The federal Renewable Fuel Standard provides the stable market support and pricing system necessary to attract private investment to the development of advanced biofuels, according to a new policy white paper published by the Biotechnology Industry Organization (BIO). BIO presented the paper, which is forthcoming this month in the journal Industrial Biotechnology, at the Advanced Biofuels Leadership Conference in Washington, D.C. Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, who spoke at the conference released the following statement.
“The Renewable Fuel Standard, as it has been implemented by the Environmental Protection Agency, can provide the long-term, stable, market-based government policy mechanism that advanced biofuel producers and investors have been looking for. It provides both and assured market and a significant degree of price certainty for cellulosic and advanced biofuels, which can significantly mitigate the capital risk associated with commercialization of new technologies.
“The RFS is an effective mechanism for incentivizing innovation within the biofuels industry. With this policy in place, companies already have made significant investments in research and development, producing successes at each stage. The technology is ready for commercial deployment and it can provide good jobs and new economic opportunities. Federal support must continue so that the advanced biofuels industry can build on the foundation created by the RFS and reach its potential commercial production levels.
“Access to capital remains the biggest challenge for the industry, especially as high oil prices threaten to plunge the country into another recession. The RFS must work in coordination with other federal programs administered by the USDA and DOE to provide the industry, its investors and obligated parties needed stability and forward-looking guidance. This paper should reassure capital markets that advanced biofuels represent a sound opportunity. And coupled with the recent USDA loan guarantees and DOE grants the advanced biofuels sector should experience a surge in 2011 and beyond.”