December 4, 2015
BY Anna Simet
It has been quite the week for the biofuel industry.
Monday, the U.S. EPA released the highly anticipated renewable fuel standard (RFS) renewable volume obligation numbers for 2015, 2016 and 2017.
Our editorial staff at BBI International—the parent company of Biomass Magazine, Ethanol Producer Magazine and Biodiesel Magazine—was ready for the announcement, and produced a nice roundup of stories related to it.
Here’s on one the announcement itself.
Here’s one on the reaction from the first- and second-generation ethanol industry.
Here’s reaction from the biodiesel sector.
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Overall, it wasn’t bad news. I think for the most part, what was expected was what was dished out. Far from perfect, but not terrible by any means.
Meanwhile…
The advanced biofuel industry took a hit. We heard a rumor a little while back that Abengoa’s Hugoton, Kansas, cellulosic ethanol plant was idled, and this week, that was proven to be true.
And worse.
News Editor Erin Voegele got the scoop on the story when, a day after reporting on Abengoa’s earnings call (during which it was announced that it is filing for preliminary creditor protection but intended to continue to operate its ethanol plants in a normal course of business, including Hugoton), a Hugoton employee reached out to her and told her the latest developments, which included laying off the Hugoton staff and shuttering of the plant. Read all about it here.
As a trade journal, we don’t like to hear about or report on stories like this, but it’s an important development, and it’s our duty to share it with you. Abengoa was the second of “The Big Three” cellulosic ethanol plants to come online over the past year or so. I can recall when plans for this facility really started taking shape in 2008, so after all of this time and effort, I have no doubt it’s a disheartening turn of events for many, not just for Abengoa, the Hugoton community and facility vendors, but also Poet-DSM and DuPont. While competitors, they also support each other, and a man down isn’t good for anyone.
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A big part of it, unfortunately, is public perception. People have a problem when government money is given to projects like these, and they experience failure. We all know that. The renewables industry will never hear the end of the Solyndra debacle, no matter how much progress is made. Though Abengoa reportedly fully paid back a $132 million U.S. DOE loan guarantee it received for the project, it also scored a $97 million grant from DOE in 2007 to build the plant. It’s just a matter of time before that’s thrown in the face of the industry.
It takes failure to achieve success when bringing new technologies to the market, but some just don’t want to hear that.
However, right now, Hugoton hasn’t failed—Abengoa is in some pretty dire financial turmoil, but we were told the closing is not technology related. The employee who Voegele spoke with said the facility may be reopened in the spring, and I really hope to see that happen.
We’ll keep you in the loop as this situation unfolds.
As for the RFS and the RVO numbers, as you likely gathered from our coverage, there is disagreement amongst a few different sectors—as well as the obvious Big Oil—as to what should happen with the RFS. While the release of the RVOs was a small victory, the battle continues.