woody biomass
Created a tax incentive for harvesting equipment which lower the collection cost of woody biomass
New York’s Forest Utilization and Marketing Program
Information sharing program
Releases stumpage price reports, timber harvest reports, and directories of companies which utilize forest products
Helps facilitate a market for forest products
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Environmental and Energy Study Institute

35. Waste Reduction Should Be First Priority….
Municipal Waste Utilization Initiatives
Waste Reduction Should Be First Priority….
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Environmental and Energy Study Institute

36. Municipal Waste Utilization Initiatives
Waste Reduction Should Be First Priority…
Potential low carbon biofuel feedstock that is especially important in urban areas that have abundant and renewable sources of biomass
Could reduce the amount of waste going to landfills
Could reduce costs associated with shipping waste to more distant landfills
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Environmental and Energy Study Institute

37. Municipal Waste Utilization Initiatives e.g.
Maryland, New Jersey, Hawaii include some kinds of waste materials in energy incentive definitions
Florida Waste Diversion Goal
Half of their waste reduction objective may be met by converting yard waste or other clean post-consumer wood or paper waste into biofuels
Must continue active composting program
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Environmental and Energy Study Institute

38. Biomass can be a part of the Clean Energy and Climate Solution
There is No Silver Bullet
New Policies
New Technologies
New Feedstocks (including wastes)
Conservation & Efficiency Efforts
Decreased Petroleum for Transportation Needs
Flex-Fuel Vehicles/Plug-In Hybrids
Biobased products and renewable energy can reduce fossil energy use/ greenhouse emissions
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Environmental and Energy Study Institute 38

39. For More Information Contact
Carol Werner, Executive Director
(202)
Jesse Caputo, Policy Associate
(202)
EESI: Advancing Innovative Solutions!
5/10/2018
Environmental and Energy Study Institute