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Members of the Massachusetts biofuels industry are up in arms over draft rules of a state law, warning that the narrow definition of what constitutes a low-carbon biodiesel could retard the growth of a burgeoning local industry.
The state Department of Energy Resources released its version of federal clean energy biofuel regulations last week, which would make biodiesel generated from waste oil the only compliant fuel — leaving out fuels derived from sources such as animal fat, algae or other biomass.
The state mandates are part of the federal Clean Energy Biofuels Act signed into law last year, requiring all road diesel and home-heating oil sold in the state to be blended with 2 percent low-carbon biodiesel by June 2010. The state version would also extend that compliance deadline by one year, to 2011.
Industry leaders say the regulations as written inject more uncertainty into an industry already struggling to convince investors and potential customers that the market is ripe for increased production infrastructure.
“To limit feedstock just to waste oils fails to recognize how investments are made. They’re really based on feedstock diversity, market penetration and infrastructure development,” said Andrew Schuyler, Northeast director of the New Fuels Alliance, an industry group. “The Legislature and the governor obviously agreed on setting a pretty high benchmark to reach. Now, during the rule-making, it seems they’re largely walking away from it.”
The New Fuels Alliance, in a joint statement with eight local biofuels companies, calls the regulations and the Patrick administration “out of touch with the biofuels industry’s needs to survive in Massachusetts.” The group, which includes Pittsfield-based Berkshire Biodiesel LLC, Boston biofuels distributor World Energy Associates and Guilford, Conn.-based biofuels developer Greenleaf Biofuels LLC, is asking the Energy Resources Department to consider allowing other biofuels as it finalizes regulations.
The law is proving to be one of the most difficult to implement of the five energy and environmental laws passed by the state Legislature and signed into law last year. Not only do the regulations require the time and attention of a DOER staff already busy with new laws and programs, but also scientific analysis of biofuels that is taking far longer than public officials had expected.
The method to determine whether biodiesel made from fuels other than waste oil has yet to be completed by the U.S. Environmental Protection Agency and the California Air Resources Board. State energy officials are not ruling out other types of biofuels permanently but wanted to release regulations in time for the industry to make preparations.
“We very much look forward to the day when we can approve other forms of biofuels and hope to do so in time for the mandate to go into effect in 2011,” said DOER spokesman Robert Keough.
Yet, by limiting eligibility for the Massachusetts biofuels to waste-based fuel, some biofuels executives claim it sets a precedent for other states to reject advanced biofuel technology.
“We do believe it would be an unfortunate and unwise precedent to not support the use of dedicated energy crops to produce biofuels,” said John Howe, vice president for public affairs at Cambridge cellulosic ethanol developer Verenium Corp. While Verenium does not produce biodiesel, Howe said the company is concerned about the regulations’ impact on the cellulosic ethanol industry, which relies on plant waste such as rice straw, sugar cane, switchgrass and wood chips.
For companies developing technology to turn algae into biodiesel, such as Wellfleet-based Plankton Power, the regulations close a potentially large and stable end market for their goods, at least in the short term.
“This throws a monkey wrench into what happens in Massachusetts, and any time there’s that type of uncertainty, that concerns investors,” said Curtis Felix, CEO of Plankton, which announced earlier this month a project with the Regional Technology Development Corp. of Cape Cod to build a pilot production facility in Falmouth.
The Cape Cod plant requires a $20 million grant from the U.S. Department of Energy and $3 million in private financing, investments that could be jeopardized by the uncertainty created by the regulations, Felix said.
Some projects, however, continue to move forward despite the industry’s displeasure with the regulations. Interstate Biofuels plans to go ahead with construction of its refinery in Berkshire County and expects to begin operation sometime next year, said Michelle Henderson, chief technology officer and director of planning for Interstate. She said the company’s technology works with all feedstocks and will be able to incorporate waste oils into its refining process.
What’s at stake:
The definition of what qualifies as a low-carbon biodiesel under the Massachusetts Clean Energy Biofuels Act
What it means:
If the regulations are made official, companies refining biodiesel from other feedstocks would not be able to sell that fuel in Massachusetts. Regulations could later be revised when federal guidelines on nonwaste-based biodiesel are made public.
Who’s involved:
New Fuels Alliance
Baystate Biofuels
Berkshire Biodiesel
Greenleaf Biofuels
Innovation Fuels
Interstate Biofuels
Plankton Power
Turning Mill Energy
World Energy
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