Biofuels in Perspective

42 Biofuels
Table 3.1 Summary of bio-ethanol provisions in the Energy Policy Act of 2005
Bio-ethanol Provisions in the Energy Policy Act of 2005 (EPACT)
The Energy Policy Act of 2005 was signed into law by President George W. Bush on August 8, 2005.
The bill doubles the volume of renewable fuels in the nation’s fuel supply by 2012, provides tax
incentives for biofuels production and distribution, and establishes nearly $4 billion in research and
demonstration programs for the development of cellulosic ethanol.
Commercialization/government procurement
� Creates a Renewable Fuels Standard (RFS) requiring fuel refiners to double the volume of biofuels
in the nation’s fuel supply to 7.5 billion gallons annually by 2012. Starting in 2013, a minimum of
250 million gallons a year must be cellulosic ethanol.
� Sets up a program of loan guarantees to reduce investment risk to private lenders for construction
of cellulosic ethanol biorefineries. [First loan guarantees expected to be issued in 2007.]
� Authorizes $250 million in production incentives for first 1 billion gallons of cellulosic biofuels
production through a ‘reverse auction’ process. [Yet to be funded.]
� Requires the use of renewable fuels in all government vehicles capable of their use.
Tax incentives
� Tax credit to fueling stations for 30 percent of the cost of installing alternative fuel pumps.
� 10 cent per gallon small ethanol producer credit to plants with capacity under 60 million gallons.
R&D
� Funds bioenergy/biorefinery research, development and demonstration up to $2.9 billion over
10 years through three separate programs:
� DOE Bioenergy Program – $738 million authorized over 3 years. Includes $375 million for
Integrated Biorefinery Demonstration. [Six biorefinery demonstration grants issued in early 2007.]
� USDA Biomass R&D Program – $2 Billion for production, collection, transport and
pre-processing of cellulosic crops. [Yet to be funded.]
� DOE Office of Science – $196 million for development of cellulase enzyme cocktails and
advanced fermentation organisms for cellulosic feedstocks. [DOE currently reviewing bids to
establish two National Bioenergy Research Centers.]
Ethanol Production
[billions of gallons per year]
12.0
10.0
8.0
6.0
4.0
2.0
0.0
1980
1982
1984
1986
1988
Figure 3.1 Historical US ethanol production.
Source: Ref. 5 .
1990
1992
1994
1996
1998
2000
2002
Year [Values for 2007-2008 are projected]
2004
2006
2008