Pennsylvania issues funding, enacts carbon credit trading

By Bryan Sims | March 09, 2009
In January, Pennsylvania Gov. Edward Rendell announced the funding of 49 renewable energy and renewable fuel projects in the Keystone State. Of the 49 projects selected, 12 are biodiesel-related.

In Bedford County, the Community Foundation for the Alleghenies will receive $199,191 for the renovation of the Whispering Creek Renewable Energy Center. The environmental education facility will demonstrate the benefits of renewable energy generation and energy-efficient upgrades to an existing structure, and provide a location for the hands-on demonstrations of wind, solar, biodiesel and geothermal technologies.

Dauphin County biodiesel producer Middletown Biofuels LLC will receive $654,845 to demonstrate the pretreatment of alternative biodiesel feedstocks via controlled flow cavitation technology, which has the potential to cut production costs and make the company more competitive with its out-of-state rivals. The project's production capacity is expected to reach approximately 4.6 MMgy and reduce greenhouse gas emissions by as much as 9,950 tons annually.

Center County-based Matson and Associates Inc. will receive $120,000 to demonstrate the effectiveness of several catalysts in processing alternative, lower-cost biodiesel feedstocks. In addition, eight entities received funding to help buy down the incremental costs of biodiesel-blended fuel distribution.

Funding for the Dauphin and Center County projects came from two state grant programs: The Energy Harvest program contributed $7.2 million, and the Alternative Fuels Incentive Grant program provided $6.5 million.

The funding for these biodiesel projects will also help accelerate Pennsylvania's incremental biodiesel mandate. The total biodiesel production capacity of the state's seven operating biodiesel plants has reached 40 MMgy, the threshold necessary to trigger a statewide B2 requirement. During a visit to the 93rd Pennsylvania Farm Show in January,
Rendell said the state is on track to satisfy its B2 mandate in 2010 as a result of House Bill 1202, which he championed and signed in July. As in-state production rises, the biodiesel requirement will also rise, up to 20 percent once capacity reaches 400 MMgy.

Meanwhile, the Pennsylvania Farm Bureau and the Global Emissions Exchange have partnered to create a carbon credit trading regime for Pennsylvania farmers who use biodiesel on their farmland. According to farm bureau Media Relations Director Mark O'Neill, the bureau will first focus on enrolling farmers who can earn carbon credits by sequestering carbon dioxide from no-till farming practices. It will host informational meetings in eight counties during the year to educate interested farmers about how they can participate in the program. "At this point, we're focusing more on the education of carbon credits to the farmers than on the biodiesel aspect," O'Neill said, adding that the bureau expects to implement the biodiesel portion of the program by the fourth quarter of this year. "We're not anticipating problems, but we just want to do it well and not too soon."

According to Philip Gotthelf, managing director for the Global Emissions Exchange, once the biodiesel-focused portion of the program is implemented, farmers will be able to earn credits at a rate of 19.7 pounds of carbon dioxide reduction per gallon of B100 used. This protocol was based on studies jointly conducted by the Global Emissions Exchange and
Amerigreen BioFuels Inc., a biodiesel wholesaler in Lower Swatara Township, Pa. Gotthelf said the protocol was derived strictly from life-cycle analyses of soy-based biodiesel.

Protocols for the use of yellow grease as a biodiesel feedstock will later be added to the program. "Pennsylvania farmers can register on our Web site right now," he said, adding that the program is also available to Pennsylvania refiners, blenders and distributors interested participating in biodiesel-specific carbon credit trading programs. "It really represents a unique and powerful economic model moving forward."
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