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U.S. biofuel makers want CO2 credits in climate bill
August 10, 2009 / 9:35 PM / 8 years ago

U.S. biofuel makers want CO2 credits in climate bill

NEW YORK (Reuters) - Makers of biofuels and plastics and chemicals made from crops want U.S. senators to change the climate bill to give them free pollution permits that would be needed to emit greenhouse gases under the legislation.

Companies that make the alternative motor fuel ethanol and plastics from renewable biomass, rather than fossil fuels, have visited Senate offices to urge that 1 percent to 5 percent of the emissions permits in a cap and trade program outlined in the bill be given to the businesses from 2012 to 2050.

Such credits were not included for those industries in the House of Representatives version of the bill passed in June. Democratic leaders hope the full Senate will vote on the legislation in October.

The biofuels industry, most of which has the capability to also make bio-plastics and chemicals similar to petroleum-based chemicals, is far smaller than the oil refining industry, which would get 2 percent of the permits to pollute under the bill.

But Brent Erickson, an executive vice president at the Biotechnology Industry Organization, said makers of biofuels and plastics made from plants should get a share of the permits because their products are renewable.

“No offense to refiners, but they’re taking carbon that’s been buried in the ground for millions of years and releasing it into the atmosphere,” he said. “And we’re taking carbon that’s in the atmosphere and recycling it through plants, and it ought to be treated differently.”

A study in Yale University’s Journal of Industrial Ecology published this year found that ethanol made from corn had lifecycle carbon dioxide emissions about 50 percent lower than gasoline. Ethanol producers say cellulosic ethanol, a second generation fuel made from non-food crops that’s not available yet in commercial amounts, is even cleaner.

Erickson said such incentives in the climate bill could benefit companies such as Archer Daniels Midland Co, DuPont Co, Dow Chemical Co and Metabolix Inc.

BIO also hopes companies that are looking to make fuels and products from algae will get incentives under the climate bill. No company makes commercial amounts of fuel from algae yet, but interest in the industry has grown over the last two or three years.

Exxon Mobil Corp, for instance, said last month it will invest $600 million over the next five to six years on trying to develop biofuel from algae.

The bill passed by the House would give about 85 percent of the credits away in the first years of a cap and trade program on greenhouse gas emissions and auction about 15 percent of them.

Reporting by Timothy Gardner; Editing by Christian Wiessner

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