BIO issues letters on advanced biofuel development to lawmakers

By Erin Voegele | July 19, 2011

The Biotechnology Industry Organization has sent a letter to Sens. Dianne Feinstein, D-Calif.; Amy Klobuchar, D-Minn.; and John Thune, R-S.D. thanking them for supportive, stable policies for advanced biofuels that were included in the announced deal on the immediate repeal of the Volumetric Ethanol Excise Tax Credit. The letter also noted, however, that small changes to the agreement would better ensure a more stable investment climate for advanced biofuels.

While Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, said that his organization shares the senators’ view that stable federal policy is essential to ensuring advanced biofuel developers can move forward with first-of-kind projects, he noted a few areas of concern. “We are concerned that the inclusion of annual caps on the cellulosic production tax credit will result in additional investor uncertainty that could significantly limit the effectiveness of the program in attracting project financing,” Erickson said. “We also note that the agreement does not include any provisions targeted specifically at accelerating commercialization of new drop-in fuel molecules, which are a critical component to addressing many transportation fuel challenges.”

According to Erickson, BIO and other organizations have long advocated for an investment tax credit (ITC) option for noncommercial advanced biofuels technologies. “We urge the senate to consider inclusion of this proposal,” he said. “We also urge inclusion of an extension of the alternative alcohols tax credit, which would ensure that termination of VEETC not inadvertently disrupt commercialization efforts for butanol and other alternative alcohols. The relatively small amount of funds necessary for these inclusions would be balanced by significant job creation and revenue generation throughout the country.”

BIO also recently issued a letter to Reps. John Boehner, R-Ohio; Nancy Pelosi, D-Calif.; Harry Reid, D-Nev.; and Mitch McConnell, R-Ky., commending Congress for its bipartisan support of advanced biofuels and noting the role military demand can play in developing new biofuel technologies.

“Biotechnology companies researching and developing new technologies for advanced biofuel can help diversify the military’s energy supply and advance U.S. national and energy security objectives,” the letter stated. “Diversification of the Department of Defense’s fuel supplies is valuable given the long-term unpredictability of the oil market. The use of more domestically produced renewable energy also serves as a ‘force multiplier,’ both at home and overseas, by increasing the military’s ability to operate freely while limiting the number of combat forces needed to product oil supply lines.”

In the letter, BIO noted that the advanced biofuels industry is rapidly maturing, in part, because private companies have made significant investments to commercialize technology. “However, the Department of Defense is also playing a role in its commercial development and growth,” the letter said. “BIO member companies, such as Solazyme, Amyris, Sapphire Energy, and Sustainable Oils are currently working with the Department of Defense at their facilities in California, Montana, New Mexico, Pennsylvania, Texas, Hawaii, and Washington to supply drop-in biofuels for use in military jets, ships, and vehicles.”