[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]



 
            A LOOK AT THE RENEWABLE ECONOMY IN RURAL AMERICA

=======================================================================

                                HEARING

                               BEFORE THE

        SUBCOMMITTEE ON COMMODITY EXCHANGES, ENERGY, AND CREDIT

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 16, 2021

                               __________

                           Serial No. 117-22
                           
                           
                           
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                          
                           


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov
                         
                         
                         
                         
                              ______
 
              U.S. GOVERNMENT PUBLISHING OFFICE 
 49-362 PDF          WASHINGTON : 2022 
                         
                         
                         


                        COMMITTEE ON AGRICULTURE

                     DAVID SCOTT, Georgia, Chairman

JIM COSTA, California                GLENN THOMPSON, Pennsylvania, 
JAMES P. McGOVERN, Massachusetts     Ranking Minority Member
FILEMON VELA, Texas                  AUSTIN SCOTT, Georgia
ALMA S. ADAMS, North Carolina, Vice  ERIC A. ``RICK'' CRAWFORD, 
Chair                                Arkansas
ABIGAIL DAVIS SPANBERGER, Virginia   SCOTT DesJARLAIS, Tennessee
JAHANA HAYES, Connecticut            VICKY HARTZLER, Missouri
ANTONIO DELGADO, New York            DOUG LaMALFA, California
BOBBY L. RUSH, Illinois              RODNEY DAVIS, Illinois
CHELLIE PINGREE, Maine               RICK W. ALLEN, Georgia
GREGORIO KILILI CAMACHO SABLAN,      DAVID ROUZER, North Carolina
Northern Mariana Islands             TRENT KELLY, Mississippi
ANN M. KUSTER, New Hampshire         DON BACON, Nebraska
CHERI BUSTOS, Illinois               DUSTY JOHNSON, South Dakota
SEAN PATRICK MALONEY, New York       JAMES R. BAIRD, Indiana
STACEY E. PLASKETT, Virgin Islands   JIM HAGEDORN, Minnesota
TOM O'HALLERAN, Arizona              CHRIS JACOBS, New York
SALUD O. CARBAJAL, California        TROY BALDERSON, Ohio
RO KHANNA, California                MICHAEL CLOUD, Texas
AL LAWSON, Jr., Florida              TRACEY MANN, Kansas
J. LUIS CORREA, California           RANDY FEENSTRA, Iowa
ANGIE CRAIG, Minnesota               MARY E. MILLER, Illinois
JOSH HARDER, California              BARRY MOORE, Alabama
CYNTHIA AXNE, Iowa                   KAT CAMMACK, Florida
KIM SCHRIER, Washington              MICHELLE FISCHBACH, Minnesota
JIMMY PANETTA, California            JULIA LETLOW, Louisiana
ANN KIRKPATRICK, Arizona
SANFORD D. BISHOP, Jr., Georgia

                                 ______

                      Anne Simmons, Staff Director

                 Parish Braden, Minority Staff Director

                                 ______

        Subcommittee on Commodity Exchanges, Energy, and Credit

                  ANTONIO DELGADO, New York, Chairman

SEAN PATRICK MALONEY, New York       MICHELLE FISCHBACH, Minnesota, 
STACEY E. PLASKETT, Virgin Islands   Ranking Minority Member
RO KHANNA, California                AUSTIN SCOTT, Georgia
CYNTHIA AXNE, Iowa                   DOUG LaMALFA, California
BOBBY L. RUSH, Illinois              RODNEY DAVIS, Illinois
ANGIE CRAIG, Minnesota               CHRIS JACOBS, New York
ANN M. KUSTER, New Hampshire         TROY BALDERSON, Ohio
CHERI BUSTOS, Illinois               MICHAEL CLOUD, Texas
------                               RANDY FEENSTRA, Iowa
                                     KAT CAMMACK, Florida

               Emily German, Subcommittee Staff Director

                                  (ii)
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Davis, Hon. Rodney, a Representative in Congress from Illinois, 
  submitted letters..............................................    95
Delgado, Hon. Antonio, a Representative in Congress from New 
  York, opening statement........................................     1
    Prepared statement...........................................     2
Feenstra, Hon. Randy, a Representative in Congress from Iowa, 
  submitted report...............................................    53
Fischbach, Hon. Michelle, a Representative in Congress from 
  Minnesota, opening statement...................................     3
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................     4

                               Witnesses

Skor, Emily, Chief Executive Officer, Growth Energy, Washington, 
  D.C............................................................     6
    Prepared statement...........................................     8
    Submitted information........................................    98
Pratt, Jeff, President, Green Power EMC, Tucker, GA; on behalf of 
  National Rural Electric Cooperative Association................    24
    Prepared statement...........................................    25
Wheeler, Gary, Executive Director and Chief Executive Officer, 
  Missouri Soybean Association, Missouri Soybean Merchandising 
  Council, and Foundation for Soy Innovation, Jefferson City, MO; 
  on behalf of American Soybean Association......................    27
    Prepared statement...........................................    29
Bowman, Jessica, Executive Director, Plant Based Products 
  Council, Washington, D.C.......................................    34
    Prepared statement...........................................    36
Stolzenburg, Nan C., Principal Planner and Founder, Community 
  Planning & Environmental Associates, Berne, NY.................    61
    Prepared statement...........................................    63
    Submitted question...........................................   153
Aberle, Randy, Executive Vice President of Agribusiness and 
  Capital Markets, AgCountry Farm Credit Services, Fargo, ND.....    69
    Prepared statement...........................................    71
    Submitted question...........................................   156

                           Submitted Material

Gallo, Sarah Vice President, Agriculture and Environment, 
  Biotechnology Innovation Organization, submitted letter........    99
Rehagen, Donnell, Chief Executive Officer, National Biodiesel 
  Board, submitted letter........................................   148
Singh, Ph.D., Rina, Executive Vice President, Policy, Alternative 
  Fuels & Chemicals Coalition, submitted letter..................   151


            A LOOK AT THE RENEWABLE ECONOMY IN RURAL AMERICA

                              ----------                              


                       TUESDAY, NOVEMBER 16, 2021

                  House of Representatives,
   Subcommittee on Commodity Exchanges, Energy, and Credit,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:01 a.m., in 
Room 1300 of the Longworth House Office Building and via Zoom, 
Hon. Antonio Delgado [Chairman of the Subcommittee] presiding.
    Members present: Representatives Delgado, Plaskett, Khanna, 
Axne, Rush, Craig, Kuster, Bustos, Fischbach, Austin Scott of 
Georgia, LaMalfa, Davis, Jacobs, Balderson, Cloud, Feenstra, 
Cammack, Thompson (ex officio), Hartzler, and Baird.
    Staff present: Emily German, Chu-Yuan Hwang, Luke Theriot, 
Paul Balzano, Josh Maxwell, Erin Wilson, and Dana Sandman.

OPENING STATEMENT OF HON. ANTONIO DELGADO, A REPRESENTATIVE IN 
                     CONGRESS FROM NEW YORK

    The Chairman. This hearing of the Subcommittee on Commodity 
Exchanges, Energy, and Credit entitled, A Look at the Renewable 
Economy in Rural America, will come to order. Welcome, and 
thank you all for joining today's hearing. After brief opening 
remarks, Members will receive testimony from our witnesses 
today, and then the hearing will open to questions. Members 
will be recognized in order of seniority, alternating between 
Majority and Minority Members, and in order of arrival for 
those Members who have joined us after the hearing was called 
to order. When you are recognized, you will be asked to unmute 
your microphone, and will have 5 minutes to ask your questions 
or make a comment. If you are not speaking, I ask that you 
remain muted in order to minimize background noise. In order to 
get as many questions as possible, the timer will stay 
consistently visible on your screen.
    In consultation with the Ranking Member and pursuant to 
Rule XI(e), I want to make Members of the Subcommittee aware 
that other Members of the full Committee may join us today.
    Good morning, and thank you all for joining us today. We 
are here to talk about the renewable economy in rural America. 
From the agricultural commodities used to produce biofuels or 
biobased products to the land used for wind and solar projects 
and efficiency, increasing technologies like anaerobic 
digesters, rural communities are integral to the future of 
renewable energy. And as long as we have the right policies and 
supports in place, these communities stand to benefit greatly.
    Renewable technologies and processes continue to develop 
and improve. As they do, it is important that Congress ensure 
Federal programs and incentives are effective and impactful for 
rural communities transitioning to renewable energy. In today's 
hearing, we will hear about the latest developments in the 
renewable economy, challenges that need to be addressed, and 
how rural America can continue to benefit from its growth.
    While creating more business and economic opportunities for 
rural areas, it is an important focus of today's hearing, we 
cannot forget that residential energy affordability is still a 
real problem in rural America. Inefficient and outdated energy 
infrastructure means more costly energy bills for rural 
residents. We have seen a slower transition to renewable 
energy, as it often proves too costly without outside support 
or incentives.
    Our panel of witnesses will touch on all of these issues, 
the status of the biofuels and biobased product industry, and 
the financing, construction, and crafting of renewable energy 
projects that benefit rural communities.
    While the focus of our hearing is on the benefits strategic 
investments in the renewable economy provide rural America, the 
growth of this industry stands to have a substantial impact on 
the national and global economy, with some experts estimating 
the direct economic impact of biobased products, services, and 
processes at up to $4 trillion per year globally over the next 
10 years. Furthermore, the growth of the domestic renewable 
economy helps secure America's energy future, reducing our 
reliance on petroleum imports and making the best use of our 
domestic resources.
    The topic of today's hearing is dynamic, multi-faceted, and 
timely, and as the House Agriculture Committee begins work on 
the next farm bill, the discussion we have here today will be 
informative to that process.
    [The prepared statement of Mr. Delgado follows:]

    Prepared Statement of Hon. Antonio Delgado, a Representative in 
                         Congress from New York
    Good morning and thank you for joining us. Today we are here to 
talk about the renewable economy in rural America. From agricultural 
commodities used to produce biofuels or biobased products, to land used 
for wind and solar projects and efficiency increasing technologies like 
anaerobic digesters, rural communities are integral to the future of 
renewable energy. And as long as we have the right policies and 
supports in place, these communities stand to benefit greatly.
    Renewable technologies and processes continue to develop and 
improve. As they do, it's important that Congress ensure Federal 
programs and incentives are effective and impactful for rural 
communities transitioning to renewable energy.
    In today's hearing, we will hear about the latest developments in 
the renewable economy, challenges that need to be addressed, and how 
rural America can continue to benefit from its growth. While creating 
more business and economic opportunities for rural areas is an 
important focus of today's hearing, we cannot forget that residential 
energy affordability is still a real problem in rural America. 
Inefficient and outdated energy infrastructure means more costly energy 
bills for rural residents. We've seen a slower transition to renewable 
energy as it often proves too costly without outside support or 
incentives.
    Our panel of witnesses will touch on all of these issues--the 
status of the biofuels and biobased product industry and the financing, 
construction, and crafting of renewable energy projects that benefit 
rural communities. While the focus of our hearing is on the benefits 
strategic investments in the renewable economy provide rural America, 
the growth of this industry stands to have a substantial impact on the 
national and global economy, with some experts estimating the direct 
economic impact of biobased products, services, and processes at up to 
$4 trillion per year, globally, over the next 10 years. Furthermore, 
the growth of the domestic renewable economy helps secure America's 
energy future, reducing our reliance on petroleum imports and making 
the best use of our domestic resources.
    The topic of today's hearing is dynamic, multi-faceted, and timely. 
And, as the House Agriculture Committee begins work on the next farm 
bill, the discussion we have here today will be informative to that 
process.

    The Chairman. With that, I would now like to welcome the 
distinguished Ranking Member, the gentlewoman from Minnesota, 
Mrs. Fischbach, for any opening remarks she would like to give.

OPENING STATEMENT OF HON. MICHELLE FISCHBACH, A REPRESENTATIVE 
                   IN CONGRESS FROM MINNESOTA

    Mrs. Fischbach. Thank you, Mr. Chairman, and thank you for 
the opportunity, and good morning to everyone. I want to thank 
you all for taking the time to be here today.
    Like many of my colleagues, I represent a rural ag-based 
district. We are among the top ag-producing districts in the 
nation, and we are responsible for nearly half of Minnesota's 
agricultural sales.
    Minnesota and my district also play a key role in renewable 
energy. Minnesota farmers care deeply about the conversation 
and the environment, and are innovators in that area. Being the 
first state to implement E10 and the B20 mandates, my district 
is home to eight biofuel plants and we are the top producer in 
corn and soybeans that provide feedstocks for these plants.
    Discussions of lower carbon emissions must include, and 
enhance, the use of biofuels. It is an existing proven fuel 
source, and must be part of that conversation.
    Since taking office, I have spent a lot of time traveling 
across my district. I have met with local officials, business 
owners, farmers, families, and many others. One thing I can 
tell you is that rural America is facing many challenges right 
now--made all the more evident by COVID-19--challenges like 
limited access to capital, worker and skill shortages, aging 
infrastructure, limited access to broadband, and diminished 
access to healthcare services. We should be doing everything we 
can to help these ag economies thrive, and should be wary of 
taking actions that will create more challenges than 
opportunities.
    I am a little concerned about some of the efforts the 
Majority has that don't recognize that biofuels have been an 
important part of the role in reducing our greenhouse 
emissions. Combines cannot run on electricity or wind or solar. 
There remains an important role for liquid fuels to play in our 
communities.
    I would also like to have the conversation about 
bioproducts of agriculture commodities. I am glad to see 
panelists that can speak to the work they are doing to 
diversify the value-add of products coming from the farm as a 
vehicle for rural development. I am interested in learning more 
in that regard.
    Taking care of our rural communities and ensuring that they 
have what they need to thrive benefits the ag economy, but it 
also benefits the rest of the country. If we can help meet 
those needs together, it is all of our constituents who will 
reap those benefits.
    I join the Chairman in welcoming all of our witnesses, and 
we appreciate your time and I am looking forward to today's 
discussion.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you, Ranking Member. I also would like 
to recognize Ranking Member Thompson for any opening comments 
he would like to make.

 OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    Mr. Thompson. Thank you, Mr. Chairman and Ranking Member. I 
really appreciate you both, and thank you for convening today's 
hearing on rural America's renewable economy.
    As you have heard me say before, without the producers in 
rural America, our cities would wake up in the cold, dark, and 
hungry.
    With that being said, I would like to thank all of you here 
today for your role in powering rural America, and for sharing 
your perspective and testimony with us.
    In Pennsylvania's 15th Congressional district, which I am 
proud and honored to represent, there is innovation at every 
turn. Whether that be biomass, renewable power sources, or 
critical mineral research, our universities and private 
institutions are contributing to significant progress within 
the renewable energy economy.
    And, research is just as critical to help grow our new 
markets for biobased products of all kinds, including both 
energy and advanced materials. For example, the 2018 Farm Bill 
contains provisions that support research and development for 
cross-laminated timber and tall wood buildings. Developing 
materials like CLT provide forest owners new opportunities for 
renewable wood products and support rural communities, while 
generating forest health benefits in the process.
    While I proudly support research and innovation, deployment 
of renewables, I must stress that the farmers, ranchers, and 
landowners in my district cannot supply the world's food and 
fiber without 24/7 access to reliable and affordable energy.
    I must also address the current makeup of my state's 
renewable energy economy. The Energy Information Administration 
found that in 2020, renewable energy resources generated about 
four percent of Pennsylvania's electricity. As this number 
grows, I am committed to balancing the needs of the 
Commonwealth's families, communities, and producers who rely on 
natural gas-fired, coal-fired, and nuclear power generation 
with the needs of the innovators in the renewable economy that 
we are hearing from today.
    With that, thank you, Mr. Chairman, and I look forward to 
today's discussion and yield back.
    The Chairman. Thank you, Ranking Member Thompson.
    The chair would request that other Members submit their 
opening statements for the record so witnesses may begin their 
testimony, and to ensure that there is ample time for 
questions.
    To our witnesses, I am pleased to welcome such a 
distinguished panel of witnesses to our hearing today. Our 
witnesses bring to our hearing a wide range of experience and 
expertise, and I thank you all for joining us.
    Our first witness today is Emily Skor, the Chief Executive 
Officer of Growth Energy, which represents over \1/2\ of all 
U.S. ethanol production. Since joining Growth Energy, Ms. Skor 
has led initiatives to grow the retail presence of higher 
biofuel blends across the U.S. and launched Growth Energy's 
first consumer education initiative to redefine ethanol as a 
cleaner and more affordable fuel choice. Under her leadership, 
Growth Energy membership has grown to include 92 plant 
producers and 91 innovative businesses that support biofuel 
production. Welcome, Ms. Skor.
    Our next witness today is Mr. Jeff Pratt, the President of 
Green Power EMC. Green Power EMC secures renewable energy 
resources for the broader family of 38 electric cooperatives in 
Georgia, which delivers power to approximately 4.3 million 
Georgians. In his role, Mr. Pratt leads efforts to source, 
evaluate, and contract for renewable energy projects. Today, 
Georgia's electric cooperatives have approximately 1,600 
megawatts of renewable energy in operation or under 
construction. Mr. Pratt also serves as the Vice President of 
Emerging Technologies for Oglethorpe Power Corporation, where 
he leads collaborative efforts to explore, engage, and 
implement emerging technologies such as electric vehicles and 
other new technologies changing the energy landscape. Welcome, 
Mr. Pratt.
    To introduce our third witness today, I am pleased to yield 
to our colleague on the Committee, the distinguished 
gentlewoman from Missouri, Mrs. Hartzler.
    Mrs. Hartzler. Oh, thank you, Mr. Chairman, and it is an 
honor to introduce Gary Wheeler. He is the Executive Director 
and CEO of the Missouri Soybean Association, the Missouri 
Soybean Merchandising Council, and the Foundation for Soy 
Innovation. Gary and I have worked together for years. He is a 
very respected leader in agriculture in our state, and I feel 
confident that he is going to bring us many very helpful 
insights as we look at renewables and the role that agriculture 
can play in it. So, I am proud to welcome Gary, and thank you 
for being here.
    I yield back.
    The Chairman. I thank the gentlewoman.
    Our fourth witness is Ms. Jessica Bowman, who is the 
Executive Director of the Plant Based Products Council. The 
Plant Based Products Council represents a broad range of 
companies who support greater adoption of products and 
materials made from renewable plant-based inputs. Ms. Bowman 
leads the organizations efforts to advocate for the expanded 
use of renewable plant-based materials, including through 
collaboration with early-phase start-ups and Fortune 500 
companies on their sustainability efforts and awareness 
initiatives. As an engineer and lawyer, Ms. Bowman plays a 
unique role in bridging the gap between today's biobased 
innovations and policies that encourage their broader adoption. 
Welcome, Ms. Bowman.
    Now, I am incredibly pleased to introduce our next witness 
from my own district, Ms. Nan Stolzenburg, the Principal 
Consulting Planner of Community Planning & Environmental 
Associates, and a friend. Ms. Stolzenburg plays an important 
role in assisting small and rural communities in development of 
land use and environmental planning. Ms. Stolzenburg has a 
special interest in small town and rural planning, community 
revitalization, comprehensive planning, land use regulations, 
and public participation. In her role, she has been the 
principal consultant in over 70 communities, and is 1 of 33 
people nationwide to have received the Certified Environmental 
Planner advanced certification. Ms. Stolzenburg is also a 
member of my locally-based agriculture advisory committee. 
Welcome, Ms. Stolzenburg.
    To introduce our sixth and final witness today, I am 
pleased to yield to the Ranking Member, the gentlewoman from 
Minnesota, Mrs. Fischbach.
    Mrs. Fischbach. Thank you, Mr. Chairman.
    It is my pleasure to introduce Randy Aberle, Executive Vice 
President of Agribusiness and Capital Markets for AgCountry 
Farm Credit Services, a financial cooperative that helps more 
than 200,000 business in North Dakota, Minnesota, and 
Wisconsin. Mr. Aberle is certainly an expert in the field. He 
received a Bachelor of Science degree in agricultural 
economics, and has worked with AgCountry for over a decade. I 
am so excited for everyone here to benefit from his experience 
and to hear more about how AgCountry has been involved in the 
renewable economy. Farm Credit is so important in rural America 
as an outlet for financing that might not otherwise be 
available, compared with cities where big banks are plentiful. 
I know that they have helped a lot of family farms and 
businesses in my district, like Kohls Land and Cattle in 
Hutchinson, and Matt and Erica Jensen's farm in Fergus Falls. 
It is important that we remember the real farmers and ag 
producers like them need to have a seat at the table in all 
proposed legislation and discussions, particularly as we begin 
work on the next farm bill. Welcome to the Committee.
    Thank you. I yield back.
    The Chairman. I thank the gentlewoman.
    Welcome to all of our witnesses today. We will now proceed 
to hearing your testimony. You will each have 5 minutes. The 
timer should be visible to on your screen and will count down 
to 0, at which point your time has expired.
    Ms. Skor, please begin when you are ready.

   STATEMENT OF EMILY SKOR, CHIEF EXECUTIVE OFFICER, GROWTH 
                    ENERGY, WASHINGTON, D.C.

    Ms. Skor. Chairman Delgado, Ranking Member Fischbach, and 
Members of the Subcommittee, thank you for the opportunity to 
testify today on the role of renewable energy in the rural 
economy. I am Emily Skor, CEO of Growth Energy, the nation's 
largest ethanol trade association, representing plant producers 
and their innovative business partners.
    Ethanol production has long been an economic driver for our 
rural economies. The United States is home to 210 biorefineries 
across 27 states that have the capacity to produce more than 17 
billion gallons of low-carbon renewable fuel. Our industry is 
the second largest customer for U.S. corn growers, and will 
purchase nearly $30 billion worth of corn this year to produce 
ethanol and an expanding array of biobased products, such as 
high protein animal feed, renewable chemicals, and corn oil.
    Renewable fuels like ethanol remain the single-most 
affordable and abundant source of low-carbon motor fuel on the 
planet, and are critical to meeting carbon reduction goals 
today. Recent research shows there is no path to net-zero 
emissions without biofuels. Even accounting for the projected 
growth of electric vehicles, the Energy Information 
Administration indicates that the vast majority of cars on the 
road through 2050 will run on liquid fuels. Higher blends of 
ethanol can be used in our current auto fleet to accelerate our 
transition to a 100 percent renewable energy future. Put 
simply, America cannot de-carbonize the transportation sector 
without homegrown biofuels.
    To meet the rising demands for renewable energy, we must 
first have a strong and thriving rural economy and biofuel 
industry. At a minimum, that means the Biden Administration and 
Congress must ensure that biofuels are part of our 
transportation mix now and into the future. This can be 
achieved through a strong Renewable Fuel Standard, accelerated 
nationwide use of higher blends like E15, accurate carbon 
modeling of ethanol to better reflect the most current data, 
sustainable farming innovations, and carbon intensity 
reductions at our biorefineries, and incentives that provide 
producers with strong policy signals to further reduce our 
carbon intensity, and expand to new transportation markets.
    A strong RFS will reduce carbon emissions and provide a 
steady market for U.S. grain. The annual blending requirements 
are woefully delayed, and in recent weeks, unsettling media 
reports indicate the EPA may turn its back on greater biofuel 
blending. It is critical for ethanol producers and suppliers 
that EPA immediately propose 15 billion gallons of conventional 
biofuels for 2021 and 2022. The Biden Administration simply 
cannot meet its climate goals while rolling back low-carbon 
biofuel blending requirements. We ask that the Subcommittee 
help deliver this message to the Administration.
    We appreciate the Committee including nearly $1 billion in 
the Build Back Better Act (Pub. L. 117-169) to provide drivers 
access to more low-carbon, higher ethanol blends. This 
provision builds upon USDA's successful biofuel infrastructure 
programs under the last two Administrations. This investment 
complements a nationwide move to a 15 percent ethanol blend, 
which would meaningfully reduce greenhouse gas emissions, the 
equivalent of removing nearly four million vehicles from the 
road each year. It would also create more than 182,000 
additional jobs, and save consumers $12.2 billion in fuel costs 
annually. To help realize these benefits, Congress must pass 
the Year-Round Fuel Choice Act of 2021 (H.R. 4410) from 
Representative Angie Craig to restore E15 summer sales.
    Through continued innovation, America's ethanol producers 
and farmers are using fewer inputs and improving efficiencies 
at the plant and on the farm. We are pleased to see voluntary 
initiatives in the Build Back Better Act that would help 
further reduce the carbon intensity of agriculture, which 
accounts for 50 to 65 percent of our lifecycle emissions. As 
biofuel producers capture the value of low-carbon farming 
practices, farmers would also have the opportunity to benefit 
in the form of premium prices for their commodities. The 
legislation also contains several important incentives to help 
ethanol producers further reduce the carbon intensity of their 
fuel, and explore new markets. These provisions, along with 
some recommended changes, are detailed in my written testimony.
    To close, with the right policy environment, our industry 
can continue to de-carbonize our transportation sector from 
passenger vehicles to our aviation fleet. We stand with rural 
America, ready to assist Congress and the Administration to 
achieve our nation's climate goals.
    Thank you for the opportunity to testify. I look forward to 
your questions.
    [The prepared statement of Ms. Skor follows:]

   Prepared Statement of Emily Skor, Chief Executive Officer, Growth 
                        Energy, Washington, D.C.
    Chairman Delgado, Ranking Member Fischbach, and Members of the 
Subcommittee:

    Thank you for the opportunity to testify today on the role biofuels 
like ethanol play in the renewable economy in rural America. My name is 
Emily Skor, and I am the CEO of Growth Energy, the world's largest 
ethanol trade association.
    Growth Energy represents over \1/2\ of all U.S. ethanol production, 
including 92 producer plants, 91 innovative businesses that support 
biofuels production, and tens of thousands of ethanol supporters around 
the country.
    Ethanol production has long been an economic driver for our rural 
economies. The United States is home to 210 biorefineries across 27 
states that have the capacity to produce more than 17 billion gallons 
of low-carbon, renewable fuel.
    Ethanol is also the second-largest customer to 300,000 U.S. corn 
growers with roughly \1/3\ of the field corn crop used to produce fuel 
ethanol each year.\1\ In a particularly unusual year of depressed 
demand in 2020, the ethanol industry purchased 4.78 billion bushels of 
corn to produce nearly 14 billion gallons of biofuels and more than 
36.4 million tons of dried distillers grains.\2\ Also in 2020, 26.6% of 
field corn went into fuel ethanol.\3\ This year, our industry will 
purchase nearly $30 billion of corn to produce ethanol and co-products 
such as high-protein animal feed and corn oil.
---------------------------------------------------------------------------
    \1\ National Corn Growers Association. https://www.ncga.com/key-
issues/current-priorities/ethanol.
    \2\ ``Grain Crushings and Co-Products Production--2020 Summary,'' 
U.S. Department of Agriculture. March 2021. https://
downloads.usda.library.cornell.edu/usda-esmis/files/v979v304g/
jh344m06h/1j92h279h/cagcan21.pdf.
    \3\ ``Corn Usage by Segment 2020,'' National Corn Growers 
Association. April 2021. https://www.worldofcorn.com/#corn-usage-by-
segment.
---------------------------------------------------------------------------
    Renewable fuels like ethanol remain the single most affordable and 
abundant source of low-carbon motor fuel on the planet--and are 
critical to meeting carbon reduction goals today.
    Recent research shows there is no path to net-zero emissions by 
2050 without biofuels. Even accounting for the projected growth of 
electric vehicles, the Energy Information Administration indicates that 
the vast majority of cars on the road through 2050 will run on liquid 
fuels. Biofuels like ethanol are affordable, available, and can be used 
in our current auto fleet. Put simply, America cannot de-carbonize the 
transportation sector without homegrown biofuels.
    My comments today will focus on how America's ethanol industry is 
leading the way in producing renewable energy in our rural areas, 
driving new economic activity and environmental benefits. Specifically, 
I will explore the following areas:

   Why low-carbon liquid biofuels like ethanol are essential to 
        meet our climate goals;

   How programs at the U.S. Department of Agriculture and 
        provisions in the Build Back Better Act can help us further de-
        carbonize transportation;

   How a strong and growing RFS will continue to cut carbon 
        emissions from transportation; and

   How higher-level ethanol blends like E15 can drive down 
        emissions and lower consumer fuel costs.
Biofuels: An Essential Solution to Meet Climate Goals
Figure 1: U.S. GHG Emissions by Sector
Total U.S. Greenhouse Gas Emissions by Economic Sector in 2019

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: EPA.

    This past year has seen an increased focus on achieving long-term 
carbon reduction goals. The Biden Administration has pledged to reduce 
greenhouse gas (GHG) emissions by 50-52% by 2030 and make the United 
States carbon neutral by 2050. There is no one-size-fits-all path 
toward de-carbonization. Meeting this challenge will require a broad 
array of solutions and renewable biofuels like ethanol are readily 
available today to accelerate our transition to a healthier, net-zero 
emission, 100% renewable energy future.
    In 2019, the transportation sector accounted for 29% of all 
greenhouse gas emissions in the United States, the highest of any major 
economic sector.\4\ Lowering carbon emissions in transportation is 
paramount to meet the Biden Administration goals. Biofuels can 
immediately lower GHG emissions and help de-carbonize the 
transportation sector.
---------------------------------------------------------------------------
    \4\ ``Sources of Greenhouse Gas Emissions,'' U.S. Environmental 
Protection Agency. https://www.epa.gov/ghgemissions/sources-greenhouse-
gas-emissions.
---------------------------------------------------------------------------
    Plant-based ethanol is low-carbon and can be used in our current 
auto fleet. It is also affordable, keeping fuel prices lower for all 
drivers in all communities. Drivers today can choose fuel blended with 
ten percent ethanol (E10), fifteen percent ethanol (E15), or up to 
eighty five percent ethanol (E85).
    A recent January 2021 study by Environmental Health and 
Engineering, Inc. found that ethanol reduces GHGs by 46% compared to 
traditional gasoline.\5\ The use of biofuels from 2008 to 2020 has 
already resulted in cumulative reductions of almost 1 billion metric 
tons of carbon dioxide-equivalent GHG emissions.\6\ Additionally, a 
study by Growth Energy showed that nationwide transition from E10 to 
E15 would lower GHG emissions by 17.62 million tons annually, the 
equivalent of removing 3.85 million vehicles from the road.\7\
---------------------------------------------------------------------------
    \5\ ``Carbon Intensity of corn ethanol in the United States: State 
of the science,'' Environmental Health & Engineering, Inc. Melissa 
Scully, Gregory Norris, Tania Alarcon Falconi, and David MacIntosh 
(March 2021). https://iopscience.iop.org/article/10.1088/1748-9326/
abde08.
    \6\ ``GHG Emissions Reductions due to the RFS2--A 2020 Update.'' 
Life Cycle Associates, Unnasch, Stefan and Debasish, Parida. February 
2021. https://ethanolrfa.org/file/748/LCA_-_RFS2-GHG-Update_2020.pdf.
    \7\ ``GHG Benefits of 15% Ethanol (E15) Use in the United States,'' 
Air Improvement Resources, Inc. http://www.airimprovement.com/reports/
national-e15-analysis-final.pdf.
---------------------------------------------------------------------------
    Recent data from the U.S. Energy Information Administration (EIA) 
indicates that while we will see dramatic growth in the number of 
electric vehicles, vehicles that run on liquid fuels will dominate the 
light duty transportation landscape for decades. EIA's Annual Energy 
Outlook from 2021 stated that gasoline and flex fuel vehicles will 
account for 79% of vehicles sales in 2050, down from 95% today, as 
referenced in Figure 2.\8\ Moreover, EIA projects in its 2021 
International Energy Outlook that, worldwide, the number of 
conventional light-duty vehicles--those which operate on liquid fuels--
will not peak until 2038.\9\
---------------------------------------------------------------------------
    \8\ ``Annual Energy Outlook 2021,'' Energy Information 
Administration. https://www.eia.gov/outlooks/aeo/pdf/
AEO_Narrative_2021.pdf.
    \9\ ``EIA projects global conventional vehicle fleet will peak in 
2038,'' Energy Information Administration. https://www.eia.gov/
todayinenergy/detail.php?id=50096&src=email.
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Figure 2: Light-duty Vehicle Sales by Fuel Type
Light-Duty Vehicle Sales by Technology/Fuel AEO2021 Reference Case
Millions of Vehicles

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          Source: U.S. Energy Information Administration.

    To meet these challenges, we cannot rely on a single solution to 
propel our transportation sector to net-zero carbon emissions by 2050. 
We will need every tool in our toolbox. We will see increased efforts 
towards electrification and vehicle efficiency, but we will also need 
more biofuels like ethanol, which have the potential to do even more to 
reduce the carbon intensity of transportation with the right 
combination of policy and marketplace certainty. An analysis by the 
Rhodium Group released in January 2021 found that biofuels are a 
mainstay for any climate strategy looking to attain net-zero emissions 
by 2050.\10\
---------------------------------------------------------------------------
    \10\ ``Closing the Transportation Emissions Gap with Clean Fuels,'' 
Rhodium Group. https://rhg.com/research/closing-the-transportation-
emissions-gap-with-clean-fuels/.
---------------------------------------------------------------------------
    One of the most compelling demonstrations of the essential role 
biofuels play in meeting climate goals is California's Low Carbon Fuel 
Standard (LCFS). The goal of the LCFS is to, ``encourage the use of 
cleaner low-carbon transportation fuels in California, encourage the 
production of those fuels, and therefore, reduce GHG emissions and 
decrease petroleum dependence in the transportation sector.'' \11\
---------------------------------------------------------------------------
    \11\ California Air Resources Board. Accessed 6/15/2021, https://
ww2.arb.ca.gov/our-work/programs/low-carbon-fuel-standard/about.
---------------------------------------------------------------------------
    According to data by the California Air Resources Board (CARB), 
biofuels are responsible for nearly 80% of all carbon reductions 
credited under the LCFS, with the recorded carbon intensity (CI) of 
ethanol declining 33% since 2011.\12\
---------------------------------------------------------------------------
    \12\ ``Data Dashboard: Low Carbon Fuel Standard,'' California Air 
Resources Board. May 2020, https://ww3.arb.ca.gov/fuels/lcfs/dashboard/
dashboard.htm.
---------------------------------------------------------------------------
    CARB tracks the CI of a variety of fuel options and has updated the 
CI scores annually since the state's LCFS was adopted in January 2011. 
Figure 3 shows the steady decline in the CI score for ethanol and the 
uptick in CI score for gasoline over the same period.
Figure 3: CARB's Carbon Intensity Scores of Ethanol and Gasoline

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: California Air Resources Board.

    Improvements in ethanol's CI scores can be attributed to the 
biofuel industry's increased manufacturing efficiency through less 
energy intensive energy usage, more effective biotechnology, lower 
water usage and increased efficiencies in the amount of land used for 
biofuel feedstock production. America's corn growers are producing 
stronger yields with less acreage, and biorefineries can manufacture 
more gallons of ethanol per bushel of corn. Total cropland acreage has 
fallen from 470.8 million acres in 1978 to 391.9 million acres in 
2012.\13\ Moreover, yields of corn have increased dramatically over the 
last 50 years, increasing from 72.4 bushels per acre in 1970 to 172 
bushels per acre in 2020. Over the last 10 years, corn yield has 
increased by 20%,\14\ while land planted for corn has remained steady. 
Figure 4 demonstrates the improvements in corn yields over the last 150 
years.
---------------------------------------------------------------------------
    \13\ ``Cropland, 1945-2012, by State: The sum of cropland used for 
crops, cropland idled, and cropland used for pasture,'' U.S. Department 
of Agriculture's Economic Research Service. August 2017, https://
www.ers.usda.gov/data-products/major-land-uses/.
    \14\ ``Crop Production Historical Track Records,'' National 
Agricultural Statistics Service. April 2021, https://www.nass.usda.gov/
Publications/Todays_Reports/reports/croptr21.pdf.
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Figure 4: Corn Crop Yields 1866-2019

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Data Source: USDA-NASS (as of Jan. 2020).
          Source: USDA-NASS and Historical Corn Grain Yields in the 
        U.S. (Purdue University) *
---------------------------------------------------------------------------
    * https://www.agry.purdue.edu/ext/corn/news/timeless/
YieldTrends.html.
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USDA: A Department Well Positioned to Help De-carbonize Transportation
    USDA's 2015 Biofuel Infrastructure Partnership (BIP) and the 2020 
Higher Blends Infrastructure Incentive Program (HBIIP) are prime 
examples how the Department can support the productivity of our farmers 
and boost rural economies while decreasing GHG emissions. With the $1 
billion of funding included in the Build Back Better (BBB) Act to 
expand the availability of biofuels, we stand ready to work with the 
Department to put this funding to work to further de-carbonize the cars 
on the road today.
    Currently, more than 95% of cars on the road are compatible with 
E15,\15\ and consumers have driven more than 25 billion miles on the 
fuel. There is a significant market available today for higher blends 
of biofuels like E15 if consumers can access these products. The 
biofuels industry is ready to provide the fuel necessary to meet those 
demands; however, long-term infrastructure incentives for our 
retailers, like the competitive grant structure under BIP and HBIIP, 
must be available.
---------------------------------------------------------------------------
    \15\ Air Improvement Resources, Inc. ``Analysis of Ethanol 
Compatible Fleet for Calendar Year 2021,'' November 9, 2020. https://
growthenergy.org/wp-content/uploads/2020/11/Analysis-of-Ethanol-
Compatible-Fleet-for-Calendar-Year-2021-Final.pdf.
---------------------------------------------------------------------------
    Demand for these grants exceeded funds available, demonstrating 
that retailers and the working families they serve want a lower cost 
fuel and more choices at the pump. This gives retailers a competitive 
advantage in the market while providing our transportation sector a 
higher quality fuel that decreases GHG emissions.
Build Back Better with Biofuels
    The BBB Act currently before Congress includes important 
infrastructure funding to encourage the adoption and availability of 
higher-level biofuel blends through the Biofuel Infrastructure and 
Agriculture Product Market Expansion provision included in the bill. 
This important funding is a key component of a suite of authorities 
included in the BBB that provide concrete incentives to lower the 
carbon intensity of transportation fuel.
    The Biofuel Infrastructure and Agriculture Product Market Expansion 
program provides $960 million in funding through September 30, 2031, to 
install, retrofit, or otherwise upgrade fuel dispensers or pumps and 
related equipment, storage tank system components, and other 
infrastructure required at a location to dispense ethanol blends above 
10% and biodiesel blends above 5%. Funds may also be used to build and 
retrofit distribution systems for ethanol blends, traditional and 
pipeline biodiesel terminal operations (including rail lines), and home 
heating oil distribution centers or equivalent entities to blend 
biodiesel and to carry ethanol and biodiesel. This provision authorizes 
a maximum Federal share of a project would be 75%, up from 50% under 
the most recent USDA program from 2020. And importantly, the provision 
allows USDA to provide sizeable grant packages to market participants 
that sell high volumes of fuel, allowing the program to secure more 
carbon reductions at a lower cost.
Biofuel Infrastructure and Agriculture Product Market Expansion Program 
        Recommendations
    Having worked very closely alongside retailers for both BIP and 
HBIIP to secure grant funding, and having administered the industry's 
more than $90 million private matching grant program, Prime the Pump, 
we have three different recommended approaches we encourage the House 
Agriculture Committee and USDA to consider for the next round of 
infrastructure incentives for higher blends should the BBB be passed 
into law:

  1.  Use an equipment-focused approach and allow all fuel dispensing 
            and underground storage equipment upgrades to be eligible 
            under a future grant program.

        Historically, BIP and HBIIP have focused on dispenser 
            replacement and underground storage tanks. However, there 
            are more than 100 pieces of equipment needed to legally 
            dispense fuels, so the cost per site can vary widely based 
            on retailer needs. Based on historical sales data provided 
            by retailers, assuming a $960 million grant program, this 
            program would generate about 8 billion gallons of E15 
            sales. The program should also require that E15 is sold on 
            a shared hose with other grades of fuel to make consumer 
            access as easy as possible.

  2.  Provide a sales incentive for retailers offering E15.

        Industry research by the National Association of Convenience 
            Stores \16\ found that consumers will drive 5 miles out of 
            their way to save $0.05 per gallon. By providing a $0.05 
            per gallon of E15 incentive, a $960 million grant program 
            has the potential to yield nearly 18 billion gallons of E15 
            sales. Offering retailers a performance incentive, along 
            with small bonus payments for installation targets, has 
            been the optimal method for Prime the Pump.
---------------------------------------------------------------------------
    \16\ National Association of Convenience Stores. ``2015 Retail 
Fuels Report,'' Page 12. https://www.convenience.org/.

  3.  Increase funding for large volume retailers and streamline the 
---------------------------------------------------------------------------
            paperwork required by a retailer.

        We are pleased to see that the language included in the BBB Act 
            that allows for additional funds for large-volume 
            retailers. Some larger retail chains will want to upgrade 
            hundreds of stores to provide universal access to E15 and 
            higher blends across their entire market chain, increasing 
            the availability of low-carbon liquid fuels. For small 
            retailers, reducing the amount of paperwork will help them 
            access infrastructure grants. Lastly, we recommend that any 
            future grant programs allow companies which aggregate fuel 
            for several small retailers be eligible to participate in 
            the program as well.

    In the end, flexibility is the most important element of the next 
infrastructure program. Focusing the grants solely on dispensers and 
tanks, disincentivizing large volume retail locations, or issuing too 
many burdensome administrative hurdles limits overall access to the 
program. We encourage the Subcommittee and USDA to leverage learnings 
from previous public and private grant programs. Growth Energy will 
lend our expertise to help in any way we can to ensure a future program 
is another success.
Build Back Better Provides Voluntary Incentives to Lower Carbon Farming
    America's biorefineries have deployed a number of low-carbon 
practices to reduce the carbon intensity of our fuel, including wind 
energy, solar energy, carbon capture, combined heat and power, and 
more. In fact, almost all capital expenditures at ethanol biorefineries 
today are aimed at reducing their carbon footprint to take advantage of 
low-carbon fuel markets like those in the western United States and 
abroad.
    Even with significant innovation at our member's plants, farming 
practices still account for roughly 50-65% of the lifecycle carbon 
emissions of these fuels. Farmers have already responded to the call 
for improved sustainability, using fewer inputs and increasing 
efficiencies in their farming practices. These improved practices have 
already helped reduce the CI of farming, and therefore the overall 
carbon intensity of biofuels.
    The BBB Act provides further voluntary incentives like cover crops, 
nutrient management, buffers, and incentives for locally led 
conservation efforts that will help reduce the CI of agriculture even 
further, helping biofuel producers provide an even lower carbon liquid 
fuel at a time when demand for low-carbon fuels is rising. As biofuel 
producers benefit from low-carbon farming practices, farmers also 
benefit in the form of premium prices for their commodities.
    States like California, Oregon, and Washington are all placing an 
emphasis on incorporating more carbon-friendly fuel into their 
transportation supply through Low Carbon Fuel Standard and Clean Fuel 
Standard (CFS) programs in the states. The LCFS places a premium on 
fuel sources which have lower CI scores to act as an incentive to fuel 
producers. Biofuels continue to provide the foundation towards reaching 
goals set in both California's LCFS and Oregon's CFS, but the American 
farm economy could further benefit with improved modeling.
    For example, the LCFS does not currently account for low-carbon 
farming practices when rating the CI for various biofuels. Using less 
fertilizer through precision agriculture technologies lowers nitrogen 
use and would improve ethanol's CI score. Further improvements also 
include adopting farming techniques like no-till and planting cover 
crops keep nutrients in soil. The CI score can also be lowered 
significantly through the use of updated modeling that accurately 
reflects the carbon sequestered with the planting of corn, a natural 
carbon sink. Accounting for the CI benefits brought by these techniques 
and more would provide a greater premium for ethanol producers and the 
farmers they support.
How the Build Back Better Act Will Encourage More Low-Carbon Biofuels
    Besides the important funding for infrastructure and voluntary 
farming incentives, the BBB Act contains several important incentives 
that will help ethanol producers further reduce the CI of their fuels 
and explore new markets outside of light-duty vehicles. We appreciate 
and support the inclusion of the following items:

  1.  The extension and increase of the 45Q tax incentive for the 
            capture, utilization, and storage of carbon dioxide.

        Roughly half of our member plants either capture carbon for 
            food and beverage use, expect to transport carbon dioxide 
            by a carbon pipeline for permanent geologic storage, or 
            expect to store carbon nearby for geologic storage. With 
            99.9% pure, clean fermentation carbon from an ethanol plant 
            being relatively easy to capture, our facilities provide a 
            good opportunity to deploy carbon capture technology and 
            appreciably lower emissions. For the average U.S. ethanol 
            plant, carbon capture can cut the CI in half.

  2.  The establishment of the Clean Fuel Production Credit (CFPC, or 
            45CC), which provides an incentive to produce low-carbon 
            biofuels.

        This credit provides a producer-based tax incentive to 
            encourage the adoption and deployment of low-carbon fuel 
            technologies. The size of the incentive is based on the 
            percentage of carbon reduction relative to a fixed 
            baseline, re-orienting our biofuels tax policy toward 
            carbon reductions instead of producing specific types of 
            fuel.

  3.  A credit for the blending and production of sustainable aviation 
            fuel (SAF).

  4.  The BBB Act establishes a standalone credit for SAF from 2022-26 
            and folds the SAF credit into the CFPC for 2027-31.

        If properly implemented, these SAF incentives could provide a 
            new marketplace for ethanol.

    We would also like to provide the Committee with a list of 
suggested changes that would make the three provisions above work 
better and further reduce carbon in the transportation sector:

  1.  A facility cannot claim CFPC (including SAF) and 45Q at the same 
            time in last 5 years, while they can claim the initial 
            standalone SAF credit and 45Q for first 5 years.

        Because SAF will need an additional incentive to ensure parity 
            with petroleum-based jet fuel, we believe that allowing an 
            ethanol producer to claim both credits will have the 
            maximum carbon reduction benefit and will continue to drive 
            innovation in our industry.

  2.  The CFPC does not start until 2027, leaving ethanol producers 
            without a de-carbonization incentive between 2022 and 2027.

        We recommend allowing low-carbon fuel facilities the option to 
            elect to start the CFPC in 2022 to further accelerate 
            emissions reductions.

  3.  The positive 45Q changes only impact projects that commence 
            construction after January 1, 2022.

        We would encourage these changes to apply to all projects, 
            allowing forward-thinking facilities that have already 
            begun efforts to innovate to capture this benefit.

  4.  Despite improvements, the SAF modeling language is still 
            confusing and is now bifurcated after 2027 between non-
            aviation fuels, which use the Greenhouse Gases, Regulated 
            Emissions, and Energy Use in Technologies (GREET) Model by 
            the Argonne National Laboratory, and SAF, which has limited 
            specification for a life cycle analysis model.

        We recommend adopting the GREET model for all biofuels--
            including SAF--from the date of enactment moving forward. 
            The Department of Energy's Argonne National Laboratory is a 
            world leader in lifecycle analysis of biofuels, and it only 
            makes sense to adopt their latest analysis, which is 
            updated annually. It is important that new tax incentives 
            are guided by technology-neutral life-cycle assessments by 
            scientists who understand the U.S. biofuel sector. U.S. tax 
            credits must reflect U.S.-based modeling.
        Our industry is committed to growing more clean energy jobs and 
            the incentives in this legislation would provide that 
            opportunity. We would encourage Congressional leaders to 
            provide more detailed information on how our common goal of 
            growth in clean-energy jobs can be met with the prevailing 
            wage and apprenticeship requirements in the legislation.
Figure 5: Achieving Net-Zero Ethanol
Carbon Intensity of Ethanol Continues To Approach Net-Zero

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


          Source: California Air Resources Board and Environmental 
        Health and Engineering.

    Biorefineries are researching and implementing technological 
improvements to further reduce the carbon intensity of ethanol. Using 
the California Air Resources Board data on the carbon intensity of 
ethanol as shown in Figure 5 above, biorefineries can reach net-zero 
ethanol and even achieve negative carbon emissions using today's 
technology. Some examples include installing more renewable sources of 
energy including wind and solar and installing carbon capture and 
sequestration equipment.
    Sustainable farming practices can also have an impact on reducing a 
biorefinery's carbon intensity score. Precision fertilizer and 
accurately accounting for the carbon sequestered with the planting of 
corn are other examples of methods to further reduce the carbon 
intensity.
A Strong and Growing RFS Will Continue to Cut Carbon Emissions from 
        Transportation
    The Renewable Fuel Standard (RFS) is one of the nation's most 
successful renewable energy policies in reducing GHGs and providing a 
steady market for U.S. grain. This policy is the bedrock for the modern 
biofuels industry, providing a stable policy platform for ethanol 
producers to grow, expanding our nation's supply of renewable, low-
carbon liquid fuels. Given the importance of this policy, we are 
greatly concerned about media reports that the Biden Administration is 
considering cutting the RFS, a position we believe directly contradicts 
President Biden's strong commitment to biofuels as a way to help rural 
economies and lower carbon emissions and only leaves us further reliant 
on fossil fuels.
    Biofuels have long been an economic driver for our rural economies. 
In addition to the key jobs statistics cited at the outset of this 
testimony, it is important to note that biorefineries employ a skilled 
workforce in small, rural communities and are often the epicenter of 
the local economy. Accordingly, we have a strong interest in the future 
success of American agriculture.
    Rural communities are eager to lead this charge, and the benefits 
to our economy are significant, especially as the cost of oil surges. 
Ethanol saves the average household $142 per year--an average of 22 
per gallon--and even more with higher blends of ethanol. With this 
homegrown energy comes homegrown jobs, from farmers to the union 
professionals. As Daniel Duncan, Executive Secretary-Treasurer of the 
Maritime Trades Department (MTD), AFL-CIO, said just last week, 
``[u]nion members are not just on the production side of the American 
biofuel industry, but also build, operate, and maintain the 
infrastructure that keeps homegrown fuels like ethanol and biodiesel 
flowing. This sector is an important source of strength for union jobs, 
especially when it comes to growth in agricultural regions of the 
nation.'' \17\
---------------------------------------------------------------------------
    \17\ Seafarers International Union. ``Biofuel Industry Boosts Union 
Jobs.'' November 10, 2021. https://www.seafarers.org/biofuel-industry-
boosts-union-jobs/.
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Figure 6: Contribution of Ethanol Production to Individual State 
        Economies, 2019

----------------------------------------------------------------------------------------------------------------
                     Production (Mil
                           Gal)         Production Share     GDP  (Mil $)     Employment Jobs    Income  (Mil $)
----------------------------------------------------------------------------------------------------------------
            IA               4,126              26.0%             $9,096             82,294             $4,910
            NE               2,176              13.7%             $4,797             43,401             $2,589
             IL              1,833              11.5%             $4,041             36,560             $2,181
            MN               1,315               8.3%             $2,900             26,232             $1,565
            IN               1,083               6.8%             $2,388             21,601             $1,289
            SD               1,002               6.3%             $2,209             19,985             $1,192
            WI                 648               4.1%             $1,429             12,924               $771
            ND                 487               3.1%             $1,074              9,713               $579
            KS                 518               3.3%             $1,142             10,332               $616
            OH                 408               2.6%               $900              8,138               $485
            TX                 335               2.1%               $739              6,682               $399
            Ml                 283               1.8%               $624              5,644               $337
            TN                 230               1.4%               $507              4,587               $274
            MO                 165               1.0%               $364              3,291               $196
            NY                 165               1.0%               $364              3,291               $196
            CA                 158               1.0%               $348              3,151               $188
            CO                 125               0.8%               $276              2,493               $149
            GA                 120               0.8%               $265              2,393               $143
            PA                 110               0.7%               $243              2,194               $131
----------------------------------------------------------------------------------------------------------------
*Excludes construction, exports and R&D.

          Source: ABF Economics.

    In a February 2020 study, ABF Economics broke down the economic 
impact ethanol production brought to each state in 2019 which is shown 
in Figure 6.\18\ The RFS is the policy that supports all this good work 
in building out clean-energy jobs in our rural areas and supporting the 
U.S. farm economy. We ask that the Members of this Subcommittee work 
with the Environmental Protection Agency (EPA) in ensuring the agency 
releases growth-oriented Renewable Volume Obligations (RVOs), the 
annual requirement for renewable fuel blending. In a first test of 
upholding his campaign promises, it has been reported that President 
Biden's EPA will reach back 2 years and retroactively lower RVOs for 
2020 and also propose flat RVOs for 2021 with no market-forcing 
considerations.
---------------------------------------------------------------------------
    \18\ ``Contribution of the Ethanol Industry to the Economy of the 
United States in 2019,'' Urbanchuk, John M., Managing Partner. February 
4, 2020. https://files.constantcontact.com/a8800d13601/9e769376-3aef-
4699-b31f-3c6415b8fa63.pdf.
---------------------------------------------------------------------------
    We are especially concerned about EPA reopening the 2020 RVOs 
retroactively and acceding to requests by oil states and refineries to 
lower 2020 RVOs for reasons unrelated to RFS compliance. The Biden 
Administration simply cannot meet its climate goals while retroactively 
rolling back low-carbon biofuel blending requirements even further to 
help oil refiners, in particular, when the hardship they claim 
resulting from the COVID crisis has been widely shared across a number 
of economic sectors. In addition, this would be an unprecedented move 
that not only exceeds EPA's legal authority under the RFS, but also 
would fail to recognize the RFS' built-in mechanism, via the annual RVO 
percentage standard, that already accounts for any changes in fuel 
demand that differ from original projections. When COVID decreased fuel 
demand in 2020, the RFS percentage standard decreased the requirement 
for conventional biofuels by at least 1.6 billion gallons, a more than 
10% decrease. There is no need for further decreases.
    We are also awaiting the RVOs for 2022, which will establish a 
foundation for RVOs over the next few years as EPA begins the Set 
rulemaking process to establish renewable fuel volumes for 2023 and 
beyond. It is critically important that EPA propose 15 billion gallons 
of implied conventional biofuels for 2022 so that the ethanol industry 
has a solid foothold in producing adequate supply in for years to come.
    We urge you to continue to coordinate with EPA on proposing strong 
RVOs for 2021 and 2022 and release those values as soon as possible. We 
strongly oppose further delay and uncertainty with the RVOs--similar to 
what we saw in 2014 and 2015--and in particular, the loss of a binding, 
strong requirement for 2022. Continued delay creates uncertainty in the 
marketplace and has profound implications on the RFS set and the future 
of the program. The 2022 RVO, for example, will set the ratio of total 
vs. advanced renewable fuel volumes for 2023 RVOs and beyond. If EPA 
sets the 2022 RVO below 15 billion gallons of conventional biofuels--or 
does not set it at all--this could negatively impact renewable fuel 
blending for years to come.
Small Refinery Exemptions
    Despite the demonstrable economic, environmental, and energy 
security success of the RFS, the Trump Administration repeatedly 
granted oil refiners an unprecedented number of small refinery 
exemptions (SREs), allowing them to avoid their obligations to blend 
biofuels into our national fuel supply. Many on this Subcommittee 
advocated on behalf of biofuel producers in your districts to the Trump 
Administration against this radical escalation of exemptions, and we 
thank you for those efforts.
    The SRE authority was included under the Clean Air Act to provide 
small refineries (those with a daily input capacity of less than 75,000 
barrels of crude oil) with a temporary avenue to avoid blending 
obligations, provided the refinery demonstrate that compliance results 
in severe economic hardship. But in the previous Administration, the 
number of SREs increased six-fold with no transparency into the process 
or explanation as to which refineries received an exemption and why.
    As shown in Figure 7, EPA granted 88 SREs over 4 years, which cost 
the industry 4.3 billion gallons of lost biofuel demand. Many of the 
SREs went to some of the largest, most profitable oil companies in the 
world.
Figure 7: SREs by Administration

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: EPA's SRE Dashboard.

    In January 2020, the 10th Circuit Court of Appeals issued a 
unanimous decision that invalidated SREs granted by EPA to three 
refineries for the 2016 and 2017 compliance years on three grounds. 
First, the court held that EPA could grant SRE ``extensions'' only to 
those refineries who had received SREs in all prior years. Second, the 
court held that it was improper for EPA to find disproportionate 
economic hardship on bases other than alleged hardship caused solely by 
compliance with the RFS. Third, the court held that EPA failed to 
explain why it deviated from its previous position that refineries 
recoup their costs of compliance through downstream pricing. The 
refineries petitioned the U.S. Supreme Court for review of the decision 
solely on the first, ``extension'' holding of the 10th Circuit, and the 
case was argued before the Court on April 27, 2021. On June 25, 2021, 
the Supreme Court overturned the ``extension'' portion of the 10th 
Circuit opinion.
    Under the Biden Administration, EPA has stated that it agrees with 
the remainder of the 10th Circuit Court's opinion, in particular, that 
SREs must be based solely on hardship caused by compliance with the 
RFS.
    We strongly urge the Biden Administration to uphold the integrity 
of the RFS program by encouraging more renewable, low-carbon fuel 
blending, narrowing the use of SREs in line with the decision in the 
10th Circuit Court of Appeals, and set conventional blending 
requirements of at least 15 billion gallons.
RIN Prices
    Renewable Identification Numbers (RINs) were included in the RFS to 
add flexibility to the compliance mechanism of the RFS. Obligated 
parties have the option to either blend biofuels and generate RINs or 
purchase RINs to meet their obligations under the RFS.
    We are aware that some refiners that have chosen to purchase RINS 
in lieu of blending renewable fuels are seeking a waiver for their 
blending obligations, citing economic hardship as a result of high RIN 
prices. Some refineries claim this causes higher gasoline prices. To be 
clear, there is no relationship between RIN prices and refinery 
profits, as EPA has repeatedly stated:

          ``We do not believe that the price paid for RINs is a valid 
        indicator of the economic impact of the RFS program on these 
        entities [refiners], since a narrow focus on RIN price ignores 
        the ability for these parties to recover the cost of RINs from 
        the sale of their petroleum products.'' \19\
---------------------------------------------------------------------------
    \19\ ``Renewable Fuel Standard Program--Standards for 2019 and 
Biomass-Based Diesel Volume for 2020: Response to Comments.'' 
Environmental Protection Agency, November 2018. https://nepis.epa.gov/
Exe/ZyPDF.cgi?Dockey=P100VU6V.pdf.

    First, as EPA wrote in November 2018, refiners recoup the cost of 
RIN purchases when they sell petroleum products on the market. Any RIN 
cost is incorporated into the sell price, so refineries account for 
this during their transactions.
Figure 8: Price of Retail Gas, WTI Crude, and D6 RINs


          Source EIA, EPA.

    Second, refineries have had almost 14 years to comply with the RFS, 
a law which was constructed to encourage an increasing scale of biofuel 
blending. Supply and demand ultimately dictate price, so blending more 
biofuel creates more RINs, which in turn push RIN prices down. The 
easiest way to lower RIN prices is to blend more biofuels.
    With respect to gas prices, as shown in Figure 8, gas prices are 
directly correlated with the price of crude oil, not RINs. According to 
the EIA, crude oil is the most impactful contributor, accounting for 
56% of the price of gasoline.\20\ The RIN market is independent from 
gas prices and instead reflects the blending decisions by obligated 
parties.
---------------------------------------------------------------------------
    \20\ U.S. Energy Information Administration. ``Gasoline explained--
Factors affecting gasoline prices,'' https://www.eia.gov/
energyexplained/gasoline/factors-affecting-gasoline-prices.php.
---------------------------------------------------------------------------
    The RFS works best when it is implemented in accordance with 
Congressional intent. We encourage Members of this Subcommittee and the 
administrative bodies it oversees to maintain the integrity of the RFS.
Breaking Down Barriers to Biofuels: Marketplace Hurdles for Higher 
        Blends
    As stated earlier, a nationwide transition from E10 to E15 would 
lower GHGs by 17.62 million tons annually, the equivalent of removing 
3.85 million vehicles from the road. Further, an ABF Economics study 
from June 2021 \21\ shows that moving to a nationwide E15 standard 
would offer even further economic benefits:
---------------------------------------------------------------------------
    \21\ ABF Economics. ``Economic Impact of Nationwide E15 Use,'' 
Urbanchuk, John M. June 10, 2021. https://growthenergy.org/wp-content/
uploads/2021/06/Nationwide-E15-Use-Economic-Impact-Final.pdf.

---------------------------------------------------------------------------
   Add $17.8 billion to the U.S. Gross Domestic Product

     $27.9 billion would come from boosted corn production

   Create an additional 182,700 jobs

     76,000 of these would be in agriculture

   Generate $10.5 billion in new household income

   Save consumers $12.2 billion fuel costs annually

     E15 is typically $0.05 to $0.10 cheaper than E10 due 
            to the higher ethanol content

    Agriculture jobs that would be supported by a nationwide E15 
standard include farm advisors, producers, distributors of crop 
protection and fertilizer products, farm equipment, and other service 
providers. These jobs are typically located in rural parts of the 
United States and would greatly benefit from more biofuel production 
due to E15 expansion efforts.
    However, the pathway to these higher-level ethanol blended fuels 
has regulatory hurdles and outdated policy assumptions. To fully 
realize these potential gains in economic growth and emissions 
reductions, we recommend Congress pass legislation, the Year-Round Fuel 
Choice Act (H.R. 4410), or EPA take relevant regulatory action to 
restore summer sales for E15 and complete a pending rulemaking that 
would clear unnecessary hurdles related to the pump labeling of E15 and 
clarify some potential refueling infrastructure hurdles.
Summer E15 Sales Restriction
    The Clean Air Act includes seasonal fuel vapor pressure provisions 
intended to reduce evaporative emissions in the summer months (June 1 
to September 15). In the 1990 amendments to the Clean Air Act, Congress 
limited allowable fuel vapor pressure during the summer months to 9 
pounds per square inch (psi) Reid Vapor Pressure (RVP) in certain areas 
of the country. Congress also specified, however, that fuel blends 
containing 10% ethanol would receive a 1.0 psi RVP waiver from the 
seasonal RVP limit to encourage use of ethanol-blended fuels, which 
provide significant reductions in tailpipe emissions. This RVP waiver 
made the sale of E10 and lower ethanol blended fuels possible year-
round throughout the country. However, the waiver predates the 
introduction of higher blends of ethanol like E15, which have a lower 
RVP than E10.


    In May 2019, EPA clarified that E15 could be sold in the summer 
months, resolving ambiguity in the 1990 statute that arose because 
there was no 15% ethanol fuel at the time. Following this EPA 
rulemaking, the oil industry challenged this rulemaking in court. In a 
July 2021 D.C. Circuit Court of Appeals ruling, the court reversed 
EPA's interpretation, denying the majority of American drivers access 
to a cleaner, more affordable biofuel blend during the summer months 
starting on June 1, 2022. This move threatens the expansion of clean, 
homegrown renewable energy.
    The DC Circuit ruling affects nearly 85% of retailers currently 
selling E15 across 30 states and creates needless uncertainty across 
the marketplace. We urge the Members of this Subcommittee to move 
swiftly to ensure uninterrupted access to lower-cost E15 for the summer 
of 2022 and beyond, particularly as consumers seek relief from rising 
gasoline prices. If not addressed, the court's decision would require 
E15 retailers to change out fuels twice a year (on June 1 and September 
15), a costly and burdensome process that actually increases GHG 
emissions, counter to Congress' intent of providing cleaner fuel 
choices at the pump.
    This decision impacts all non-reformulated gasoline markets 
throughout 33 states--conventional markets outside of urban areas that 
are not required to participate in our nation's reformulated gasoline 
program. In these areas, summer sales of E15 in retail sites could fall 
by 85%, and the new restrictions on E15 sales would also cut overall 
ethanol consumption and increase greenhouse gas emissions nationwide as 
more petroleum products would be used. This decision has no impact on 
long-standing rules that permit sales of E15 in RFG and other markets, 
which are found in 17 states. However, the largest concentration of RFG 
markets is in California and the Northeast, where the availability of 
E15 is already limited.
Labeling and Equipment Compatibility



 
 
 
         Current EPA Label           Growth Energy Proposed Label
 

    In order to remove unnecessary barriers that prevent consumers from 
utilizing E15, Growth Energy supports EPA finalizing their proposed 
rule to address E15 Fuel Dispenser Labeling and Compatibility with 
Underground Storage Tanks that would erase market hurdles for E15 
adoption. We support modifying the E15 label requirement to increase 
clarity and ensure it clearly advises consumers of appropriate uses of 
the fuel, while not unnecessarily dissuading the vast majority of 
consumers whose vehicles can refuel with E15.\22\ Either modification 
of EPA's E15 label or removal of the E15 label requirement entirely 
would expressly preempt and conflict--preempt any state or local 
government E15 label requirement.
---------------------------------------------------------------------------
    \22\ Growth Energy Comment on EPA's NPRM ``E15 Fuel Dispenser 
Labeling and Compatibility with Underground Storage Tanks'' (Docket ID 
No. EPA-HQ-OAR-2020-0448): https://www.regulations.gov/comment/EPA-HQ-
OAR-2020-0448-0051.
---------------------------------------------------------------------------
    In addition, Growth Energy strongly supports EPA's proposal to 
modify the underground storage tank (UST) compatibility requirements 
applicable to E15 and other fuel blends. There is ample evidence that a 
wide variety of fuel storage equipment, including USTs and related 
piping, may store E15 if it is suitable for use with E10. Removing 
unnecessary impediments to retailers' use of such existing equipment is 
imperative to providing E15 equal footing in the fuels marketplace.
    Fixing these outdated and confusing barriers are critical to 
ensuring we can capture the emissions reduction, farm income, and fuel 
price relief benefits that come with E15 expansion. As our nation faces 
the challenges of climate change, it is imperative that EPA act quickly 
to support greater access to cleaner renewable fuel blends for all 
Americans. E15 and higher ethanol blended fuels will deliver immediate 
benefits for our environment and are a critical piece of our nation's 
efforts to reduce carbon emissions. Clearing hurdles to the sale of E15 
and growing markets of biofuels would also provide an economic lifeline 
for rural communities as they continue to rebuild in the wake of COVID.
The Future of Biofuels: De-carbonizing Land, Air, and Sea 
        Transportation
    As carbon reduction becomes more important to the transportation 
sector, ethanol is poised to play a greater role in de-carbonizing all 
forms of transportation--whether on land, in the air, or in the seas--
and we are energized by the potential opportunity to expand our role in 
reducing our nation's carbon emissions. In addition to our current 
light-duty vehicle market, we see new and emerging low-carbon fuel 
markets in hard-to-electrify sectors such as aviation, marine, and 
heavy-duty vehicle markets. Earlier in this testimony, I discussed the 
potential incentive structure for sustainable aviation fuel. U.S. based 
airlines used more than 18 billion gallons of jet fuel in 2019.\23\ 
Accessing the aviation market through ethanol to SAF, along with new 
technologies that allow ethanol to be used in marine and heavy-duty 
applications provide America's ethanol industry the opportunity to be 
utilized in more than just light duty cars and trucks.
---------------------------------------------------------------------------
    \23\ ``Airline Fuel Cost and Consumption (U.S. Carriers--
Scheduled),'' Bureau of Transporta[t]ion Statistics. https://
www.transtats.bts.gov/fuel.asp.
---------------------------------------------------------------------------
    With the appropriate investment in critical research and 
development and the right policy environment, our industry can continue 
to de-carbonize our transportation sector--from passenger vehicles to 
our aircraft fleet. However, in order to achieve the Biden 
Administration's goal of 3 billion gallons of SAF production by 2030 
and net-zero emission in aviation by 2050, we need game-changing 
solutions and for that we must have a healthy and thriving corn ethanol 
industry and rural economy. That starts with a strong RFS, a nationwide 
E15 standard, and accurate carbon modeling.
Ethanol Production Co-Products
    Ethanol biorefineries produce several valuable co-products, which 
are integral to related supply chains. The industry produced an 
estimated 43.6 million short tons of distiller's grains and nearly 3.9 
billion pounds of distiller's corn oil (DCO) in 2019 with an aggregate 
market value for these products at $7.5 billion.\24\ Distiller's grains 
are a high-protein feed purchased by local livestock farmers and 
provide a steady stream of animal feed for their farms. Roughly half of 
all DCO is used in animal feed, while the other half is used by the 
biomass-based diesel industry in their production process.
---------------------------------------------------------------------------
    \24\ ``Contribution of the Ethanol Industry to the Economy of the 
United States in 2019,'' Urbanchuk, John M., Managing Partner. February 
4, 2020. https://files.constantcontact.com/a8800d13601/9e769376-3aef-
4699-b31f-3c6415b8fa63.pdf.
---------------------------------------------------------------------------
    Additionally, about 50 biorefineries have the ability to capture a 
pure stream of carbon dioxide, which has a wide variety of uses 
including water treatment at municipal water facilities, food and 
beverage preservation. During the peak of the COVID pandemic, the 
ethanol industry also stepped up during a national hand-sanitizer 
shortage, converting ethanol production to produce high-quality, 
pharmaceutical-grade hand sanitizer for local hospitals and consumers. 
Captured carbon dioxide is also being used as dry ice for the safe 
transportation of COVID vaccinations.
Ensuring Access to International Markets for U.S. Ethanol
    As nations around the globe are looking to achieve their carbon 
reduction goals, international markets are turning to biofuels as a 
solution. However, tariffs, technical trade barriers, and follow-
through on trade agreements pose challenges to U.S. exporters looking 
to fulfill growing biofuel demand abroad.
Total U.S. Ethanol Exports by Year


          Source: USDA.

    The USDA designates an official trade representative who leads 
efforts on promoting U.S. agricultural products, including biofuels, 
abroad. USDA Secretary Vilsack has not yet selected a nominee to fill 
that position, but we encourage him to do so as soon as possible.
    In 2020, U.S. ethanol exports totaled 1.33 billion gallons, which 
fell 9.8% compared to 2019.\25\ The decline is almost entirely due to 
COVID's downward impact on gasoline demand, as shown in the graph 
[above]. Through Q3 2021, the U.S. exported 872.1 million gallons of 
ethanol. Unfortunately, this is on pace to fall below last year's 
export numbers by nearly 170 million gallons.
---------------------------------------------------------------------------
    \25\ U.S. Department of Agriculture, Foreign Agricultural Service. 
``Biofuels,'' https://www.fas.usda.gov/commodities/biofuels.
---------------------------------------------------------------------------
    Growth Energy has been working closely in markets such as Brazil, 
Canada, India, Mexico and China to encourage the adoption of biofuels 
as a displacement to petroleum products. Expanding ethanol use around 
the world will boost domestic production and help countries meet their 
carbon reduction and clean air commitments at the same time.
Industry Assistance for COVID Losses
    On June 15, 2021, USDA announced that it will provide $700 million 
in aid to support biofuel producers recover from the wake of the COVID 
pandemic. The funds will be distributed through USDA's Pandemic 
Assistance for Producers initiative to provide additional relief to the 
farmers that depend on a vibrant biofuels industry, however, no funds 
have been released to date.
    Although the details on how these funds will be distributed remain 
opaque, Growth Energy has provided USDA the following suggestions, 
which we urge you to support:

  1.  Assistance should only be available to biorefineries that were in 
            normal operation between Jan. 1 and March 1, 2020.

        As the emergency relief funding is intended to address only 
            revenues lost as a direct result of COVID, ethanol 
            biorefineries that were not operating normally prior to the 
            pandemic should not qualify to receive assistance.

  2.  Assistance levels should be the same on a per gallon basis for 
            each biorefinery who seeks assistance.

        Because each biorefinery in operation during COVID suffered the 
            same economic injury due to the pandemic, each biorefinery 
            should receive the same per gallon level of assistance. We 
            recommend providing assistance of 10 a gallon based on 
            each qualifying biorefinery's production in 2019, the last 
            full year before COVID demand destruction.

  3.  Payments made to biorefineries should be made public.

        We support making available to the public information on which 
            entities are receiving assistance and in what amount.

    We are grateful for this support from USDA which reflects President 
Biden's repeated promises to support rural and clean energy jobs. 
However, we urge the USDA to release this funding as soon as possible. 
Many biofuel producers have yet to recover from the devastating drop in 
fuel demand due to COVID and are lacking certainty due to the delay in 
releasing the COVID aid.
Higher Octane Fuels Help to Drive Lower Vehicle Greenhouse Gas 
        Standards and Better Fuel Economy
    It is imperative to consider the benefits of using high-octane, 
low-carbon fuels to make engines more efficient. Beyond E15, Growth 
Energy has been a leader on the need for higher octane, mid-level 
ethanol blends, first submitting a proposal for a 100 RON, E30 fuel 
nearly a decade ago. By moving towards higher octane, lower carbon mid-
level blends, automakers can optimize engines to further improve 
efficiency and further reduce both greenhouse gas and tailpipe 
emissions.
    The science supporting the benefits of a high-octane, low-carbon 
midlevel blend in conjunction with a high compression ratio engine is 
not new, and has been well-explored by the national labs, automobile 
manufacturers, and other scientific institutions.\26\ Ethanol has a 
very high octane number, a lower carbon content than the gasoline 
components it replaces, and myriad other benefits that assist in 
combustion to increase engine efficiency and reduce both greenhouse gas 
and tailpipe criteria pollutant emissions.
---------------------------------------------------------------------------
    \26\ See e.g., Oak Ridge National Laboratory, Summary of High-
Octane, Mid-Level Ethanol Blends Study (July 2016), available at 
https://info.ornl.gov/sites/publications/Files/Pub61169.pdf.
---------------------------------------------------------------------------
    We urge the Committee to work with USDA, EPA, and the Department of 
Transportation to move quickly to require a minimum octane standard as 
well as to approve a high-octane, mid-level ethanol blend such as that 
first proposed by Growth Energy for vehicle certification as well as 
for consumer use. Additionally, we strongly support the Next Generation 
Fuels Act (H.R. 5089) introduced by Congresswoman Bustos. This 
important legislation would increase the use of high-octane, low-carbon 
biofuels while limiting the use of harmful petroleum additives. We 
would urge Congress to consider and enact this key legislation.
Conclusion
    The biofuel industry stands ready to work with Congress and the 
Biden Administration to meet our national commitments to attaining 
aggressive climate goals by mid-century while supporting rural 
development, working families, and renewable energy. With forward-
leaning policies that support innovation and access to markets, our 
industry will continue to reduce our carbon footprint, create more 
clean energy jobs, spur economic activity in rural and farming 
communities, and provide drivers across the country with affordable, 
clean fuel choices today.
    Congress can help accelerate our transition to a clean energy 
future and a prosperous rural America with some of the provisions in 
the Build Back Better Act that help reduce the carbon footprint of 
transportation. Infrastructure investments will expand consumer access 
to higher fuel blends of homegrown biofuels like E15. Ensuring the RFS 
is administered as intended by Congress will guarantee that we blend 
more low-carbon renewable fuel in our transportation sector each year. 
And reducing trade barriers to U.S. ethanol allows greater access to 
foreign markets, boosts our domestic production, and assists other 
countries in meeting their carbon reduction commitments.
    In short, we have ample opportunity to achieve our renewable energy 
goals while supporting an industry that has supported rural America for 
decades. I appreciate the opportunity to participate in this important 
hearing on renewable energy's role for agriculture and rural economies.
    Thank you and I look forward to answering your questions.

    The Chairman. Thank you, Ms. Skor.
    Mr. Pratt, please begin when you are ready.

 STATEMENT OF JEFF PRATT, PRESIDENT, GREEN POWER EMC, TUCKER, 
                GA; ON BEHALF OF NATIONAL RURAL 
                ELECTRIC COOPERATIVE ASSOCIATION

    Mr. Pratt. Thank you, Chairman Delgado, Ranking Member 
Fischbach, and Members of the Subcommittee. On behalf of Green 
Power EMC and 38 other member cooperatives in the State of 
Georgia, we really appreciate the opportunity to testify today.
    I want to share with you the growth opportunities that we 
found in renewable energy in Georgia, and the challenges and 
opportunities that poses for rural America.
    My name is Jeff Pratt, and I am the President of Green 
Power EMC, and our co-ops serve about four million Georgians, 
there are about 900 similar cooperatives across the country 
that serve about 56 percent of the mostly rural areas of this 
country.
    In 2001, the electric co-ops in Georgia had a lot of 
foresight, and before it was popular, created Green Power EMC 
and focused on the procurement of renewable energy, mostly 
biomass energy and hydro energy. Since that time, though, in 
2015, almost 14 years later, we created our first large-scale 
solar project in about 200 acres. Six years later, today we 
have committed to over 15,000 acres. That is about an 8,000 
percent increase.
    To that end, we have made great strides in reducing our 
carbon footprint in the State of Georgia through nuclear power 
and this renewable engagement. But in rural America, and in 
Georgia, most of our solar plants are located in these areas 
where there are challenges and competing land interests. So, we 
work very hard to make sure that we are good stewards of the 
land in those areas, and we do that in a couple of ways that I 
want to share with you.
    One of them is to make sure there are no surprises to those 
rural communities, and make sure that we are very courteous and 
honor the local farms in meaningful ways. One of those is to 
create regenerative farming on the solar farm itself by putting 
sheep and managing vegetation with livestock, and sequestering 
carbon underneath in the soil of those facilities as we do so.
    There are other challenges with renewable energy in the 
State of Georgia, and while we have one of the most robust 
transmission and distribution systems in the country, the 
intermittent nature of renewable energy, especially solar in 
Georgia, creates challenges that will require investment and 
planning and dedication to make sure that we do not sacrifice 
reliability and affordability for all of our customers, which 
are very important, especially in those rural areas.
    Some of the challenges are going to require technologies 
that are just emerging, that we are just learning to engage, 
and they are not cheap. Some of the provisions in the proposed 
legislation recently include opportunities that would help make 
some of that technology more affordable as it becomes 
available, provisions such as tax incentives. Tax incentives 
are very helpful, but in Georgia, we have some difficulty as 
not-for-profit utilities and extracting the full value of those 
tax incentives. So, we would be very supportive of direct pay.
    Second, $10 billion, I understand, has been proposed to 
relieve debt burden and to invest in new clean technologies. 
All of those we would like to have in our quiver of tools to 
help increase our emission reductions in the state.
    I would like to say that we are very supportive of all the 
efforts that the Committee is looking at here. We want to make 
sure that these efforts are affordable, the efforts do not 
sacrifice reliability, and bring opportunities to rural 
America, which is a big part of the areas in which our 
cooperatives serve.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Pratt follows:]

 Prepared Statement of Jeff Pratt, President, Green Power EMC, Tucker, 
    GA; on Behalf of National Rural Electric Cooperative Association
    Chairman Delgado, Ranking Member Fischbach, and distinguished 
Members of the Subcommittee, on behalf of Green Power EMC and Georgia's 
electric cooperatives, thank you for the opportunity to testify on 
renewable energy growth across Georgia and the opportunities and 
challenges it presents for rural communities.
    My name is Jeff Pratt and I am the President of Green Power EMC, 
the not-for-profit electric cooperative that secures renewable energy 
resources for the broader family of 38 Georgia electric cooperatives. 
Electric cooperatives (or, as we call them in Georgia, Electric 
Membership Corporations (``EMCs'')) are not-for-profit electric 
utilities owned and operated by the communities they serve. In Georgia, 
electric cooperatives distribute power to their member-consumers--
residents, businesses, and public institutions--approximately 4.3 
million Georgians across 65% of the state's land area in 151 of 159 
counties. Georgia's electric co-ops represent the largest group of 
cooperatives in the U.S. based on the number of end-use customers and 
their electrical load.
    Around the country, there are approximately 900 electric 
cooperatives in 48 states serving 56% of the nation's landmass but only 
about 13% of the population. We operate in the most rural parts of the 
country and serve 92% of the country's persistent poverty counties. Our 
not-for-profit status and local control help us be nimble and 
innovative as we strive to meet evolving consumer demands.
Background
    In 2001, long before it was popular to be ``green,'' Georgia's 
electric cooperatives founded Green Power EMC to source renewable 
generation for the cooperative energy portfolio. Green Power EMC became 
the first renewable energy provider in the state of Georgia, 
aggregating the interest in renewables of small and large cooperatives 
alike, evaluating renewable energy alternatives, and recommending 
projects for cooperative participation.
    In its early days, Green Power EMC procured energy from landfill 
gas projects. Later, Green Power EMC purchased power from Georgia's 
only certified run-of-river hydro facility. In 2010, Green Power EMC 
began purchasing energy from two of Georgia's first solar projects.
    In 2015, through Green Power EMC, Georgia's cooperatives contracted 
for their first large-scale solar project--a 20 megawatt facility 
covering nearly 200 acres of land in south Georgia. In the past 6 
years, Georgia's electric cooperatives have grown their solar portfolio 
by 8,000%, utilizing approximately 15,000 acres of land in rural 
Georgia. These solar projects will collectively produce enough 
electricity to serve more than 270,000 cooperative households each 
year. This growth is driven by market economics and consumer demand, 
without mandates by our state or Federal Government.
    On behalf of its members, Green Power EMC continues to evaluate new 
solar opportunities as well as the potential for other renewable 
technologies including wind, biomass, and hydro projects. However, the 
significant decline in the cost of solar energy production equipment 
and the ample availability of sunlight in Georgia make solar energy the 
current most cost-effective means to provide affordable renewable power 
for our cooperatives.
    From a Federal perspective, 491 electric co-ops in 43 states use 
solar energy, with a combined capacity, including utility-scale and 
community solar, of 1,374.8 megawatts. In addition to solar, electric 
cooperatives have been engaged in other renewable resources for many 
years. Nationally, we have nearly tripled our total renewable capacity 
from 3.9 gigawatts in 2010 to more than 11.4 gigawatts in 2020. That's 
enough energy to serve nearly 2.7 million homes. Additionally, co-ops 
have announced more than 6.4 gigawatts of new renewable capacity 
planned from 2021-2024. Because of our geographic diversity, electric 
cooperatives are significant stakeholders in solar, wind and 
hydroelectric generation assets.
Challenges and Opportunities
    Technology and Intermittency: Georgia's electric cooperatives are 
committed to reducing greenhouse gas emissions, without sacrificing 
reliable and affordable electric service. While solar is among the 
lowest cost of energy in Georgia, the intermittent nature of this 
generating resource presents technical and economic challenges as it 
becomes a larger percentage of our electricity generation portfolio. As 
the volume of solar energy increases, so do necessary investments in 
technologies such as battery storage and new energy management control 
systems to maintain expected levels of reliability. While these 
technologies are advancing rapidly, the investment required to deploy 
these technologies is significant and the effectiveness to ensure 
reliability and affordability on a utility scale is largely unproven. 
While we wait for battery storage technologies to be perfected, Georgia 
relies heavily on base load power such as nuclear generation, to 
provide 24/7 reliability to balance the intermittency of our large 
solar portfolio.
    Transmission and Distribution: Georgia has one of the most robust 
transmission and distribution systems in the United States. The 
transmission system is unique because the infrastructure is shared 
among the state's utilities through a structure called the Integrated 
Transmission System, which comprises joint system planning and 
minimizes redundant equipment. We are accustom to responding to 
changing market conditions with cost-effective and timely transmission 
system improvements. However, as higher levels of intermittent 
generation resources are connected to our transmission and distribution 
systems, it will be necessary to adjust our system planning and 
management practices, equipment, and control software to maintain 
current levels of reliability and resiliency.
    A foundational program for most electric cooperatives in Georgia, 
and a key financial resource to help meet these transmission 
challenges, is the U.S. Department of Agriculture's Rural Utilities 
Service (RUS) Electric Loan program. Georgia's electric cooperatives 
utilize RUS loans for many basic functions of providing electricity to 
our state, such as building new distribution lines, installing smart 
meters, making environmental improvements to generation facilities, and 
strengthening transmission lines.
    Programs like the RUS Electric Loan Program will help make many of 
these transmission system improvements possible. Many states may also 
take advantage of the new opportunities made available through the 
Infrastructure Investment and Jobs Act passed by Congress just a few 
days ago.
    Co-ops and Federal Financial Incentives: Electric cooperatives are 
meeting today's energy needs and planning for the future, but 
historically we've been limited by the Tax Code and the costs of 
implementing new technologies. As not-for-profit businesses, current 
law does not allow electric cooperatives to access the full value of 
clean energy tax incentives available to taxable businesses, including 
investor-owned utilities. Electric cooperatives need access to ``direct 
pay'' tax incentives to reduce the cost of energy innovation projects, 
including the deployment of renewables, nuclear energy and other 
emerging technologies, the expansion of energy storage projects, and 
installation of electric charging infrastructure. This direct pay 
option is included as part of the clean energy tax credits in current 
drafts of the Congressional budget reconciliation bill.
    The current draft of the budget reconciliation bill also includes a 
proposed voluntary $10 billion USDA-based clean energy fund to assist 
electric cooperatives with outstanding debt on stranded generation 
assets or to facilitate the deployment of new clean energy sources. 
This program could help electric cooperatives grow green energy 
programs like we already have in Georgia.
    Rural Economic Opportunity: Georgia's rural communities have 
realized great financial benefits from the growth in cooperative solar 
projects. These projects have created thousands of construction jobs 
for local citizens and contribute significant ongoing tax revenue for 
local economies and governments supporting health, emergency, and 
school services in rural communities across Georgia. In many cases, a 
large-scale solar project generates the largest tax revenue in the 
county.
    Supply Chain: Rapid growth in demand combined with current global 
trade inefficiencies have increased the cost of solar equipment. 
Electric cooperatives are facing uncertainty about the availability of 
raw materials for all parts of our business, including the anticipated 
growth of our solar footprint in the coming months and years. This 
could be compounded by, and will need to be managed in concert with, 
the growth of new Federal incentives to incentivize more rapid 
renewable deployment.
    Balancing Land Use Demands: Despite these economic benefits, as 
investments in solar projects increase, some communities have been 
challenged to find a balance between the competing interests of solar 
land use and traditional farming operations. The majority of the land 
area ideal for solar energy facilities in Georgia is rooted in rural 
agriculture. Georgia's electric cooperatives have a long history of 
providing electricity to these agrarian communities.
    Green Power EMC and its members, in partnership with solar 
developers and innovative local agricultural leaders, are employing 
regenerative agriculture practices at solar farms, including land 
management using planned sheep grazing. Herds of livestock reside part-
time at the solar farms and graze beneath the solar panels. As sheep 
bite off the tops of plants, keeping vegetation from shading the solar 
panels, they fertilize the soil, causing more plants to grow. This 
agricultural practice is designed to improve soil health, sequester 
carbon, and boost water quality on land used for solar power 
generation. This approach also generates new long-term revenue 
opportunities for farmers and the local communities and supports 
important agricultural jobs. Additionally, these practices also promise 
to provide measurable sequestration of carbon in natural systems 
thereby providing additional mitigation of climate change challenges 
that face our planet.
Conclusion
    Green Power EMC and its member cooperatives are proud of Georgia's 
significant growth in renewable energy. We are committed to meeting the 
demands of a transitioning energy landscape in innovative ways that can 
support local economies while not sacrificing affordability or 
reliability. Thank you for conducting this hearing and for the 
opportunity to share how renewable energy is benefitting rural Georgia 
economies.

    The Chairman. Thank you, Mr. Pratt.
    Next, we have Mr. Wheeler. Please begin when you are ready.


    STATEMENT OF GARY WHEELER, EXECUTIVE DIRECTOR AND CHIEF 
              EXECUTIVE OFFICER, MISSOURI SOYBEAN 
          ASSOCIATION, MISSOURI SOYBEAN MERCHANDISING 
          COUNCIL, AND FOUNDATION FOR SOY INNOVATION, 
 JEFFERSON CITY, MO; ON BEHALF OF AMERICAN SOYBEAN ASSOCIATION

    Mr. Wheeler. Good morning, Subcommittee Chairman Delgado, 
Ranking Member Fischbach, Ranking Member Thompson, and Members 
of the Subcommittee. It truly is an honor to testify before you 
on the renewable economy and what it means for America's soy 
farmers. I am Gary Wheeler, Executive Director and CEO of 
Missouri Soybean Association, the Missouri Soybean 
Merchandising Council, and the Foundation for Soy Innovation.
    The Missouri Soybean Association, along with Missouri 
Soybean Merchandising Council and the Foundation for Soy 
Innovation, are affiliates of either the American Soybean 
Association, which represents 500,000 soybean farmers on 
domestic and international policy issues, or the United Soybean 
Board, which invests in check-off funds to advance soybean 
marketing, production, technology, and development of new uses.
    It may be obvious to the Members of this Committee that 
America's abundant supply of soybeans helps feed our country 
and the world. However, it is less known that U.S. companies 
now also offer approximately 1,000 soy biobased products, 
thanks to the versatile chemical composition of soybeans. When 
processed, soybeans are divided into protein and oil. Soy 
protein is around 80 percent of the bean and is primarily used 
in plant-based foods like tofu and in livestock animal feed, 
but is also an ingredient in plastic composites, synthetic 
fiber, paper coatings, adhesives, and more. Soybean oil, the 
remaining 20 percent of the bean, is one of the most versatile 
natural oils. Its molecular structure and suitable fatty acid 
profile can be used in many applications, from food use and 
cosmetics, to asphalt and biodiesel.
    Bioproducts made from soy are sustainable. Unlike fossil 
fuel-based feedstocks, soybeans capture carbon dioxide from the 
atmosphere. In addition, most soybean acreage in the U.S. uses 
conservation tillage, which disturbs less soil and helps 
sequester carbon in cropland. Soy bioproducts also lower 
greenhouse gas emissions, reduce energy costs, and exposure to 
toxic chemicals by workers, and add credits toward LEED 
certification. There are also economic advantages to using soy 
in manufacturing and consumer products.
    This year, growers are harvesting an immense crop of 4.4 
billion bushels. This abundance has enabled soy ingredients to 
maintain an historic price advantage over petrochemical 
equivalents, and has helped reduce America's dependence on 
foreign oil.
    Soy-based bioproducts create jobs. USDA's most recent 
report on the economic impact of the U.S. biobased products 
industry found that increasing demand for domestic biobased 
products added $470 billion and over 4.6 million direct and 
indirect jobs to the U.S. economy.
    In Missouri, we partner with Cole County Sheriff's 
Department to demonstrate that Goodyear soy tires perform so 
well that they meet the demands of law enforcement. Goodyear 
determined that soybean oil mixes more readily with rubber 
compounds, reducing energy consumption and improving tire 
efficiency. Goodyear is now increasing soy oil consumption as 
part of their commitment to phase out petroleum-derived oils 
from products by 2040.
    Another opportunity in the transportation sector is 
PoreShield, a soy-based concrete protector developed through a 
partnership among Purdue University, the Indiana Soybean 
Alliance, and the Indiana DOT. PoreShield is nontoxic and 
provides long-lasting concrete protection while replacing 
traditional sealants and eliminating reliance on harmful 
solvents. My Indiana counterparts recently highlighted this 
award-winning product at the UN Climate Change Conference in 
Scotland.
    As we continue to look at new markets, uses, and soybean 
research, I wanted to highlight the unique relationship between 
land-grant institutions and check-off investments in driving 
innovation. In one success story, the University of Missouri 
and USDA Agricultural Research Service are joint owners of the 
patent for SOYLEIC and MSMC is the exclusive licensee. SOYLEIC 
is a non-GMO, high oleic seed trait that can be incorporated in 
today's soybean varieties, resulting in high oleic oil and 
meal. These products demonstrate that we are off to a great 
start; however, the Federal Government needs to invest further 
for the renewable economy to truly take off.
    First, Congress can urge EPA to fulfill its statutory 
authorities under the Renewable Fuel Standard to support 
American grown soy-based biofuels. Failure to release annual--
--
    The Chairman. Mr. Wheeler, I am sorry. If you could wrap it 
up in the next couple seconds, that would be helpful.
    Mr. Wheeler. Under the RFS created uncertainty in the 
biofuel markets, and this inaction continues to stymie the 
growth.
    The nation's 500,000 soybean farmers are unified in their 
effort to grow market opportunities. By providing the best raw 
materials to create sustainable, biobased products, we stand 
ready to work with this Committee, Congress, and the Biden 
Administration to help grow the bioeconomy, great jobs, and 
enhance American sustainability.
    I look forward to answering your questions and continuing 
this important discussion on the renewable economy. Thank you.
    [The prepared statement of Mr. Wheeler follows:]

   Prepared Statement of Gary Wheeler, Executive Director and Chief 
   Executive Officer, Missouri Soybean Association, Missouri Soybean 
  Merchandising Council, and Foundation for Soy Innovation, Jefferson 
          City, MO; on Behalf of American Soybean Association
Introduction
    Chairman Delgado, Ranking Member Fischbach, and Members of the 
House Committee on Agriculture Subcommittee on Commodity Exchanges, 
Energy, and Credit, it is an honor to testify before you on the impact 
of the bioeconomy in rural America and what it means for America's soy 
farmers. My name is Gary Wheeler, Executive Director and CEO of the 
Missouri Soybean Association (MSA), Missouri Soybean Merchandising 
Council (MSMC), and Foundation for Soy Innovation (FSI).
    MSA is a statewide membership organization designed to increase the 
profitability of Missouri soybean farmers through legislative advocacy, 
public policy initiatives, and education efforts across the state. MSMC 
is a farmer-run organization dedicated to improving the profitability 
of the Missouri soybean farmer through a combination of marketing, 
research, and commercialization programs. FSI builds strategic 
partnerships and leverages resources throughout the soy value chain to 
advance innovation and grow demand through partnership and scholarship.
    The Missouri soy organizations are affiliates of either the 
American Soybean Association (ASA), which represents America's 500,000 
\1\ soybean farmers on domestic and international policy issues 
important to the soybean industry, or the United Soybean Board (USB), 
which invests check-off funds in programs and activities that advance 
soybean marketing, production, technology, and the development of new 
uses. MSA, MSMC, FSI, ASA, and USB are all farmer-led organizations.
---------------------------------------------------------------------------
    \1\ USDA National Agricultural Statistics Service.
---------------------------------------------------------------------------
    America's soybean growers play an essential and growing role in the 
bioeconomy. It may be obvious to the Members of this Committee that 
America's abundant supply of soybeans helps feed America and the world. 
However, it is likely less known that U.S. companies now also offer 
approximately 1,000 soy biobased products made with ingredients grown 
on American family farms--thanks to the versatile chemical composition 
of soybeans.
    When processed, soybeans are divided into protein and oil. Soybean 
protein (approximately 80% of the bean) is primarily used in plant-
based foods like tofu and livestock animal feed, but it is also an 
ingredient in plastic composites, synthetic fiber, paper coatings, 
adhesives, and more. Soybean oil (the remaining 20%) is one of the most 
versatile natural oils; its molecular structure and suitable fatty-acid 
profile can be used in many applications, including biodiesel.
    Bioproducts made with soy protein and oil are sustainable. Unlike 
fossil fuel-based feedstocks, soybeans capture carbon dioxide from the 
atmosphere. They also fix their own nitrogen for energy, limiting 
chemical-based fertilizer applications. In addition, most soybean 
acreage in the U.S. uses conservation tillage, which disturbs less 
soil, reduces fuel use, and helps sequester carbon on cropland. End-
users continue to increase demand for sustainably produced products, 
and soy growers are ready to help deliver manufactured products with 
environmental benefits that include lower greenhouse gas emissions, 
reduced energy costs, lower volatile organic compounds (VOCs), reduced 
exposure to toxic chemicals by workers, credits toward LEED 
certification of certain finished products, and reduced processing 
costs and environmental compliance fees.
    There are also economic advantages to using soy in manufacturing 
and producing consumer goods. Soybeans are renewable and abundant--this 
year soy growers are harvesting an immense crop of 4.4 billion 
bushels--which has enabled soy ingredients to maintain an historic 
price advantage over petrochemical equivalents and has helped reduce 
America's dependence on foreign oil. Soy-based bioproducts also create 
jobs. Released in 2021, USDA's most recent report on the economic 
impact of the U.S. biobased products industry found that American-made 
biobased products added $470 billion and more than 4.6 million direct 
and indirect jobs to the U.S. economy.\2\
---------------------------------------------------------------------------
    \2\ Daystar, J., Handfeld, R.B., Pascual-Gonzalez, J., McConnell, 
E. and J.S. Golden (2020). An Economic Impact Analysis of the U.S. 
Biobased Products Industry: 2019 Update. Volume IV. A Joint Publication 
of the Supply Chain Resource Cooperative at North Carolina State 
University and the College of Engineering and Technology at East 
Carolina University.
---------------------------------------------------------------------------
    Across America, cities, communities, companies, and government 
agencies are transitioning to plant-based products, limiting reliance 
on petroleum-based products while reducing greenhouse gas emissions. 
The increased production of biobased products to meet this demand 
contributes to the development and expansion of the U.S. bioeconomy, 
where society looks to agriculture for sustainable sources of fuel, 
energy, chemicals, and products.
Biobased Soy Products
    Through the soybean check-off, U.S. soybean organizations are 
partnering with major companies and universities to create new rapidly 
renewable materials made with soy. It would be impossible to walk 
through the many biobased soy products on the record today, but I am 
pleased to use this hearing as an opportunity to highlight several soy 
biobased success stories and outline opportunities that this Committee 
and the Biden Administration have to further strengthen the bioeconomy.
    In Missouri, we collaborated with the Cole County sheriff's 
department to demonstrate that Goodyear soy tires perform so well that 
they meet the demands of law enforcement. The Goodyear Tire & Rubber 
Company discovered that soybean oil mixes more readily with rubber 
compounds than other oils and reduces energy consumption, which 
improves tire manufacturing efficiency. Because of this achievement, 
Goodyear received the prestigious Tire Technology International Award 
for Innovation and Excellence in the ``Environmental Achievement of the 
Year'' category at the 2018 Tire Technology Expo. Incidentally, this 
same soy-based technology is now also delivering grip, stability, and 
durability in Skechers brand running shoes for men, women, and children 
thanks to a collaboration with Goodyear.
    Goodyear's 2020 use of soybean oil increased 73% over 2018 usage, 
and this year the company announced a new sustainable soybean oil 
procurement policy and a commitment to phasing out petroleum-derived 
oils from its products by 2040, using soybean oil in its place.
    Another exciting opportunity for highways, buildings, and more is 
PoreShieldTM, a revolutionary soy-based concrete protector 
that is the result of a partnership between Perdue University, Indiana 
Department of Transportation, and the Indiana Soybean Alliance. In 
addition to providing long-lasting concrete protection, 
PoreShieldTM prevents pollution by replacing traditional, 
toxic concrete protectors and sealants, reducing VOCs by 90%, and 
eliminating the need for harmful solvents. As a nontoxic product, 
PoreShieldTM is safe for the environment and workers and 
requires no personal protective equipment while applying. The product 
received the 2021 Indiana Department of Environmental Management 
Governor's Award for Environmental Excellence, and it also drew the 
attention of the U.S. Department of Agriculture, which invited Indiana 
soybean growers to highlight PoreShieldTM at the U.N. 
Climate Change Conference (COP26) this month (Nov. 2021).
    According to the Federal Highway Administration, there are more 
than 4 million miles of paved roads in the U.S. On average, 400 bushels 
of soybeans are used for every two-lane mile receiving a full surface 
PoreShieldTM treatment. Using soy in such sustainable road 
construction and maintenance presents countless opportunities to 
support U.S. soybean farmers and boost local economies.
    Soy has also demonstrated success in construction and paving by 
winning the American Chemical Society (ACS) 2021 Cooperative Research 
Award in Polymer Science and Engineering for ``putting soy-based 
thermoplastics to work in the construction industry.'' The United 
Soybean Board and the Iowa Soybean Association contributed to research 
on a soy oil polymer that can replace petroleum-based polymers in 
asphalt paving. The cost-effective asphalt biobased polymer debuted in 
2019, and it has been demonstrated in multiple municipalities and 
tested in 30 states. The soy-based polymer improves performance even 
while it promotes environmental stewardship--not only because it's 
biobased, but also because it allows for more recycled asphalt content. 
Importantly, soy-based polymer is cost competitive with asphalt paving 
materials that depend on foreign oil instead of U.S.-grown soybeans.
    To highlight an exciting bioproduct currently in development, MSMC 
is partnering with Dr. Ram Gupta of the Kansas Polymer Research Center 
at Pittsburg State University to develop biodegradable, soy-based, 
high-performance golf balls. In general, golf balls are made of three 
layers: core, inner layer, and outer layer. We plan to use soybean-
based composites for the core and soybean oil-based polyurethane 
coating as the outer layer. Golf is played by more than 60 million 
people around the world. In the United States alone, over 24 million 
people enjoy playing the game, including more than 8,000 professional 
players. More than 850 million golf balls are produced every year to 
fulfill that demand, but many are lost on the course or in the water 
and are never recovered, permanently cluttering natural areas. 
Utilizing soybean materials to serve this $550 million market will 
support agriculture and make the game of golf more eco-friendly, or 
what I like to call staying green on the green!
    It's critical that we continue to push the envelope when it comes 
to new market uses and soybean research. The unique relationships 
between land-grant universities and check-off investments drive 
innovative technologies and traits that become industry standard. In 
one successful public-private partnership, the Curators of the 
University of Missouri and the USDA Agricultural Research Service are 
joint owners of the patent for SOYLEIC', and MSMC is the 
exclusive licensee. The patented process is the product of a 
partnership between the University of Missouri, USDA, MSMC, and USB.
    SOYLEIC' is a non-GMO, high-oleic seed trait that can be 
incorporated into today's soybean varieties, resulting in high oleic 
oil and meal. High oleic soybeans can be used in high-performing 
industrial applications. They also lack trans fats and have an extended 
shelf life, and the oil is more stable in baking and frying, helping 
create nutritious food for humans and feed for animal diets.
    This type of public-private partnership is key to the success of 
growing a renewable rural America. The demand for high oleic soybeans 
is growing significantly, creating diversified and value-added options 
for farmers and opportunities for downstream customers in the U.S. and 
abroad. Proceeds from the sale of soybean varieties developed through 
the research program are then reinvested into soybean research--and 
growing demand and preference for U.S. soy around the world.
Soy-Based Biofuels
    When talking about the benefits of soy-based bioproducts, perhaps 
there is no better example than soy-based biofuels. Biodiesel, 
renewable diesel, and sustainable aviation fuel are made from a variety 
of readily available feedstocks, including soybean oil. After the Food 
and Drug Administration started regulating trans fats in 2006, the 
demand for soy oil for food dropped significantly. Around the same 
time, we were developing new cooking oil options like high-oleic, 
soybean growers and others also worked to promote commercial production 
of biodiesel made from soybean oil--a biobased product that supports 
farmers and rural communities and diversifies our fuel supply while 
reducing emissions.
    The growth of the biodiesel industry, and more recently the 
renewable hydrocarbon diesel industry, has been spurred by strong 
Federal and state-level policies that promote cleaner, lower-carbon 
energy sources, including the Renewable Fuel Standard. Biodiesel offers 
lower emissions solutions in the transportation and heating sectors, 
among others. With just under half of the homes in the northeast still 
reliant on home heating oil in the colder months, biodiesel blended 
into ``Bioheat''' offers a lower-carbon alternative that 
meets state low-carbon standards while sparing homeowners from 
retrofitting their home heating systems. Looking toward the 
transportation sector, as the Administration seeks to move toward an 
electric vehicle-focused approach to lowering GHG emissions, biodiesel 
and renewable diesel can offer GHG emissions reductions of at least 50% 
compared to petroleum diesel in aging vehicles that still require 
liquid fuel and in heavy-duty vehicles that are more difficult to 
electrify.
    Of note, government and corporate entities around the country are 
already utilizing biodiesel as an opportunity to achieve lower 
emissions. For example, New York City requires all 11,000 city fleet 
vehicles to use biodiesel--from vehicles used by the police and fire 
departments to those used by the department of sanitation and other 
off-road city equipment vehicles. New York City also uses 
Bioheat' to heat municipal and private buildings across the 
city. Other cities like Washington, D.C. are also transitioning their 
fleets to biodiesel. In 2018, D.C. used 120,000 gallons of biodiesel in 
its vehicle fleet, which resulted in 1,000 fewer tons of GHG emissions. 
Last year, the D.C. Department of Public Works announced it would begin 
running 17 garbage trucks on B100, or 100% biodiesel--an 86% GHG 
emissions reduction from a traditional petroleum-fueled garbage truck. 
The results are so clear that the city plans to double the size of its 
B100 vehicles in the next year. Through funds granted by EPA's Diesel 
Emissions Reduction Act program, D.C. Water Authority is expanding its 
use of B100 to 31 vehicles where it also benefits worker health. Soy 
farmers are proud of the success of biodiesel not only for the new 
market opportunities the fuel created for us, but also for being able 
to grow a clean energy solution right in our fields. Many of us use 
biodiesel in our own farming equipment.
Center for Soy Innovation
    In Missouri, our own organization is setting an example by using 
these products. Our new Center for Soy Innovation in Jefferson City, 
Missouri, opened in March 2020 as a collaboration between MSMC, MSA, 
FSI, and other partners. The center showcases soy-based building 
materials and demonstrates new uses for soybeans, and it serves as a 
hub for biobased business development and incubation. Our living, 
hands-on displays illustrate the decades of research made possible by 
American soybean farmers and our industry partners, who continue to 
find new and innovative uses for soy. Some of the soy-based products on 
display include:

   Biodiesel, which powers the center's furnace.

   Columbia Forest Products' PureBond' plywood. The 
        soy flour-based PureBond' adhesive won an EPA Green 
        Chemistry Award and represents the first cost-competitive, 
        environmentally friendly adhesive that replaced toxic urea-
        formaldehyde (UF) resin.

   Huntsman's Building Solutions's Heatlok' soy 
        spray foam insulation. A high-performing versatile spray foam 
        made with 14% renewable soybean oil and recycled plastics. 
        Heatlock' is used in a wide variety of applications, 
        including insulating the underside of bridges and tunnels. It 
        can provide strength to structures and reduce water seepage and 
        damage from freezing and thawing.

   Sherwin Williams paint, which received an EPA Presidential 
        Green Chemistry Challenge Award in 2010 for its breakthrough 
        paint formulation that uses both soybean oil and recycled 
        plastic bottles. This technology eliminates use of thousands of 
        barrels of oil and hundreds of thousands of VOCs.

   Signature Flooring high-performance carpet with soy backing, 
        which offers a durable solution for commercial, high-traffic 
        installations, has excellent moisture resistant properties and 
        emits low VOC levels for improved indoor air quality. The 
        Pentagon installed similar door mats in 2010 and continues to 
        use them as a durable, cost-effective solution to help reduce 
        the environmental footprint of the world's largest (and heavily 
        trafficked) office building.

   SYNLawn' artificial turf, which uses soybean oil 
        to displace 60% of the petroleum in its backing. This same turf 
        is installed at Kennedy Space Center's Visitor Complex in the 
        rocket launch viewing area and in more than 200,000 other 
        installations in the U.S. plus 19 other countries. The 
        SYNLawn' company is adding 10% more soy to its 
        products in 2021 and will start using sugarcane and other 
        agricultural products as well.

   Cargill's Anova, a biobased asphalt rejuvenator, is featured 
        in our parking lot. This product offers an important benefit, 
        as it allows for increased use of recycled asphalt.

    The Center for Soy Innovation was a $4 million investment in the 
Jefferson City community, bringing capital, jobs, and visitors to the 
region. There is no other facility like it, aggregating a soy education 
center, conference space, and research facility all under one roof. I 
invite all the Members of this Committee to visit the center for an up-
close look at the soy biobased industry in action.
How can the government support biobased?
Biofuels Policy
    The Federal Government is in a unique position to support and 
promote biobased products and the bioeconomy through policy and 
purchasing power. Since 2005, the Federal Government has supported 
growth in the biofuels sector through the Renewable Fuel Standard 
(RFS). The RFS, paired with other supports like USDA's Higher Blends 
Infrastructure Incentive Program, increases access to and demand for 
biofuels across the country. Unfortunately, over the past several 
years, EPA has failed to release annual Renewable Volume Obligations 
(RVOs) under the RFS in a timely manner. Failure to update these volume 
obligations has created uncertainty in the biofuels market, which 
directly impacts biofuel producers and has a negative downstream effect 
on growers. To date, the Administration has yet to fulfill its 
statutory requirement to release its 2021 or 2022 RVO under the RFS. 
Without action on RVOs, the Administration is missing a prime 
opportunity to promote lower-carbon fuel options for consumers and 
continues to stymie biofuels industry growth due to a lack of certainty 
in Federal support.
Federal Procurement and Coding
    Beyond biofuels policy, the Federal Government has a unique 
opportunity to support the bioeconomy through its purchasing power. The 
U.S. Government is the single largest consumer in the world, purchasing 
more than $550 billion in goods and services each year. Through the 
2002 Farm Bill and subsequent farm bills, Federal purchasing 
requirements for biobased products have been mandated and expanded. 
This requirement in the Federal Acquisition Regulation, supported by 
the USDA BioPreferred program, spurs growth in the biobased sector 
while creating new markets for soybean growers. Since 2002, ASA has 
supported farm bill provisions that created and enhanced the Federal 
BioPreferred Program at USDA. ASA has encouraged USDA to actively 
promote the use of biobased products to Federal agencies and other 
buyers.
    Because someone develops a better product by using biobased 
content, it unfortunately does not mean that product has a guaranteed 
buyer. Federal agencies have a huge opportunity to drive demand for 
these products by doing what the farm bill promotes, which is to buy 
biobased products that are designated by USDA's BioPreferred Program.
    Much like the USDA BioPreferred program, the North American 
Industry Classification System (NAICS)--the standard used by Federal 
statistical agencies in classifying businesses for the purpose of 
collecting and publishing statistical data about the U.S. economy--can 
be a tool to help spur growth in the biobased products space. NAICS is 
used domestically for various contracting and tax purposes, like state 
governments offering tax incentives for specific NAICS-coded 
industries. NAICS is also used by several Federal agencies for 
procurement programs, requiring a NAICS code be provided for each good 
or service procured. Unfortunately, NAICS does not currently include 
codes for biobased products manufacturers.
    Through the 2018 Farm Bill, Congress issued a statutory directive 
to the Department of Commerce to develop a NAICS code specifically for 
biobased products manufacturers in coordination with USDA. Since that 
time, all annual revisions of NAICS codes have excluded biobased 
products. Without a NAICS code, many biobased products manufacturers 
get buried in other product classification codes that do not properly 
identify their products (e.g., plastic, chemicals, packaging, etc.). 
Without these dedicated codes, data collection, statistical reporting, 
and consumer trend tracking are nearly impossible, thus hampering 
growth in the bioeconomy. ASA has urged the Office of Management and 
Budget, through its annual NAICS revision process, to heed Congress' 
directive to include a specific code for biobased products.
Research and Community Development
    Aside from Federal procurement and coding, the government's support 
of research and community development can advance the renewable economy 
in America.
    Federal support of land-grant universities and extension services 
is especially critical, and soy growers support increasing funding for 
these rural fixtures. These institutions are responsible for educating 
the next generation of farmers, ranchers, and citizens; through public-
private partnerships--such as the collaboration that created 
SOYLEIC'--they provide the foundation for America's 
leadership in research and development; and by fostering innovation and 
entrepreneurship, they boost communities and economies.
    Another exciting new development is the inclusion of a pilot 
program in the bipartisan infrastructure bill to study the 
environmental benefits of biobased construction materials and consumer 
goods. As mentioned earlier, soybean farmers have long supported the 
development of a wide variety of biobased products and are hoping that 
this pilot program will provide another opportunity to highlight the 
benefit of these products--especially soy-based construction materials, 
which have proven success in projects administered by state departments 
of transportation but have yet to be utilized by the U.S. Department of 
Transportation (DOT).
    Furthermore, USDA, DOT, Department of Defense, and other agencies 
can use their programs to promote use of biobased products across the 
nation through their partnerships with states and local communities. 
There will never be a robust bioeconomy without leadership that 
literally paves the way for others to see that biobased products 
perform as well as--or better than--alternatives. It is essential that 
Federal agencies incorporate biobased products throughout their 
programming.
    Last, we are grateful that funding from USDA Rural Development 
contributed to the construction of our Center for Soy Innovation. Rural 
development programs can drive community demand for biobased products 
during the USDA-supported construction of local buildings and 
infrastructure projects. Rural communities would benefit through 
increased demand for biobased products using the very same products 
grown in local farmers' fields, while at the same time contributing to 
the sustainability of USDA-supported facilities.
Conclusion
    Chairman Delgado, Ranking Member Fischbach, and Members of the 
Subcommittee, thank you again for the opportunity to testify on the 
importance of biobased products and the significant contributions of 
America's soybean farmers to the bioeconomy. The nation's 500,000 
soybean farmers are unified in their effort to grow market 
opportunities by providing the best raw materials to create 
sustainable, biobased products. U.S. soy farmers are leaders when it 
comes to using leading-edge technologies and best management practices 
to increase economic and environmental sustainability, and I am 
grateful for the opportunity to represent my peers in the soy industry 
here today.
    The soy industry stands ready to work with the Committee and 
Subcommittee, Congress, and the Biden Administration to help grow the 
bioeconomy, create jobs, and enhance American sustainability.
    Thank you.

    The Chairman. Thank you, Mr. Wheeler.
    Ms. Bowman, please begin when you are ready.


 STATEMENT OF JESSICA BOWMAN, EXECUTIVE DIRECTOR, PLANT BASED 
               PRODUCTS COUNCIL, WASHINGTON, D.C.

    Ms. Bowman. Good morning, Chairman Delgado, Ranking Member 
Fischbach, and Members of the Subcommittee. I am Jessica 
Bowman, Executive Director of the Plant Based Products Council. 
Thank you for the opportunity to talk with you today about 
plant-based products and the role that they can play in a 
renewable economy in rural America.
    So, with plant-based products, we can use a variety of 
feedstocks, from corn, to soy, to hemp, even agricultural waste 
materials, to make many of the products that we use every day, 
plastics, textiles, personal care products, building materials, 
and more. The vast majority of these products are recyclable or 
compostable at their end-of-life.
    Plant-based products present an immense economic 
opportunity for rural America. A recent report from USDA showed 
that this industry grew 27 percent from 2013 to 2017, bringing 
$470 billion in value to the U.S. economy, and supporting 4.6 
million American jobs. These are often high-paying quality STEM 
jobs like chemists, engineers, and accountants. But the overall 
U.S. bioeconomy accounts for less than 2\1/2\ percent of the 
U.S. economy, so we are really just scratching the surface 
here.
    This industry also represents the future of American 
agriculture's role in providing innovations and solutions that 
can reduce greenhouse gas emissions, and also move us to a more 
circular bioeconomy where we are minimizing waste, using more 
renewable resources, and keeping those resources in use longer. 
USDA estimates that plant-based products have the potential to 
reduce greenhouse gas emissions by 12.7 million metric tons of 
CO2 equivalence per year.
    To support growth of the circular bioeconomy and the plant-
based products industry, there are a few ways that Congress can 
help. One is to make the plant-based products industry more 
visible through better data. One critical action that is needed 
and was actually included in the 2018 Farm Bill is the 
establishment of North American Industry Classification codes, 
or NAICS codes, for biobased product manufacturing. These codes 
are really key to the future success of this industry, because 
they allow for effective and accurate tracking and analysis of 
the economic activity and growth of the industry. So, we urge 
Congress to call for the Administration to fulfill the 2018 
Farm Bill mandate.
    It is also critical to make sure that the data regulators 
are using to assess plant-based products is based on best 
available science and modeling. Another opportunity is to 
modernize USDA's BioPreferred Program. The program has had a 
lot of success in its history, but we believe there is the 
potential to do much more. We think this program could gain 
household name recognition, much like EPA's EnergyStar program, 
but it has a fraction of the budget so it is really hampered in 
being able to fulfill that potential.
    And finally, helping communities develop essential end-of-
life infrastructure. It is important for all products to have 
the end-of-life infrastructure that supports a circular path, 
but one significant opportunity that can really help tackle our 
waste management challenges while also generating quality local 
jobs is in expanding composting infrastructure. I mentioned 
that many plant-based products are compostable. They are 
compostable in industrial composting facilities. So, when those 
products are used in a food contact application like packaging, 
they present an opportunity to divert substantial food waste to 
composting so it is not contaminating the recycling stream, or 
going to a landfill where it contributes to significant 
landfill methane emissions.
    So, the COMPOST Act (H.R. 4443, Cultivating Organic Matter 
through the Promotion Of Sustainable Techniques Act), which 
Congresswoman Julia Brownley introduced in the House in July, 
represents an example of how the Federal Government could 
provide financial resources to help local communities, NGOs, 
nonprofits and the private-sector to build out composting 
infrastructure systems that meet their community needs. So, we 
are eager to work with the Committee on the best way to achieve 
that goal.
    I wanted to close by highlighting one of our member 
companies, Green Dot BioPlastics. This is a Kansas-based 
company. They are using plant-based feedstocks that are grown 
by American farmers to make more sustainable bioplastics that 
are used in everything from toys to car parts. And in rural 
Kansas, their employees are making two to three times the 
average salary in their community, and they are helping their 
customers re-shore jobs back to the U.S. That reduces 
production time, cost, and environmental impacts. So, with 
Congress's support, the plant-based products industry can bring 
a new generation of innovation and jobs to rural America.
    Thank you, and I look forward to your questions.
    [The prepared statement of Ms. Bowman follows:]

 Prepared Statement of Jessica Bowman, Executive Director, Plant Based 
                   Products Council, Washington, D.C.
    Good morning, Chairman Delgado, Ranking Member Fischbach, and 
Members of the Subcommittee. My name is Jessica Bowman, and I serve as 
Executive Director of the Plant Based Products Council or PBPC. PBPC is 
an association representing a broad range of companies who support 
greater adoption of products and materials made from renewable, plant-
based inputs.
    Thank you for the opportunity to appear before you to discuss the 
renewable economy in rural America.
    With plant-based products, we use a wide variety of feedstocks, 
from corn to soy to hemp, even agricultural waste materials, to make 
many products that consumers and industry rely on every day. Plant-
based chemicals and materials are used to make plastic packaging, 
textiles, personal care products, building materials, and more, the 
vast majority of which are recyclable or compostable.
    Plant-based products present an immense economic opportunity for 
rural America. A recent report from USDA showed this industry grew over 
27% between 2013 and 2017, bringing $470 billion in value to the U.S. 
economy and supporting 4.6 million American jobs with annual wages of 
up to $96,000. These jobs are diverse, and many are STEM-based like 
chemists, engineers, and accountants. But the overall U.S. bioeconomy 
accounts for less than 2.5% of American economic activity, so we are 
only scratching the surface.
    The plant-based products industry represents the future of American 
agriculture's role in providing technology, innovations, and solutions 
that help reduce greenhouse gas emissions and move the U.S. to a more 
circular bioeconomy where we are minimizing waste, using more renewable 
resources, and keeping those resources in use longer. USDA estimates 
that plant-based products have the potential to reduce greenhouse gas 
emissions by an estimated 12.7 million metric tons of CO2 
equivalents per year. That's equal to taking over 2.7 million cars off 
the road for a year.
    To support growth of the circular bioeconomy, including the plant-
based products industry, Congress can help in several ways:
1. Make the plant-based products industry more visible through better 
        data.
   One critical action that is needed, and in fact was mandated 
        in the 2018 Farm Bill, is the establishment of North American 
        Industry Classification System (NAICS) codes for biobased 
        product manufacturing. Such codes are key to the future success 
        of the industry because they allow for accurate and effective 
        tracking and analysis of the economic activity and growth of 
        the industry. We urge Congress to call for the Administration 
        to fulfill the 2018 Farm Bill mandate.

   It is also critical to ensure that data used by regulators 
        to assess plant-based products is based on best available 
        science and modeling.
2. Modernize USDA's BioPreferred Program.
   USDA's BioPreferred Program has several successes in its 
        history, and we believe the program could do a great deal more. 
        We think this program has the potential to gain household name 
        recognition like EPA's Energy Star program, but with a fraction 
        of the budget, BioPreferred is extremely hampered in fulfilling 
        its potential.
3. Help communities develop essential end-of-life infrastructure.
   It is important to provide the end-of-life infrastructure 
        that supports a circular path for all products. One significant 
        opportunity that can help tackle our waste management 
        challenges while generating quality local jobs lies in the 
        expansion of composting infrastructure. Many plant-based 
        products are compostable in industrial composting facilities. 
        When used in food contact applications, these materials present 
        an opportunity to divert substantial food waste to composting, 
        avoiding food waste contamination in the recycling system, and 
        significantly reducing landfill methane emissions. The COMPOST 
        Act (H.R. 4443), which Congresswoman Julia Brownley introduced 
        in the House in July, represents an example of how the Federal 
        Government can provide financial resources to help local 
        governments, nonprofits, and the private-sector build 
        composting systems that meet their community needs. We are 
        eager to work with the Committee on the best way to achieve 
        this goal.

    Renewable and biobased products offer new rural development 
opportunities. I'll close by highlighting one of our member companies, 
Green Dot Bioplastics. This Kansas-based company is using plant-based 
feedstocks grown by American farmers to make more sustainable 
bioplastics used in everything from toys to car parts. In rural Kansas, 
their employees make 2-3 times the average salary in their community, 
and they are helping their customers re-shore jobs back to the U.S., 
moving their manufacturing facilities down the road instead of across 
the ocean. This reduces production time, costs, and environmental 
impacts. With Congress's support, the plant-based products industry can 
bring a new generation of innovation and jobs to rural America.
                              Attachments
[Fact Sheet]
PBPC Advocacy Agenda Brief
    Who We Are: The Plant Based Products Council (PBPC) includes 
businesses, small and large, from all links in the plant-based products 
supply chain. PBPC is working to grow the circular bioeconomy by 
encouraging greater use of plant-based materials in products and 
packaging, along with supporting infrastructure to ensure these 
materials can be composted, recycled, or otherwise repurposed.

    Plant-based products made from renewable resources present an 
opportunity to:

   Respond to increased consumer demand for more sustainable 
        products and packaging

   Address a number of environmental challenges, including 
        climate change and our growing waste management crisis

   Help bring quality manufacturing jobs to rural America

    To support growth of the circular bioeconomy, including the plant-
based products industry, Congress can help incentivize the manufacture 
and use of plant-based products, spur job creation, support expansion 
of end-of-life infrastructure, foster workforce development, and fund 
needed research and development.
117th Congress Advocacy Agenda
USDA Research
    Economic studies

   An apples-to-apples comparison of the U.S. bioeconomy's size 
        and scope, including direct/indirect jobs and average wages, 
        economic output, tax payment contributions, and investment, 
        with other major economic regions.

   An assessment of how investment in rural America to expand 
        plant-based product production could affect local and state 
        economies as well as the need for worker training, 
        infrastructure, and other public services.

    Environmental studies

   A projection of the total greenhouse gas emissions that 
        could be avoided if food waste and compostable packaging is 
        diverted from landfills to composting facilities.

   A synthesis of existing life cycle analyses for key biobased 
        products (e.g., common bioplastic resins, molded fiber, 
        biobased textiles) to show the current environmental impact 
        data in various categories.
Bioproduct Recognition
   Establishment of North American Industry Classification 
        (NAICS) codes for biobased products to allow for effective 
        measurement of this growing industry.

   Ensure appropriate consideration of biobased plastics in 
        plastics-focused legislation and other policy efforts.
Infrastructure
   Authorization of a composting infrastructure loan/grant 
        program at USDA to support the development of economically 
        viable composting facilities.
Tax Incentives
   Establish tax incentives to support the manufacture and 
        market expansion of plant-based products.
Appropriations
   Increase appropriations to USDA's BioPreferred Program to 
        support broader growth and public awareness of the program.

   Increase appropriations to the full authorized level of 
        funding ($25M/year) for grants under the Urban Agriculture & 
        Innovation Production Program established in the 2018 Farm 
        Bill.

   Support appropriations through programs such as USDA's 
        National Institute of Food and Agriculture or the National 
        Science Foundation to increase research, education and training 
        in plant-based products manufacturing, engineering, and 
        agronomy.

          For more information, contact Robin Bowen, PBPC Vice 
        President of External Affairs, at [email protected]
[Comment Letter]
  Organizations: Plant Based Products Council (PBPC), Corn Refiners 
    Association (CRA), American Soybean Association (ASA), National 
    Corn Growers Association (NCGA), Plastics Industry Association 
    (PLASTICS), Alternative Fuels and Chemicals Coalition (AFCC), Ag 
    Energy Coalition (AgEC)
  Date: August 16, 2021
  Subject: NAICS Updates for 2022
  FR Reference: Federal Register/Vol. 86, No. 125/Friday, July 2, 2021/
    Notices
  Docket Number: USBC-2021-0004

    The undersigned organizations appreciate the opportunity to provide 
input in response to the Office of Management and Budget's (OMB) July 
2, 2021 solicitation for comments on the Economic Classification Policy 
Committee's (ECPC) recommendations for the 2022 revision of the North 
American Industry Classification System (NAICS); update of Statistical 
Policy Directive No. 8, Standard Industrial Classification of 
Establishments; and elimination of Statistical Policy Directive No. 9, 
Standard Industrial Classification of Enterprises.
    We disagree with the conclusion of the ECPC that a NAICS code for 
renewable chemicals manufacturers and biobased products manufacturers 
is not warranted and respectfully request OMB implement the statutory 
directive in the 2018 Farm Bill \1\ immediately.
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    \1\ Pub. L. No. 115-334, H.R. 2, the Agriculture Improvement Act of 
2018. 115th Congress.  9002(f)(1). https://www.congress.gov/bill/
115th-congress/house-bill/2.
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The Bioeconomy and Biobased Products
    USDA defines bioeconomy as ``[t]he global industrial transition of 
sustainably utilizing renewable aquatic and terrestrial resources in 
energy, intermediates, and final products for economic, environmental, 
social, and national security benefits.'' \2\ According to USDA, the 
U.S. biobased products industry expanded more than 27% in terms of 
value added between 2013 and 2017, contributing roughly $470 billion of 
value to the U.S. economy. In 2017, the U.S. biobased products industry 
supported 4.6 million direct and indirect jobs,\3\ an increase of 
580,000 jobs from 2013. In terms of environmental benefits, the 
biobased products industry displaces about 9.4 million barrels of oil 
through replacing traditional products, as well as the potential to 
reduce greenhouse gas emissions by 12.7 million metric tons of carbon 
dioxide equivalents per year.
---------------------------------------------------------------------------
    \2\ Golden, Jay S. et. al. An Economic Impact Analysis of the U.S. 
Biobased Products Industry: A Report to the Congress of the United 
States of America (2015) pp. 201-209, https://www.researchgate.net/
publication/280979090_An_Economic_Impact_Analysis_of_the_US_Bio
based_Products_Industry_A_Report_to_the_Congress_of_the_United_States_of
_America.
    \3\ Daystar, Jesse et. al. An Economic Impact Analysis of the U.S. 
Biobased Products Industry: 2019 Update. United States Department of 
Agriculture BioPreferred' Program (2019) pp. 6-7. https://
www.rd.usda.gov/sites/default/files/
usda_rd_economic_impact_analysis_us_bio
based_products_industry.pdf.
---------------------------------------------------------------------------
    Biobased products derived from renewable agricultural commodities 
are an important part of the U.S. and global bioeconomy. Biobased 
products span a diverse array of product categories including renewable 
chemicals, cleaning supplies, packaging, furniture, and clothing. 
Globally, the biochemicals market alone is expected to grow from $6.5 
billion in 2016 to $23.9 billion by 2025.\4\
---------------------------------------------------------------------------
    \4\ Guo, Mingxin and Song, Weiping. The Growing U.S. Bioeconomy: 
Drivers, Development, and Constraints. New Biotechnology (2019) p. 54. 
https://doi.org/10.1016/j.nbt.2018.08.005.
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Importance of NAICS Codes to the Bioeconomy
    Distinct NAICS codes for manufacturers of renewable chemicals and 
biobased products are key to the future success of these biobased 
industries. Stakeholders across the U.S. economy, including industry, 
academia, research, and government agencies, struggle to track and 
analyze the economic activity and growth of the bioeconomy as a whole 
as well as biobased product segments due to the absence of distinct 
NAICS codes. Several academic researchers and economists, in attempting 
to measure the bioeconomy, repeatedly highlighted that the present 
NAICS system ``does not provide an effective means of tracking the 
economic and job implications of the biobased products sector in the 
United States.'' \5\ Academic researchers and economists expressly join 
industry groups calling for unique NAICS codes to improve measurement 
and economic contributions of the bioeconomy.\6\ Below are a few 
examples of these sentiments:
---------------------------------------------------------------------------
    \5\ Golden, J.S., Handfield, R.B., Daystar, J. and, T.E. McConnell. 
An Economic Impact Analysis of the U.S. Biobased Products Industry A 
Report to the Congress of the United States of America. U.S. Department 
of Agriculture (2015) p. 83.
    \6\ Golden, J.S., Handfield, R.B., Daystar, J., and McConnell, 
T.E., An Economic Impact Analysis of the U.S. Biobased Products 
Industry. U.S. Department of Agriculture (2016) p. 13.

   USDA. An Economic Impact Analysis of the U.S. Biobased 
---------------------------------------------------------------------------
        Products Industry (2015):

     ``NAICS does not provide an effective means of 
            tracking the economic and job implications of the biobased 
            products sector in the United States. This results from a 
            lack of industry-specific codes that were representative of 
            the biobased products sectors of the economy. Many 
            economists and industry groups recommended that NAICS codes 
            be developed for biobased products and that reporting 
            requirements be established to allow more effective 
            tracking.'' \7\
---------------------------------------------------------------------------
    \7\ Golden, Jay S. et al. An Economic Impact Analysis of the U.S. 
Biobased Products Industry: A Report to the Congress of the United 
States of America. Industrial Biotechnology 11 (2015). https://
www.researchgate.net/publication/
280979090_An_Economic_Impact_Analysis_of_the_
US_Biobased_Products_Industry_A_Report_to_the_Congress_of_the_United_Sta
tes_of_America.

   Robert Carlson, Estimating the biotech sector's contribution 
        to the US economy (2016): \8\
---------------------------------------------------------------------------
    \8\ Carlson, R. Estimating the biotech sector's contribution to the 
US economy. Nat. Biotechnology 34, 247-255 (2016). https://doi.org/
10.1038/nbt.3491.

     ``Consequently, using the current NAICS to estimate 
            biotech employment is a difficult proposition, because the 
            current codes do not map well onto existing and emerging 
            bioproduction methods. Modernizing the NAICS must be a 
            priority of both the public- and private-sectors to enable 
            accurate economic analyses, employment measurements and 
---------------------------------------------------------------------------
            appropriate marshaling and allocation of resources.''

    Without dedicated NAICS codes, data collection and statistical 
reporting for the rapidly growing bioeconomy are severely hampered. The 
absence of specific industry NAICS codes also masks the growth, market 
developments, and trends in these biobased industries, handicapping 
efforts by policymakers, businesses, investors, and industry 
stakeholders to make well-informed decisions.
    Better data is particularly important to policymakers, which is why 
Congress included a directive on NAICS codes for biobased products in 
the 2018 Farm Bill. Biobased products can contribute to efforts to 
reduce greenhouse gas emissions, particularly methane emissions from 
landfills, as well as improve soil and water quality. President Biden's 
Plan to Build Back Better in Rural America has a specific goal to grow 
the bioeconomy and biobased manufacturing to bring cutting-edge 
manufacturing jobs back to rural communities.\9\ It is clear that 
expanding the biobased products industry is part of the policy and 
economic growth goals of both Congress and the Biden Administration. 
NAICS codes for biobased products are a key tool in helping the 
private- and public-sectors achieve multiple objectives.
---------------------------------------------------------------------------
    \9\ The Biden-Harris Plan to Build Back Better in Rural America. 
https://joebiden.com/rural-plan/.
---------------------------------------------------------------------------
Concerns with the ECPC Recommendation
    Currently, manufacturers of biobased products are by default hidden 
in a smattering of NAICS code product classifications (e.g., plastic, 
chemicals, packaging). In the July 2, 2021, OMB Economic Classification 
Policy Committee (ECPC) response to public comments requesting the 
development of NAICS codes for biobased chemicals and products, the 
ECPC stated that ``based on the data provided in supporting documents 
of the proposal, the current market sizes for manufacturing of 
renewable chemicals and biobased plastic resins are not significant 
enough in the economy to create new NAICS industries. Due to disclosure 
concerns, creating NAICS industries for the manufacture of these 
biobased goods is not recommended at this time.''
    Stakeholders of the biobased products industry have multiple 
concerns with the ECPC recommendation.
    First, the ECPC recommendation ignores the clear legislative 
directive stated in Sec. 9002 of the 2018 Farm Bill, the Agriculture 
Improvement Act of 2018. Sec. 9002 provides that ``[t]he Secretary and 
the Secretary of Commerce shall jointly develop North American Industry 
Classification System codes for--(A) renewable chemicals manufacturers; 
and (B) biobased product manufacturers.'' \10\ This unambiguous 
directive compels USDA and Commerce to jointly develop NAICS codes for 
biobased product manufacturing.
---------------------------------------------------------------------------
    \10\ Agriculture Improvement Act of 2018  9002. https://
www.congress.gov/115/plaws/publ334/PLAW-115publ334.pdf.
---------------------------------------------------------------------------
    Second, available data in fact demonstrate that there is strong 
growth and increased demand for biobased products. Over the past 10 
years, USDA's BioPreferred program has certified more than 4,700 
individual products at 930 companies.\11\ While this is impressive, 
this is only a snapshot of the total amount of biobased products 
available in any number of product categories. Looking to the private-
sector, many companies are making significant investments in biobased 
product manufacturing with an eye toward long-term growth that 
contradict the assertion that the market size and potential for these 
products is small. For example, biotechnology company Danimer 
Scientific announced in March of this year that it plans to invest $700 
million in expanding one of their bioplastic manufacturing plants, 
adding 300 employees, nearly quadrupling their workforce at this 
facility, by 2023.\12\ Another example, Ecoproducts, a brand of one of 
the largest American packaging companies, Novolex, just opened up a new 
product line of biobased compostable cups in June 2021, with plans to 
serve biobased packaging markets in the U.S. and globally.\13\ Many 
bioplastics were sold out for 2021 by midyear. These examples do not 
indicate a small industry struggling to show demand for its products, 
rather this indicates an industry ready to expand further and meet the 
demands of an evolving domestic and global economy in which consumers 
are demanding more sustainable products derived from renewable 
materials.
---------------------------------------------------------------------------
    \11\ BioPreferred 10 Year Anniversary Infographic. https://
www.biopreferred.gov/BioPreferred/faces/pages/articles/TenYears.xhtml.
    \12\ Danimer Scientific Planning $700 million, 400-Job Expansion in 
Decatur County. Danimer Scientific press release. March 2021. https://
danimerscientific.com/2021/03/30/danimer-scientific-planning-700-
million-400-job-expansion-in-decatur-county/.
    \13\ Novolex Launches New U.S. Manufacturing Line to Make 
Compostable Cups from Plant-Based Plastic. Novolex press release. 
https://www.prnewswire.com/news-releases/novolex-launches-new-us-
manufacturing-line-to-make-compostable-cups-from-plant-based-plastic-
301314575.html?tc=eml_cleartime.
---------------------------------------------------------------------------
Request
    Consistent with the express legislative directive of the 2018 Farm 
Bill, the undersigned stakeholders request that OMB and the ECPC work 
with USDA and Commerce to immediately develop NAICS codes for renewable 
chemicals and biobased product manufacturers as required by statute.
    NAICS codes are essential for the success of the biobased products 
industry as well as the future of the U.S. bioeconomy. It is imperative 
that these codes be developed so that the economic and environmental 
benefits associated with a robust domestic bioeconomy can be fully 
realized.
    Thank you for your consideration of these comments. Should you have 
any questions, please contact either or both of the following 
individuals:

   Jessica Bowman at 202-331-2028 or [email protected]

   Lloyd Ritter at 202-215-5512 or [email protected]

            Sincerely,
            
            

 
 
 
   [Plant Based Products Council                           [Corn Refiners Association (CRA)]
              (PBPC)]
 

                                     
                                     

 
 
 
   [American Soybean Association     [Plastics Industry Association
               (ASA)]                                (PLASTICS)]
 

                                     
                                     

 
 
 
 [National Corn Growers Association  [Alternative Fuels and Chemicals
              (NCGA)]                                       Coalition (AFCC)]
 

                                     
                                     

 
 
 
    [Ag Energy Coalition (AgEC)]
 

[Fact Sheet]


Plant-Based Leaders: Green Dot Bioplastics


                                                  ``Our customers have 
                                                a genuine desire to 
                                                make something that is 
                                                more sustainable and 
                                                less damaging to the 
                                                environment.''
                               Mark Remmert, CEO, Green Dot Bioplastics

                                          Nearly 10 years ago, 
                                        visionary investors saw an 
                                        opportunity to replace fossil-
                                        fuel based plastics with 
                                        similar materials sourced from 
                                        renewable agriculture instead 
                                        of petroleum.
                                          CEO Mark Remmert, a Kansas 
                                        native, was hired to build the 
                                        firm, called Green Dot 
                                        Bioplastics, from scratch.
    Mark had spent decades in Europe and Asia leading multinational 
chemical companies who specialized in traditional plastics and he chose 
rural Kansas as the start-up's headquarters.
    Many were surprised by the choice, but Mark had a vision for the 
company and the community.
    As he has fulfilled that vision, the company has carved a path that 
could serve as a roadmap for revitalizing much of rural America.
Marine Degradable Bioplastics
    Green Dot Bioplastics sells its products to manufacturers and brand 
owners large and small, including well-known brands and Fortune 500 
companies. They come to Green Dot Bioplastics when they want to make a 
product that is better for the environment but retains the features of 
traditional plastic.
    Some customers are exceptionally knowledgeable, including plenty of 
plastics professionals who arrive with product specifications, such as 
tensile strength, melt flow, shrink rates, and other standard plastics 
requirements.
    Others arrive with a simple goal: they want to do better by the 
planet.
    ``Our customers have a genuine desire to make something that is 
more sustainable and less damaging to the environment,'' said Mark.
    ``They reach out seeking to reduce their carbon footprints, lessen 
global waste and pollution, or to find sustainable raw materials for 
their products,'' added Mark. ``And we can help them achieve all three 
goals, and more besides.''
    His most promising products today are marine degradable 
bioplastics.
    ``Several years ago, we invented the chemistry and then created the 
process to make a line of plant-based polymers that are not only 
industrial compostable but also backyard, soil, and marine 
biodegradable,'' said Mike Parker, Director of Research and Development 
proudly.
    ``We're certainly not advocating that plastic should end up in the 
ocean,'' Mark quickly added. ``But we are all aware this does happen, 
and our material will biodegrade in weeks instead of decades.''
From Farm to Factory
    The process begins with a range of different agricultural inputs: 
wheat, potatoes, corn, cassava, and wood are just a few of the 
company's plant-based sources. Agricultural processors like ADM or 
Cargill buy these commodities from farmers, plus their leaves, stalks, 
and inedible parts some might call waste. Then, the companies process 
the inputs down to starches, proteins, and fibers.
    Green Dot Bioplastics buys these nearly-raw materials and hands 
them over to their chemists on staff who create new materials from 
them.


    Today, the company has dozens of plant-based plastics and drop-ins 
with a wide variety of purposes and mechanical properties.
    At this stage in manufacturing though, the bioplastics simply look 
like small, spherical pellets. The magic occurs when these pellets are 
fed into plastics manufacturing equipment and molded, extruded, or 
blown into the same products, indistinguishable from their petroleum 
cousins, except when it comes to sustainability.

          ``We invented the chemistry and then created the process to 
        make a line of plant-based polymers that are not only 
        industrial compostable but also backyard, soil, and marine 
        biodegradable.''
          Mike Parker, Director of Research and Development, Green Dot 
                                                            Bioplastics




          Emporia, KS, home to Green Dot's headquarters.

    Today, plant-based materials from Green Dot Bioplastics are found 
in scores of products including furniture, lawn & garden products, 
children's toys, automobile parts, and cell phone cases. The marine 
degradable bioplastics are best suited for single-use, disposable and 
packaging applications, such as food service ware, films, and bubble 
wrap, to name a few.
    Green Dot Bioplastics sells a considerable portion of their product 
to Asia.


    The company even has a full-time sales representative and 
manufacturing partner in Japan.
Supporting American Ag
    But it all begins in American agricultural communities.
    U.S. farmers produce significantly more than can be consumed 
domestically. For example, our country utilizes only 40 percent of the 
soybeans grown here.
    Farmers need someone to buy the excess.
    ``More than 90% of the plant based feedstocks we buy come from 
American farms,'' said Mark. ``We work hard to support our nation's 
agriculture.''
The Value Add
    The economics are impressive. ``Take a bushel of grain that costs 
$3 to $4. A farmer could export it raw for 5 a pound. Mill it and turn 
it into starch or protein, and a processor might get 20 or 30 a 
pound,'' Mark calculated.
    But that's still a commodity with almost no differentiation or 
variation. And it can be purchased anywhere in the world.
    ``We turn those milled materials into a highly-differentiated 
plastic available in only a few places globally, and we're able to sell 
it for $1.50 to $3.50 per pound,'' said Mark[.]
    That's a 500-600% increase in value resulting from Green Dot 
Bioplastic's capital investments, chemistry expertise, polymer 
expertise, and numerous innovations.
Rural America's Next Engine of Growth
    Better still, the economic benefits reach more than just American 
farmers.
    Green Dot Bioplastics has three facilities, all in Kansas 
communities ranging in population from 700 to 26,000 people and each at 
least 2 hours' drive from a major airport.
    Seventy-five percent of Mark's employees hold college degrees, 
including scientists, chemists, and engineers. Even the staff running 
machines on the manufacturing floor have at least 2 year degrees.
    ``In these communities, I'd estimate our salaries are two to three 
times the community average. In some cases, our employees are among the 
highest paid folks in town,'' added Mark.
    These types of Ag Tech and STEM jobs help grow and support the 
local rural economy.
    ``It's also about the brain power that didn't leave and the brain 
power we are bringing in. Many of our rural communities are now on 
their third or fourth generation of brain drain, and that's worse than 
the money leaving,'' noted Mark.
    One example is plant Engineering Manager, Amanda Childress, who 
joined the team, moving from New Mexico to put her mechanical 
engineering degree to work.
    ``The good news is, that in a small, rural community it doesn't 
take much to make a big difference,'' Mark added.
    But Green Dot Bioplastic's economic contribution to rural America 
doesn't end there.

          ``More than 90% of the plant based feedstocks we buy comes 
        from American farms. We work hard to support our nation's 
        agriculture.''
                                                   Green Dot's Remmert.
Reshoring Jobs
    Over the last 30 years, substantial amounts of American 
manufacturing moved to China. Companies built complex, global supply 
chains, supported by just-in-time shipping.
    ``Entire industries have gone extinct in the United States, and the 
institutional knowledge has disappeared as well,'' said Mark.
    Even before trade wars and the coronavirus accelerated a reversal 
in these trends; American companies who once relied exclusively on 
overseas production are seeking to return to U.S. shores.
    ``As a raw material maker based in the rural Midwest, U.S. 
companies are increasingly seeking our advice on how to make their 
products in the U.S.,'' Mark said. While Green Dot Bioplastics can't 
disclose specific clients, Mark noted, ``We've been able to help 
several big, well-known companies move millions of dollars' worth of 
manufacturing back to the U.S.''


    Consider the advantages. Previously, U.S. farm products were 
shipped to China for production and manufacture, then returned to the 
U.S.
    ``First there's an enormous carbon footprint to all that travel. 
Second, imagine the shipping costs--two trips across the Pacific,'' 
Mark noted.
    All in all, it took 3 months.
    ``Today, we make that product on Monday, it travels 100 miles down 
the road to our customer on Tuesday, and they go intoproduction on 
Wednesday,'' said Mark.
    Three months are reduced to 3 days. The thousands of tons of carbon 
required for global transportation becomes a short ride by truck. And 
the manufacturer saves substantial shipping costs.
    ``This industry offers a truly unique opportunity,'' said Mark. 
``We can bring manufacturing back to rural America--creating jobs in 
research and development, chemistry, and engineering for areas that 
have suffered economically. Not only that, the industry based on our 
nation's existing competitive strength in sustainable agriculture--
supporting farmers--while helping solve some of our greatest 
environmental challenges in plastic pollution and greenhouse gas 
emissions.''

          ``We've been able to help several big, well-known companies 
        move millions of dollars' worth of manufacturing back to the 
        U.S.''
                                                   Green Dot's Remmert.
Plant-Based Leaders: Hexas Biomass
Woman-Owned Startup Uses Grass to Save Forests


                                                  ``Our forests are 
                                                increasingly threatened 
                                                by climate change, 
                                                forest fires, and bark 
                                                beetles and other 
                                                pests.''
                                       Wendy Owens, CEO, Hexas Biomass.

                                          A forest of 20 year old pine 
                                        trees and a field of giant 
                                        perennial grass appear to have 
                                        little in common, but once 
                                        harvested, their biochemistry 
                                        is actually quite similar.
                                          Wendy Owens, CEO of Hexas 
                                        Biomass Inc., founded her 
                                        startup company on that 
                                        insight. ``We've developed 
                                        varieties of
a giant perennial grass that are exceptionally versatile and fast-
growing and able to serve as a substitute for wood, bamboo, and fossil 
fuel-based raw materials,'' Wendy explained. ``We call the varieties 
Xano Grass.''
Cut the Grass, Leave the Trees
    The idea behind Hexas grew out of Wendy's love for trees and the 
need to ease the industrial burden on forests globally. ``When it comes 
to wood, we can be a supplement or total replacement,'' said Wendy. 
``That's essential as our forests are increasingly threatened by 
climate change, forest fires, and bark beetles and other pests.''
    Meanwhile the global demand for wood is growing exponentially, 
driving up wood costs. The USDA expects wood prices in the U.S. to rise 
31-46% between now and 2050.
    Hexas is working with current and potential customers to use Xano 
Grass fiber to produce particle board, medium density fiberboard, 
packaging, bioplastics, and aggregate.
    When turned into a renewable fuel, Xano Grass biofuels meet the 
requirements of Renewable Fuels Standard (RFS) Program. EPA-approved 
biofuel applications of Xano Grass include biodiesel, renewable natural 
gas, jet fuel, heating oil, naphtha, and ethanol.
    ``Xano Grass produces three times more ethanol per acre than 
corn,'' said Wendy. ``This means it can replace fossil fuels and allow 
corn to be used for food, not fuel.'' She added that when converted 
into energy pellets, Xano Grass burns as hot or even hotter than wood 
pellets in BTUs per pound. In addition, Hexas is also exploring its 
ability to be used in hydrogen production.
From Grass to Globally Recognized Furniture
    When companies are considering a shift to more sustainable raw 
materials, like Xano Grass, they often study the impact of such a shift 
on their already existing manufacturing systems, fabrication processes, 
and bottom line.
    ``To upgrade to a `more sustainable lightbulb,' companies shouldn't 
have to replace the entire light fixture,'' said Wendy. ``We can 
deliver Xano Grass raw material as dust, chips, or fiber of any size or 
moisture content. And it drops right into existing manufacturing 
systems.''
    Wendy added, ``We work with an international home goods company on 
fiberboard applications, which they plan to utilize in their 
furniture,'' said Wendy. One of Hexas' largest customers is a well-
known Fortune 100 brand, with stores all around the world.
    In place of wood, Xano Grass fiber is seamlessly dropped into the 
existing particle board production process, helping to reduce the 
burden on forests all around the world.
    In addition to the current applications, Hexas is studying how its 
feedstock may be used in pulp and paper, green chemicals, textiles, 
building materials, and composite materials such as concrete and 
fiberglass. ``Right now we are testing Xano Grass fiber in concrete, in 
order to make it lighter while enhancing its acoustic and insulative 
properties without losing its strength,'' explained Wendy.

          ``To upgrade to a `more sustainable lightbulb,' companies 
        shouldn't have to replace the entire light fixture. We can 
        deliver Xano Grass raw material as dust, chips, or fiber of any 
        size or moisture content. And it drops right into existing 
        manufacturing systems.''
                                                          Hexas' Owens.
Additional Environmental Benefits
    ``We wanted to offer a plant-based raw material product that was 
both regenerative and cost effective,'' said Wendy. ``A product that is 
good for fields and farmers.''


          Xano Grass Fiber.
        
        
    In addition to reducing the pressure to harvest the world's trees, 
Xano Grass also improves the soil by returning nutrients to the earth, 
preventing soil erosion, and capturing significant amounts of carbon in 
the soil.
    ``It grows in a variety of soils--salinated, sandy, nutrient-poor, 
and soil that has deteriorated. It also will remediate soil by removing 
pollutants, including heavy metals, chemicals, and effluviant,'' added 
Wendy. ``For farmers, that means it can help remediate marginal land so 
it can be used to produce food crops again.''


          Fiberboard made from Xano Grass.

    Xano Grass also prevents nutrient run-off from excess fertilizer 
when planted along row crops. ``Studies have shown that Xano Grass 
absorbs the excess nutrients applied to the row crops, helping to 
prevent algae blooms in rivers and watersheds,'' added Wendy.
    When a company chooses Xano Grass, Hexas goes to work contracting 
with local farmers to grow it, offering them long-term contracts. 
``From the very first year, Xano Grass offers farmers solid annual 
yields, 20 or more dry tons per acre. This creates a steady revenue 
stream for them. And Xano Grass doesn't require a lot of time in the 
field to support production,'' explained Wendy.
    Importantly, Hexas will not allow cultivation that displaces crops 
grown for food.
    ``We only use marginal land, which we define as land that cannot 
economically support food crop production,'' said Wendy. But, she says, 
farmers are often eager to put such land to work, especially given all 
Xano Grass' environmental benefits.
Strengthening Local Economies
    Just like in real estate, biomass production comes down to 
location, location, location because transporting low density biomass 
long distances doesn't make economic sense.
    ``Shipping any kind of biomass is about time and space,'' Wendy 
said.
    With that limitation in mind, Hexas strives to enlist farmers 
within 60 miles of a customer's manufacturing plant.
    The good news is that Xano Grass thrives in a broad range of 
climates.
    Unforeseen benefits have come from these transportation challenges. 
``It means that our customers are supporting their local farmers, and 
that builds important relationships and keeps revenue within those 
local communities,'' explained Wendy.
    Hexas is looking to strengthen this idea by working with community 
stakeholders, like the Yuba Community College District in northern 
California.
    They are hoping to train the next generation of agronomists, 
biomass processors, as well as many others who can build careers in the 
new bioeconomy.
Choosing an Accelerator
    Like many start-ups, Wendy sought the support of a start-up 
accelerator, researching a handful before identifying which was the 
best fit for Hexas. Wendy chose Cascadia CleanTech Accelerator from the 
CleanTech Alliance and Vertue Labs and had an incredible experience 
learning with them.
    ``The program not only examined our ideas at the macro level, but 
dug deep into the technological and economic feasibility,'' said Wendy. 
``The networking was essential as well. We met mentors that we're still 
working with today.''

          ``Our customers are supporting their local farmers, and that 
        builds important relationships and keeps revenue within those 
        local communities.''
                                                          Hexas' Owens.


          Xano Grass sprouts.

    Hexas won the Standout Company Award in 2019.
    ``Even though this is my fourth start-up, there's always room to 
learn--so we feel extremely fortunate for the experience,'' she added.
    Based on her experience, Wendy recommends participating in an 
accelerator with a proven track record. She suggests looking into the 
companies that have previously participated in the accelerator and 
meeting with a few before making any important decisions.
    ``Review the curriculum to make sure it meets your needs and 
understand the time commitment,'' Wendy adds. ``Accelerators can 
consume your entire day, leaving founders to run their business at 
night.''
    Ms. Owens recommends avoiding any accelerator that requests large 
up-front fees and suggests that founders think very carefully about 
whether or not they are willing to give up equity in their company in 
exchange for funding and participation.
    Many accelerators request equity as a condition of joining their 
programs.
    Wendy purposely chose an accelerator that did not require Hexas to 
give up any equity. ``It was too early in our development to understand 
how that would impact our cap table and the company's valuation further 
down the line,'' she added.
Federal Programs and Support
    Policymakers in Washington have an important role to play when it 
comes to ensuring a competitive plant-based products industry, explains 
Wendy, singling out the USDA BioPreferred Program for special praise. 
She suggests that the Federal Government can and should do more by 
promoting non-food bioenergy crops as viable substitutes for petroleum-
based products and first-generation bioenergy crops like corn.
    Wendy believes, ``Washington needs to accentuate and accelerate the 
bioeconomy through policies and regulations that support its expansion 
in rural communities in particular.''
    She points to the addition of bioeconomy-based NAICS codes as a 
very important example of where a relatively simple policy change could 
give a real boost to the industry.
    ``There is no specific NAICS code for plant-based products or their 
raw material components. There's no code for biomaterials or 
bioenergy,'' explained Wendy. Wendy went on to say that without such 
codes, the Federal Government cannot effectively measure these 
industries.
    While the Federal Government has an essential role to play, Wendy 
says consumers will ultimately drive the market. Research from the 
Plant Based Products Council (PBPC) shows that 54% of U.S. consumers 
view these types of products favorably and more than half are more 
likely to purchase plant-based products in the next 3 months.
    ``Companies who can deliver sustainable products will find an eager 
market of more than 136 million U.S. customers, according to the 
data,'' said Ms. Owens.

          ``Companies who can deliver sustainable products will find an 
        eager market of more than 136 million U.S. customers.''
                                                          Hexas' Owens.
Plant Based Leaders: Novamont
Award Winning B-Corp and Compost Champion Creates Environmental 
        Solutions
        
        
                                                  ``We can all help 
                                                reduce the burden on 
                                                landfills and lower 
                                                methane emissions by 
                                                ensuring food waste 
                                                instead becomes 
                                                compost.''
                                    Paul Darby, VP Marketing, Novamont.

                                          Food waste is the single 
                                        largest input to landfills.
                                          In fact, 75% of our nation's 
                                        food waste ends up in 
                                        incinerators and landfills.
                                          Once discarded in a landfill, 
                                        food waste decomposes and con-
tributes directly to the emission of methane (CH4), a 
greenhouse gas. Methane is ``more than 25 times as potent as carbon 
dioxide at trapping heat in the atmosphere,'' reports the U.S. 
Environmental Protection Agency (EPA).
    EPA notes that landfills are ``the third-largest man-made source of 
CH4 emissions in the United States.''
    ``We can all help reduce the burden on landfills and lower methane 
emissions by ensuring food waste instead becomes compost,'' explained 
Paul Darby of Novamont, which is a member of the Plant Based Products 
Council (PBPC).
    Compostable bags are one essential component to addressing rising 
greenhouse gas emissions.
    Such bags provide consumers an easy and hygienic way to collect 
their food scraps for composting.
    ``Two of America's top ten largest grocery chains offer such 
compostable bags--one provides them to shoppers as fresh produce bags 
for use in-store and the other as food waste bags for use at home. Both 
are made in the USA from our MATER-BI. For every 1.5 kg of food waste 
collected and composted in this bag, 2.6 kg of CO2 
equivalent is saved, avoiding methane production in landfills,'' added 
Darby.
    Novamont's MATER-BI is a compostable biopolymer, derived from 
plants and biodegradable materials.
Food Waste for Healthier Soils
    But composting doesn't simply reduce greenhouse gas emissions. With 
the help of farmers and gardeners, composting's benefits reach much 
further.
    Compost captures nutrients and minerals in the food scraps and 
returns them to the soil. The rich organic matter benefits soil health 
through structural amelioration, increased water holding capacity, and 
greater water infiltration capabilities.
    And using soil-enriching compost helps prevent erosion of valuable 
topsoil.
A Composting Infrastructure Case Study
    A Novamont-assisted project illustrates one way to achieve these 
important goals.
    ``Milan is Italy's second largest city, with more than one million 
residents,'' explained Darby.
    In 2012, the city introduced a door-to-door organic waste 
collection system utilizing compostable bags made from Novamont's 
MATER-BI biopolymers.
    The company provided a starter kit of 25 free bags for every 
resident and supported a city-wide educational campaign.
    Italian legislation also requires all grocery store shopping and 
produce bags to be compostable which helps avoid plastic bag 
contamination at compost and anaerobic digestion facilities, all while 
creating another source of easy-to-find bags for collecting food waste 
at home.
    For example, every time shoppers fill a bag with fresh fruit and 
vegetables, they bring home a new bag that will contribute to this 
important environmental effort.


    The bags are then used by shoppers to line their home from kitchen 
counter food scrap bins, making disposal of apple cores, banana peels, 
and other food scraps quick, clean, and easy through the city's 
curbside collection system.

          ``Today, Milan collects over 85% of its residential organic 
        food waste for composting and anaerobic digestion with the easy 
        access to compostable bags playing a pivotal role in 
        participation rates while avoiding contamination with 
        conventional plastic bags.''
                                                      Novamont's Darby.


    ``We gave consumers the tools they need to divert food waste 
landfill and incineration,'' added Darby.
Milan's Exceptional Results Spread Across Europe
    By June of 2014, the program reached 100% citywide participation, 
collecting 50% of resident's organic waste, diverting it from local 
landfills, and delivering it to composting facilities plus anaerobic 
digestion facilities with on-site post-composting.
    That impressive result both extends the life of local landfills and 
dramatically reduces methane emissions.
    ``Novamont worked closely with the city and retailers to create and 
share messages about how to use the compostable bags, making sure 
consumers knew to put their cores and peels back in the bag for 
composting and curbside pick-up,'' added Darby.
    Italy, France, Spain, and Austria all require grocery store loose 
produce bags to be compostable.


U.S. Policymakers Study Milan's Success
    ``We also welcome American policymakers and other influencers for 
educational trips to see the success we've had in Milan.''
    ``For example, in 2019 we worked closely with the Natural Resources 
Defense Council (NRDC) to help coordinate a trip with city officials 
from Baltimore, Columbus, Denver, Oakland, and Phoenix,'' said Darby.
    A core tenet of NRDC's Food Matters project is to foster a food 
waste knowledge sharing network among cities.
    For 4 days, participants had the chance to see how the City of 
Milan, a hub for food systems work, has taken a systems approach to 
make its food system more sustainable.
    ``Participants met with governmental actors, NGO, and business 
innovators and built connections across cities and countries,'' 
explained Darby. ``And we would welcome visits from other interested 
policymakers in the future.''
    ``Our goal was to highlight different approaches that U.S. cities 
could learn from,'' added Darby.
    Today in the U.S., for example, the City of San Francisco allows 
only paper or certified compostable produce bags in their grocery 
stores. The compostable produce bags can be re-used for food scrap 
collection for the city's curbside organics program.
    But the paper bags are not ideal for food scrap collection, due to 
the high water content of most foods. They instead can be recycled.
    Novamont's educational campaign for policymakers focused on city-
level officials, because until recently, composting policies and 
related infrastructure projects were generally local, municipal issues.
    But that is about to change.
Congress Considers Composting
    Novamont, as part of the Plant Based Products Council, helped 
launch the U.S. Composting Infrastructure Coalition. The Coalition 
supports the COMPOST Act, which establishes a USDA-led Federal grant 
and loan guarantee program to help fund composting infrastructure. 
Other members of and advisors to the coalition include the NRDC, U.S. 
Green Building Council, National Waste & Recycling Association, U.S. 
Composting Council, Biodegradable Products Institute, and the Institute 
for Local Self-Reliance, and the American Sustainable Business Council.

          ``Our Goal is to launch products that can be conceived as 
        environmental solutions.''
                                                      Novamont's Darby.

    ``We couldn't be prouder to be part of PBPC and their legislative 
push to see the bill enacted into law,'' added Darby.
    ``More than 80% of Americans do not have access to food scrap 
composting. This bill can help provide funds to deliver that critical 
infrastructure. The result will be improved air, soil, and water 
quality across the nation.''
    Novamont cares about these issues because it is so close to U.S. 
Businesses and customers.
From the U.S. to Italy and Back Again
    For over 30 years, Novamont's visionary founders have taken an 
integrated approach to chemistry and agriculture.


          MATER-B Resin Pellets.

    Today, the company is a global leader in bioplastics and biobased 
products development and production, with over 1,800 patents, primarily 
in biopolymers and biochemicals.
    ``Our goal is to launch products that are conceived as 
environmental solutions,'' explained Darby.
    MATER-BI resins are made in part by utilizing a patented technology 
from San Diego-based Genomatica. That technological process converts 
plant-based sugars to the renewable green chemical known as 1,4 
butanediol (or Bio-BDO), utilizing industrial-strength engineering of 
microorganisms to perform the chemistry reliably at commercial scale.
    The company's products reach far beyond bags, all the way to the 
beginning of the plant-based value chain. For example, Novamont 
produces MATER-BI resins used to manufacture agricultural mulch film.
    This substitute for conventional plastic mulch is used by farmers 
the world over to protect crops from insects and disease. It also helps 
eliminate weeds, lining the ground next to row crops and vegetables.
    ``Our mulch film helps farmers improve production and efficiency. 
Then, at the end of the growing season, our mulch can simply be plowed 
back into the soil where it will biodegrade,'' explained Darby.
    MATER-BI is also used for food service applications which include a 
coating for paper cups and packaging to help provide water and grease 
proof resistance.
A Model for Revitalizing U.S. Manufacturing
    ``We understand the importance of supporting local manufacturing. 
We work closely with a number of U.S.-based manufacturers, and we want 
to promote the growth of this industry in the U.S.,'' said Darby. ``We 
see opportunities to invest further in the U.S., but we need the help 
of policymakers to shape the business environment and boost this 
growing industry.''
    After all, Novamont has already shown how its economic 
revitalization model succeeded in Italy.
    In preparing to develop their four key production facilities 
including the one tied to the partnership with Genomatica, Novamont 
identified previous manufacturing sites that were no longer 
competitive, seeking an opportunity to redevelop idle infrastructure. 
While such facilities were once drivers of the local industrial 
economy, Novamont converted these sites into 21st century biorefineries 
and production facilities on the very cutting edge of chemistry and 
manufacturing.
    Refurbishing unused buildings and fermentation equipment combined 
with new equipment, the Bio-BDO facility created 300 local construction 
jobs and today 70 people are employed at the plant, delivering high-
quality jobs in the manufacturing sector.


    In fact, the regeneration of local areas through the rehabilitation 
of abandoned production sites is a primary company principle, aligned 
with its B Corp ethos.
B-Corp Status
    The global network B Lab has nominated Novamont a B-Corp `Best for 
the World 2021' company, recognizing its exceptional environmental 
performance, which is in the top 5% of all B-Corp companies worldwide.
    Certified by the independent body B Lab, the Benefit Corporation 
designation establishes that in addition to generating profit for 
shareholders, B-Corp companies also create a positive impact on society 
and the environment, thus building a more inclusive and sustainable 
economy.
    ``Benefit Corporations meet the highest standards of verified 
social and environmental performance, public transparency, and legal 
accountability to balance profit and purpose,'' explained Darby.

          ``We work closely with a number of U.S.-based manufacturers 
        and we want to promote the growth of this industry in the U.S. 
        We see opportunities to invest in the U.S. but need the help of 
        U.S. policymakers.''
                                                      Novamont's Darby.
Plant Based Leaders: Virent
Innovative Company Recreates Petrochemicals & Fuels with Sustainable 
        Plant-Based Biomass
        
        
              Dave Kettner, President & General Counsel of Virent, Inc.

                                          Today's global economy relies 
                                        on hydrocarbons in the form of 
                                        natural gas and oil. Those 
                                        resources began as organic 
                                        matter--decaying plants and 
                                        animals, subjected to intense 
                                        geological pressure over 
                                        millions of years.
                                          Now, in an effort to reduce 
                                        our reliance on oil and natural 
                                        gas, that geological process 
                                        has been reimagined and 
                                        recreated by Virent scientists, 
                                        who have substituted 
                                        sustainable biomass
for ancient organic matter, creating a new source of green chemicals 
and biofuels.
    Yet at the molecular level, these new and renewable products are 
identical to their petroleum-derived counterparts. That means Virent's 
materials are ``drop-ins''--they can be used in the current 
manufacturing and energy infrastructure and production plants without 
changes to existing supply chains.
A Simple Explanation for a Complex Process
    Ralph Lerner explained the process from their Madison, Wisconsin 
facility. He serves as Senior Vice President of Commercial Development 
at Virent.
    ``Fossil fuels are comprised of carbon and hydrogen.''
    ``Meanwhile, renewable feedstocks are made up of carbon, hydrogen, 
and oxygen. To create renewable hydrocarbons, you need to remove that 
oxygen. That's what our technology achieves,'' said Ralph.
    Dave Kettner, President of Virent, added, ``And while oil and 
natural gas are created over geological time frames, our process is 
done rapidly. Better still, our primary byproduct is water, rather than 
the carbon and methane pollutants produced by extracting and processing 
oil and natural gas.''
    That result? Dramatically lower carbon footprints for companies 
choosing Virent's plant-based green fuels and chemicals.
From Plant-Based Bio Polyesters to Sportswear, Clothing and Beverage 
        Bottles
    ``Polyester is one of the biggest and fastest-growing material 
sectors--used in clothing, textiles, plastic films and packaging, and 
plastic bottles, among many other things,'' explained Ralph.
    Polyester today is made from a petroleum-based precursor chemical 
known as paraxylene.
    Virent has created an alternative source of paraxylene, made from 
sustainable agricultural feedstocks and, once commercially available, 
lignocellulosic materials from wood waste and the stalks of corn, sugar 
cane, and other materials. Because it is the same molecule, albeit 
biobased, Virent's renewable version can be seamlessly substituted for 
its petroleum-based counterpart to make biopolyesters.
    Manufacturers of all types are taking notice.
    ``We've spoken to numerous companies in many different end use 
areas that are interested in biopolyesters. Many want to make more 
sustainable products, others are working to reduce greenhouse gas 
emissions,'' said Ralph. ``Our products help companies achieve both.''
    Virent believes it can help achieve those goals.
    A Life Cycle Analysis study conducted with a third party found a 
greater-than 50% reduction in the CO2 footprint of Virent's 
biobased paraxylene when compared to its petroleum-based counterpart.
    PET is the acronym for the materials that make common petroleum-
based plastic bottles.
    In 2015, in partnership with Coca-Cola, Virent created the world's 
first demonstration-scale production of a plastic bottle made entirely 
from plant-based paraxylene. The sustainable chemical was dropped into 
an existing PET production process, spotlighting just how easy such a 
transition could be, according to the Virent team.
    ``And these plant-based bottles are completely recyclable through 
existing waste management systems,'' added Ralph.


                                              Ralph Lerner, Senior Vice
                      President of Commercial Development, Virent, Inc.

                                                  We've spoken to 
                                                numerous companies 
                                                interested in 
                                                biopolyesters. Many 
                                                want to make more 
                                                sustainable products, 
                                                others are working to 
                                                reduce greenhouse gas 
                                                emissions. Our products 
                                                help companies achieve 
                                                both.
                                                       Virent's Lerner.

Essential Feedstock & Product Flexibility
    Perhaps most impressively, Virent has a growing portfolio of green 
chemicals.
    Hard plastics used in applications such as electronics, laptops, 
motorcycle helmets, and safety goggles, for example also start with 
chemical raw materials that include benzene.
    ``Benzene is another petrochemical we've re-created from plant 
feedstocks. It's commonly converted into advanced engineered plastics, 
detergents, packaging materials, and various other applications,'' 
noted Ralph.
    ``Another interesting market is construction materials--think about 
petroleum-based products like ABS and polycarbonate, for applications 
including plastic pipes and building windows as examples. These 
products currently use benzene as one of the raw materials and could 
also ultimately be based on plant-based chemicals,'' noted Dave.


    ``When made from Virent's renewable, plant-based chemicals, these 
long-lasting products actually become carbon sinks. After all, they are 
made from atmospheric carbon removed from the environment during 
photosynthesis,'' explains Dave.
    ``We can also make plant-based toluene, which has solvent 
applications, or which can be a building block for other specialty 
chemicals,'' Ralph notes.
    The mix of scientific names may not mean much to non-chemistry 
majors, but the technology's flexibility is the important takeaway.
    ``A single commercial plant will be able to make all three green 
compounds from a wide diversity of feedstocks,'' said Dave. ``To make 
our green chemicals, our technology can use carbohydrates from corn, 
beets, sugar cane, corn stover, ag waste, and multiple types of woody 
biomass, including pine, ash, and others. For a commercial scale plant, 
we are focused on feedstocks that are commercially available today, 
while looking towards cellulosic feedstocks when they are available.''
    The U.S. today has the world's most efficient agricultural sector 
that meets U.S. demand and also exports products around the world. 
Agricultural productivity is continuing to increase and companies like 
Virent are providing new market and growth opportunities to U.S. 
agricultural producers.
Consumer Demand Drives Sustainability
    Of course, the Virent name won't appear to consumers on store 
shelves. The company sits near the beginning of the manufacturing 
process, with plans to work with companies in the chemical industry to 
develop its plant-based chemicals and establish a supply chain.


    But the consumer market is key.
    ``Getting consumers and the consumer brand companies invested in 
sustainability issues is essential to creating a healthy market for 
renewable products,'' said Dave. ``As more consumers speak up--calling 
for responsible corporate action and better products--we see interest 
at companies growing.''
    ``Right now, our marketing focus is on working with brands and end 
users to convey the potential of biobased materials and also to produce 
demonstration products. It's a chance to show them that we have the 
technology. And consumer-facing brands have been quite interested,'' 
said Ralph.
    Virent is actively working on the scale-up and commercialization of 
its technology. Longer term, the company also has plans for licensing 
the technology so that others can help make a positive difference 
towards a more sustainable environment.
    ``We're actively pursuing all avenues,'' said Dave.

          Virent is one of the few that design green chemicals with 
        catalysts instead of microorganisms.
                                                      Virent's Kettner.
Government's Role
    ``Our industry is 5 or 10 years old and we're scaling up a whole 
new industry from scratch,'' explained Dave. ``Of course, we're 
simultaneously competing with oil and petrochemicals--sectors that have 
decades of investment and optimization.''
    The first refineries were built over 100 years ago, and 
petrochemicals date back to the 1930s.
    ``Biobased products are increasingly competitive on price, but it's 
tough to beat someone with a century-long head start. And that's where 
government policy and tax incentives could really help,'' he said.
More on the Science
    Virent is not the only company making green chemicals. But they're 
one of the few that design these essential building blocks with 
catalysts instead of microorganisms.
    Catalysts are inanimate. Microbes are, of course, living creatures.
    ``Scientists have engineered yeasts and other microorganisms to eat 
the sugar from biomass feedstocks and then excrete the chemical 
compound of interest. That is how ethanol is commonly manufactured,'' 
explains Dave.


    ``But as living creatures, the microorganisms also need to grow and 
replicate, and so they consume some of the sugars for that purpose, 
reducing the yield of the final product.''
    Most microorganisms eat only one or a couple types of sugar. They 
can be sensitive creatures, too--to temperature, contamination, and 
competition.
    ``Our catalysts don't care about any of those issues and don't 
consume a drop for other purposes, so they don't reduce yield,'' added 
Dave. ``They conduct their proscribed chemical reactions and are ready 
to go another round. Better still, we've designed our catalysts to work 
with all types of sugars and other secondary compounds, which provides 
us feedstock flexibility so that we can co-locate our production 
facilities near feedstock inputs from nearly every part of the U.S. and 
around the world.''









    The Chairman. Thank you, Ms. Bowman.
    Next, we have Ms. Stolzenburg. Please begin when you are 
ready.

STATEMENT OF NAN C. STOLZENBURG, PRINCIPAL PLANNER AND FOUNDER, 
    COMMUNITY PLANNING & ENVIRONMENTAL ASSOCIATES, BERNE, NY

    Ms. Stolzenburg. Thank you. Good morning, everyone. My name 
is Nan Stolzenburg, and I am a community and land use planning 
consultant with almost 30 years of experience working with 
rural communities. Today, I am not representing any specific 
agency or organization, but wish to represent the many rural 
communities I have experienced working with on the topic of 
siting renewable energy facilities.
    To grow the renewable economy, we must address the 
challenges relating to siting of renewable energy facilities in 
rural areas. I will focus specifically on solar facilities, and 
how the lack of land use planning, information sharing, 
community involvement, and forethought relating to siting 
creates barriers to the renewable economy.
    There certainly is recognition that we need to develop 
renewable energy resources to meet climate change challenges, 
but at the same time, our efforts to meet that challenge should 
not diminish agricultural production, or adversely impact our 
rural communities or our environment. Because facility siting 
is currently industry-driven, local communities usually are 
reactive to a specific proposal. Few have done or even know how 
to do any proactive planning to identify and locate appropriate 
sites that would work for all. Few communities have the 
resources to do comprehensive analysis with a lot of public 
input to identify acceptable locations for siting. Coupled with 
real or perceived lack of tangible benefits for host 
communities, poor siting that removes prime farmland soils, 
prevents other desired rural land use opportunities, and 
adversely affects other aspects of the rural economy causes 
friction and fosters negative attitudes towards renewable 
energy. Rural communities often resent their losses that 
benefit urban areas. Development of large-scale solar 
facilities are often at cross purposes to other stated public 
goals, such as protecting prime farmland soils for agriculture, 
or for woodlands to promote carbon sequestration.
    Although some facility siting guidance and planning tools 
exist, they often remain unreachable for our small communities 
due to lack of coordination, staff, communication, and regional 
planning. But these challenges can be overcome with good 
planning.
    What does good planning mean? Good planning involves 
identifying both natural resources and critical local features 
that need to be protected together with identifying locations 
that have the right conditions for a renewable facility. Models 
exist for this natural resource-based type of planning, but 
they are not commonly or easily applied. It would be a planning 
process carried out at the local level to involve local 
officials and community members. This would build both 
acceptance and more assurance for approval processes. It would 
include development of much-needed site selection systems that 
can be applied broadly but fine-tuned locally with incentives 
and required performance standards. It should prioritize lands 
that are distressed or no longer usable for other purposes, and 
identify sites consistent with other local goals and regional 
goals. Suburban and urban locations should receive a lot more 
attention as locations for renewable energy facilities, 
especially related to rooftop, parking lot, and building 
integrated systems and with incentives to support them. Prime 
agricultural soils and forestlands should be protected.
    I urge Congress to consider establishing programs and 
policies that address these problems. Some of these solutions 
could include to promote local planning and provide financial 
resources that assist communities in assessing their renewable 
energy capacity, and that involves local residents in a 
meaningful way to apply criteria, identify appropriate sites, 
and balance a variety of needs. We can collate existing 
planning models in renewable energy siting research to 
establish siting criteria, and then incentivize them or require 
them in certain instances. We should require or incentivize use 
of dual-use, that is, like agrivoltaics, in renewable energy 
siting and involve the farm community early so that they can 
also benefit from these renewable facilities. Agrivoltaics can 
couple food protection, raising and use of native grasses and 
pollinator friendly plants that meshes agricultural 
entrepreneurship with renewable development. We need to promote 
truly community-scaled facilities that provide more benefits 
locally and that are perceived to be beneficial to the rural 
community. I urge Congress to establish national policies 
related to siting of renewable energy facilities, and to 
enhance local planning tools that consider the complex and 
multi-faceted experiences, expectations, and values of our 
rural residents. We should be looking across states and 
carefully identifying and prioritizing suitable locations that 
balance smart land use planning in a way that also develops 
renewable energy resources.
    It is my hope that by taking these steps, that the 
renewable energy economy will flourish. Thank you very much.
    [The prepared statement of Ms. Stolzenburg follows:]

    Prepared Statement of Nan C. Stolzenburg, Principal Planner and 
   Founder, Community Planning & Environmental Associates, Berne, NY
    Good morning and thank you for the invitation to participate in 
today's hearing. My name is Nan Stolzenburg, and I am owner of, and 
Principal Planner for the consulting firm, Community Planning & 
Environmental Associates (CP&EA) located near Albany, NY. I have 
provided land use and environmental planning consulting to small and 
rural communities throughout New York State for over 28 years. I am 
certified as a Planner (AICP) and an Environmental Planner (CEP) by the 
American Planning Association.
    My work is focused exclusively on the planning needs of small and 
rural communities, and we have been principal consultants on numerous 
county-level and town-level agricultural and farmland protection 
planning efforts across the state. I have also worked with many rural 
communities on issues related to renewable energy land uses. My 
comments stem from my experiences from being retained by communities 
specifically to address renewable energy land uses at the local level 
through Town comprehensive plans, open space plans, natural resource 
inventories, and local land use regulations. Also, my personal 
experience as a member of a dairy farm family and a resident of a very 
rural area, offers me an additional, first-hand experience to share.
    I am honored to speak to you today. I feel it is particularly 
important to convey to you one aspect of renewable energy development 
and it is an issue that challenges movement towards a more positive 
renewable energy economy. That issue is the siting of renewable energy 
facilities, specifically solar facilities, and the local perspective on 
such facilities. As my experiences attest, this topic needs much more 
attention. This topic is not only relevant to the broader renewable 
economy, but to agriculture. As the industry moves towards large-scale 
solar development, rural communities and their local policies can and 
do affect farmers needs or desires to use their farmlands for renewable 
energy development. Creative opportunities to promote renewable energy, 
multi-use farming, and build community exist, but are generally not 
taken advantage of. Solar developers economic decisions are driving the 
system, which typically leads to friction with rural host communities.
    My perspective is shaped from experiences in New York. I recognize 
that the situation seen here may not be the case in all states. The key 
point I wish to convey is that a general lack of planning, 
coordination, information sharing, community involvement, and 
forethought related to siting of renewable facilities in rural areas 
has created barriers to a broader renewable economy and many missed 
opportunities. Lack of proactive planning for siting and site layout of 
these facilities coupled with the solar industry solely at the helm of 
site selection has had adverse impacts. These include the removal of 
valuable farmland and forestland, adverse impacts to rural character--
one of the largest economic assets a rural community has, and promotion 
of negative attitudes towards renewable energy. The lack of tangible 
benefits received by host communities, taxation issues, and growing 
resentment that these facilities are imposed on rural communities to 
benefit urban communities are also on the minds of many rural residents 
and local officials.
    There certainly is a recognition in many rural communities that we 
need to move assertively to develop renewable energy resources to meet 
the challenges posed by climate change. But our efforts to meet that 
challenge should not diminish agricultural production, or adversely 
impact our farm communities, or our environment. I do not accept the 
premise that our renewable energy economy must come no matter its cost 
to our communities and environment. As a professional land use planner, 
I know there are indeed steps that can and should be taken to address 
this.
    Solar facilities (as well as wind and biofuel) are often the 
largest built, non-farming feature in a rural community's landscape. 
These are major land uses built at a scale and intensity in stark 
contrast to other uses. Facilities are getting larger, not smaller. The 
current acceleration to develop renewables revolves around economics 
and economies of scale, and thus site selection gives little thought to 
the very features most highly valued in rural communities. Universally, 
those highly valued features revolve around rural character, 
agriculture, open spaces, and clean environments. At its core, the 
current direction focusing on large-scale renewables is seen as 
inconsistent with what these communities are all about. A failure to 
address this is a barrier to an expanded renewable economy.
    These barriers often result in prohibitive local regulations, more 
rural/urban divisions and lost opportunities for farmers. Not 
surprisingly, new, large-scale renewable energy facilities fosters 
`NIMBY' or ``Not In My Backyard'' attitudes, and thus stymies public 
support.
    Rural communities are generally unprepared to address large-scale 
renewable facilities. They often have no staff support, rely on 
volunteer planning boards that often have little information about 
options they could incorporate into an application to promote best 
management and siting practices. They are not skilled in the 
environmental review of such facilities and lack resources and tools to 
evaluate and incorporate renewable energy into their local land use 
decision making. We need to empower our communities to overcome these 
weaknesses.
    More planning is needed to guide solar facility siting. Few states 
and even fewer local municipalities have actually gone through a 
concerted planning process to identify locations that would be 
acceptable and suitable for renewable facilities.
    Good planning would involve identifying both natural resources and 
critical local features that need to be protected and identifying 
locations that have the right conditions for the renewable facility, 
such as proximity to transmission lines. Through use of Geographic 
Information System technology, these criteria for siting solar and 
other renewables can be easily applied and mapped. Communities could 
collectively make choices about where they can accept such facilities. 
Local policies can be fashioned to facilitate this. Such planning would 
give both renewable energy developers and local communities guidance as 
to where to focus efforts and this will lead to more efficient and 
better approval outcomes. It would eliminate the perspective that 
renewable facilities are being `foisted' on them that benefit others.
    There are some examples of this type of planning: For example, in 
Kentucky, a ``solar siting potential'' map has been developed that can 
be used to help local communities plan for, instead of simply react to, 
renewable facilities. In other places, land trusts and environmental 
organizations have stepped in to fill that same planning need with 
siting guidelines and/or mapping tools. For instance, the Maine 
Farmland Trust, Scenic Hudson (in NY),\1\ the American Farmland Trust, 
and the Chesapeake Conservancy in Maryland have all developed 
guidelines or GIS-based planning tools to help foster good facility 
siting and planning. Also, many solar developers publish their own 
siting guidelines (Such as the Solar Energy Industries Association, or 
SEIA). The U.S. Department of Energy, Solar Energy Technology Office 
(SETO) \2\ has been conducting research into best management practices 
for solar siting and has many good resources.
---------------------------------------------------------------------------
    \1\ https://www.scenichudson.org/our-work/climate/renewable-energy/
welcome-to-scenic-hudsons-solar-mapping-tool/.
    \2\ https://www.energy.gov/eere/solar/solar-energy-technologies-
office.
---------------------------------------------------------------------------
    All these are good tools with good information that could be 
helpful. A significant issue is that these tools usually do not trickle 
down to the local level where the actual renewable development is 
taking place. That reflects a lack of coordination, communication, and 
regional planning to address these issues.
    In order to both avoid and mitigate negative impacts and to build 
acceptance, planning processes need to take place at the local level to 
involve local officials and community members. As stated in a 2017 
report Accelerating Large-Scale Wind and Solar Energy in New York: 
Principals and Recommendations \3\ ``communities need tools and 
resources, such as comprehensive planning and zoning ordinances, and 
expertise in how to use them, to be effective partners in the 
renewables development process.'' And that is simply not happening. As 
a result, the positive opportunities associated with renewables are 
greatly diminished.
---------------------------------------------------------------------------
    \3\ https://www.nature.org/content/dam/tnc/nature/en/documents/
accelerating-large-scale-wind-and-solar-energy-in-new-york.pdf.
---------------------------------------------------------------------------
    In New York State at least, a variety of siting guidelines have 
been produced by state agencies and organizations, but there remains 
little coordinated, state-wide forethought into considering impacts to 
farmland, food systems, farmers & farm communities. While multiple 
siting guidelines exist and offer recommendations, there are still no 
special protection of prime agricultural soils and in many cases, 
forested areas. Clearcutting of large swaths of forest land, which is 
happening when solar is developed, is especially difficult for rural 
communities to accept.
    Development of solar facilities are often at cross purposes to 
other stated public goals. For instance, prime farmland soils are often 
lost to agricultural production when it is more profitable to farm the 
sun than food. Farmers that rely on rented farmland for their 
operations have lost access to those fields which have been converted 
to solar use. This loss can disrupt farm viability. When rented 
farmland is slated for solar development, the farmer loses ability to 
implement whole-farm nutrient management plans for example. Loss of 
leased farmlands decreases the number of farms, which will also affect 
farm suppliers, services, and the regional economy. In our current farm 
economy, it is a disturbing trend that it is more economically 
beneficial for farmers to host solar facilities than farm that land.
    Right now, because developers propose the sites and government 
regulators only react to proposals, it is site developers that are 
making the choices about where these facilities get located. Flat, 
accessible land is, unfortunately, desirable for both farming and 
renewable energy and so this friction often enters the review process 
from the very beginning.
    Local communities, often referred to as `host communities' more 
often than not in my experience have no say in whether they want to 
host these facilities, and do not often feel like they receive any 
benefits. Resentment that builds due to having to accept adverse 
impacts to their landscape, environment and community with no local, 
tangible benefits contribute to the rural/urban divide.
    This absence of planning and proactive involvement of local 
communities often places significant barriers to renewable energy 
development. Legitimate concerns should be taken into consideration in 
the renewable economy. Planning that involves local officials, farmers 
and residents is a pressing need that is currently unsupported. I 
strongly advocate for government to take a greater role in guiding and 
incentivizing facility siting and providing standard protocols, 
methods, and expectations. We should be looking across states, and 
carefully identifying and prioritizing suitable locations that balances 
smart land use planning that preserve what is important to rural 
communities and the need to develop renewable energy resources.
    Governments should consider creating a potential site hierarchy 
system, with incentives and a faster and easier approval process for 
sites deemed best suited for such facilities. There should be policies 
and requirements in place that emphasize prioritizing lands that are 
distressed and no longer useful for other purposes. Suburban and urban 
locations should receive a lot more attention so that development of 
rooftop solar and building integrated solar for residential and 
commercial buildings is an equal part of the solution. At the same 
time, prime agricultural soils and other important agricultural 
resources should be protected during the siting and application review 
process. This is especially important in the northeastern United States 
which has land resources and water to support farming in ways western 
and mid-western communities do not.
    Government should not shy away from local community input. Instead, 
use community input in a planning process to help inform the selection 
of potential sites so that local communities have a voice in that 
selection and simply don't have sites imposed on them by developers and 
regulators.
    Our policies should consider encouraging more smaller solar energy 
facilities that distribute the power generated locally. Communities in 
general view these facilities more favorably because they make a 
difference locally and there are tangible benefits that could outweigh 
disadvantages. Smaller facilities will likely have smaller footprints 
and lower impacts to agriculture lands, rural character, and the 
environment.
    Farms and agricultural lands are just as fragile as our 
environmental resources. The key is to use sensible planning to ensure, 
that in meeting the challenges of one environmental problem, we don't 
create new problems and other adverse environmental impacts. Local 
agriculture and agricultural resources need to be accorded more value 
in siting decisions, to protect productive agricultural lands and 
forestlands for our future. The [COVID] pandemic and its exposure of a 
broken food system is a sharp demonstration of the community need for a 
robust supply of local farm products.
    There are many but yet mostly untapped opportunities to promote 
dual use of farms where agricultural activities can take place 
simultaneously with energy generation. Dual use (often referred to as 
`agrivoltaics') can promote use of native grasses and pollinator-
friendly plants to provide habitats for butterflies and support bees 
that farmers rely on. Sheep grazing on solar farms is an excellent 
opportunity that meshes agricultural opportunities and entrepreneurship 
with renewables, but is neither required, nor easily accepted by the 
solar developers (See Solar and Multiuse Farming, attached). There is a 
great need for information, incentives and in some cases requirements, 
to promote these opportunities for agrivoltaic uses. Should that take 
place, we must also address lack of markets and processing for sheep 
and their products. This is an example of ways solar development can 
provide multiple benefits and provide a way to help farmers use solar 
as a steady revenue stream.
    In light of these challenges, I urge Congress to consider 
establishing programs and policies that address these problems. These 
include:

  1.  Promote local planning that assists local communities in 
            assessing renewable energy capacity in a way that involves 
            local residents in a meaningful way. This includes 
            supporting local planning efforts such as comprehensive 
            planning, natural resource inventories, and open space 
            planning. These plans need to establish methods that allow 
            for renewable energy projects in appropriate areas 
            supported by the community. Financial resources are needed 
            for conducting these basic community planning efforts. 
            These are grassroots efforts that help engage people and 
            promote communication. This will ultimately empower local 
            communities to accept renewables into their economy.

  2.  Provide assistance in the form of technology and staff to help 
            these communities navigate myriad sources of information. 
            Fund agencies such as Cooperative Extension or others to 
            serve as information clearinghouses to aid rural 
            communities.

  3.  Promote application by solar developers of best management 
            practices that preserve environmental and especially, 
            scenic resources. These are major barriers and must be 
            addressed.

  4.  Establish policies that incentivize use of disturbed sites first, 
            as well as rooftop, parking lot, and building-integrated 
            solar facilities in all locations--rural and urban--first 
            instead of green locations. Do not put rural areas in the 
            position of having to supply all renewable energy to urban 
            and suburban areas.

  5.  Collate existing models developed across the States to identify 
            farmland criteria to steer renewable energy facilities to 
            locations that preserve valuable farmland needed for food 
            production, and require or incentivize application of these 
            criteria.

  7.*  Require or incentivize use of agrivoltaic's in renewable energy 
            siting and involve the farm community early in siting so 
            that the farm community can benefit from renewable 
            facilities.
---------------------------------------------------------------------------
    * Editor's note: there was no item number ``6.'' in the submitted 
statement. It has been reproduced herein as submitted.

  8.  Promote smaller-scaled facilities that are truly `community 
            facilities' so that renewable energy production has greater 
---------------------------------------------------------------------------
            benefits locally.

  9.  Promote use of host community agreements so that affected 
            communities see benefits.

  10. Further, address tax issues and support training for those 
            involved in taxation of renewable facilities to enhance 
            effectiveness and fairness of PILOT agreements that are 
            negotiated--again to offer local benefits.
Conclusion
    I urge Congress to establish national policies related to siting of 
renewable energy facilities and to enhance planning tools and 
principals when thinking about ways to expand the renewable economy. In 
so doing, consider the complex and multi-faceted experiences, 
expectations, and values of rural residents, find ways to promote 
renewables in a way that recognizes and balances the often-competing 
community goals and needs, and establish programs, requirements and 
incentives that positively involve rural communities and residents in 
the renewable economy rather than imposing it on them.
                               Attachment
Solar & Multiuse Farming
September 2019



 
 
 
           www.seia.org                 www.solargrazing.org
 

Co-locating Utility-scale Solar with Livestock & Pollinators
    Solar development and agricultural use can exist not only side-by-
side, but increasingly are found together.

   A farmer can add solar to their property and get steady 
        income from a land or rooftop array.

   Solar energy facilities can also collaborate with local 
        farms and bee-keeping organizations to incorporate pollinator 
        friendly plants and bee hives onto their sites.

   Responsible solar development could improve soil health, 
        retain water, nurture native species, produce food, and provide 
        even lower-cost energy to local communities.

   Sheep farmers have opportunities to contract for vegetation 
        management of solar sites and thus increase farm viability.
        
        
          Photo Credit: American Solar Grazing Association.
Benefits to Farmers
    Farming is an extremely low-margin, competitive industry. If a 
farmer can add solar to their property and get steady income from a 
land or rooftop array, it can enable them to keep their farm.\1\ Steady 
income from solar projects means that farmers are less vulnerable to 
fluctuations in market prices on their products. Especially for larger 
solar projects, local government and communities benefit from collected 
taxes and localized spending.
---------------------------------------------------------------------------
    \1\ https://www.renewableenergyworld.com/articles/2016/04/solar-
power-more-lucrative-than-crops-at-some-us-farms.html.
---------------------------------------------------------------------------
    ``Solar grazing'' is a method of vegetation control for solar sites 
that utilizes livestock, primarily sheep.\2\ While solar grazing is 
currently in pilot phases on various sites, it is increasing in 
popularity. Solar companies can contract with local farmers, resulting 
in a relationship that is financially beneficial for both farmers and 
solar developers. Properly installed systems are benign to nearby 
animals.
---------------------------------------------------------------------------
    \2\ Various livestock, and sheep in particular, may be sensitive to 
the preexisting mineral contents of the soil, and proper soil testing 
should always be done prior to grazing.

------------------------------------------------------------------------
 
-------------------------------------------------------------------------
    According to a study conducted by Cornell University in 2018 \3\ and
 a study from the National Renewable Energy Laboratory in 2016,\4\ co-
 location and solar grazing bring net positive benefits for farmers, in
 the form of hundreds of dollars per acre each year in additional
 income, and solar sites, through increased energy production and
 reduced maintenance expenses.
\3\ Kochendoerfer, N. Hain, L., Thonney, M.L. (2018) The Atkinson Center
 for a Sustainable Future at Cornell University https://
 www.solargrazing.org.
\4\ https://www.nrel.gov/news/features/2019/beneath-solar-panels-the-
 seeds-of-opportunity-sprout.html.
------------------------------------------------------------------------

    Solar energy facilities can also collaborate with local farms and 
bee-keeping organizations to incorporate pollinator friendly plants and 
bee hives onto their sites. There are many benefits to combining solar 
facilities with pollinator habitats: \5\
---------------------------------------------------------------------------
    \5\ https://www.greenbiz.com/article/solar-farms-could-make-
fertile-habitats-bees-and-butterflies.

   Using one large solar field or perimeter screening area is 
        akin to planting thousands of backyard pollinator gardens, 
        which ultimately increases the productivity of farmland for 
---------------------------------------------------------------------------
        miles around the facility.

   Planting native pollinator habitats reduces waste water 
        runoff, and pollinator-friendly vegetation management 
        practices, including minimal use of pesticides, results in more 
        stable bee populations, benefiting farmers in the surrounding 
        area.
        
        
          Photo Credit: Pine Gate Renewables, North Carolina.
Solar Projects Can Improve Biodiversity
    Solar farms can support a greater diversity of plants as well as 
greater numbers of butterflies and bees, particularly under management 
which focuses on optimizing biodiversity when compared to equivalent 
agricultural land. This increase in plant and invertebrate availability 
may lead to more opportunities for foraging birds in terms of 
invertebrate prey and seed availability.\6\ When joint solar and 
vegetation designs are developed together, the benefits achieved can be 
maximized.\7\
---------------------------------------------------------------------------
    \6\ Montag, H., Parker, G., Clarkson, T. (April 2016). The Effects 
of Solar Farms on Local Biodiversity: A Comparative Study.
    \7\ Macknick, J., NREL (June 2016) Overview of opportunities for 
co-location of agriculture and solar PV.


          Photo: SouthHill Community Energy.
Solar Installations Could Be Win-Win-Win for Food, Water, and Renewable 
        Energy
    Responsible solar development could improve soil health, retain 
water, nurture native species, produce food, and provide even lower-
cost energy to local communities. The Department of Energy's (DOE) 
Innovative Site Preparation and Impact Reductions on the Environment 
(InSPIRE) project brings together researchers from DOE's National 
Renewable Energy Laboratory (NREL), Argonne National Laboratory, 
universities, local governments, environmental and clean energy groups, 
and industry partners to better understand how to maximize local 
benefits.\8\
---------------------------------------------------------------------------
    \8\ https://www.nrel.gov/news/features/2019/beneath-solar-panels-
the-seeds-of-opportunity-sprout.html and https://openei.org/wiki/
InSPIRE.
---------------------------------------------------------------------------
    At several InSPIRE sites, local beekeepers and university and 
national laboratory researchers are tracking their bees' visits to the 
pollinator-friendly vegetation under the solar panels. The goal is to 
determine how vegetation at solar sites can benefit insect populations 
and to understand the extent to which pollinator-friendly solar 
installations can boost crop yields at surrounding farms.

    The Chairman. Thank you.
    Next, we have Mr. Aberle. Please begin when you are ready.

    STATEMENT OF RANDY ABERLE, EXECUTIVE VICE PRESIDENT OF 
    AGRIBUSINESS AND CAPITAL MARKETS, AgCountry FARM CREDIT 
                      SERVICES, FARGO, ND

    Mr. Aberle. Mr. Chairman [inaudible]. Excuse me. Should I 
start over?
    Voice. Yes.
    Mr. Aberle. Excuse me. I will start over.
    Mr. Chairman, Ranking Member Fischbach, and other 
distinguished Members of this Subcommittee, thank you for 
calling this hearing today to discuss the renewable economy in 
rural America and allowing me to testify on behalf of AgCountry 
Farm Credit Services. My name is Randy Aberle. I am the 
Executive Vice President, Agribusiness and Capital Markets at 
AgCountry Farm Credit Services based in Fargo, North Dakota.
    AgCountry Farm Credit Services is a member of the Farm 
Credit System. We are a cooperative owned by our customers. We 
provide financing, crop insurance, and related services to more 
than 20,000 farmers, ranchers, agribusinesses, and rural 
homeowners in western Minnesota, eastern North Dakota, and 
central Wisconsin. We currently provide over $8 billion in 
loans through our 37 branch locations, and have nearly 600 
employees. AgCountry and our customer owners are deeply 
involved in the renewable economy in a variety of ways. 
Farmers, ranchers, and agribusinesses are some of the most 
creative and innovative people you will meet. AgCountry has 
been lending to the biofuels and alternative energy industries 
for over 2 decades. I have personally served as the lead lender 
in financing over 23 biofuel plants. Each of these plants are 
multi-million-dollar enterprises owned by farmers and rural 
entrepreneurs. We are financing projects that reduce carbon 
emissions at these plants, which meet the Low Carbon Fuel 
Standards of California. AgCountry is also financing 
investments to capture waste landfill gas to power biofuel 
plant operations. Similarly, dairy farmers are utilizing 
anaerobic digesters to capture methane from manure lagoons to 
produce renewable energy, electricity, and renewable natural 
gas.
    Beyond providing loans, we have shown support through 
sponsorships and regenerative agricultural research to improve 
the carbon footprint of agricultural production. AgCountry is 
currently in a public-private partnership with commodity and 
research groups, along with state funding, to finance crop 
research and a small-scale soybean crush facility in rural 
northwestern Minnesota. One goal of this project is to develop 
higher oilseed crops for use for feedstocks for renewable 
diesel and biodiesel production.
    The renewable economy offers great opportunities for 
farmers, ranchers, and agribusinesses, and AgCountry is 
prepared to support our customers as they seek these 
opportunities. Financing biofuels and other innovative 
approaches for farmers and ranchers can be challenging. The 
size, technology, and maturity of the business all impact how 
lenders can best support the effort.
    As lenders, we analyze different financial metrics when 
deciding on whether to finance a project. One of these metrics 
is recurring cash flows from operations. This measure helps 
determine if the project has the ability to repay the loan. 
Oftentimes, tax credits or incentives to invest in these types 
of projects are not enough to meet the required cash flow 
necessary to get these operations up and running to self-
sufficiency. Financing start-up businesses can be particularly 
complex and challenging, especially when new technology is 
involved. A project champion or sponsor needs access to 
financial capital, which may come from a venture capital 
partner, where both the risk and reward expectations are very 
high. Technology, processes, and products must be able to be 
replicated for broad acceptance in the financial markets.
    Congress could support new technology and start-ups by 
providing greater incentives, as well as more certain and 
predictable revenue streams for these capital investments to 
entrepreneurs or sponsors in order to cover start-up losses and 
loan repayment in the early phases of a project. Additional 
public-private partnerships can work with adequate grants and 
investments that provide liquidity until sustainable cash flows 
can be generated.
    From our own lending standpoint, we are doing everything 
that we can to make projects within the renewable economy work. 
AgCountry works with our customer borrowers to find reasonable 
solutions when plans do not materialize. As a farmer-owned 
cooperative, it is our mission to serve agriculture and rural 
America. These projects provide good paying jobs, new 
opportunities in our rural communities, and other potential 
revenue streams for farmers and entrepreneurs. Agriculture 
plays a vital role in environmental stewardship, and we believe 
farmers and ranchers are part of the solution to the climate 
challenges facing us today.
    Thank you again for calling this hearing, and I would be 
pleased to respond to your questions.
    [The prepared statement of Mr. Aberle follows:]

    Prepared Statement of Randy Aberle, Executive Vice President of 
   Agribusiness and Capital Markets, AgCountry Farm Credit Services, 
                               Fargo, ND
    Mr. Chairman, Ranking Member Fischbach, and other distinguished 
Members of the Subcommittee, thank you for calling this hearing today 
to discuss the renewable economy in rural communities and for allowing 
me to testify on behalf of AgCountry Farm Credit. My name is Randy 
Aberle, and I am Executive Vice President of Agribusiness and Capital 
Markets for AgCountry Farm Credit Services, based in Fargo, North 
Dakota.
    AgCountry Farm Credit Services is a financial cooperative providing 
financing, crop insurance and related services to more than 20,000 
farmers, ranchers, agribusinesses, and rural homeowners in eastern 
North Dakota, western Minnesota, and central Wisconsin. We provide more 
than $8 billion in loans through our 37 locations throughout our 
territory and have nearly 600 employees.
    We are a member-owned, locally-governed cooperative and a proud 
member of the Farm Credit System. Along with 70 other Farm Credit 
institutions, AgCountry shares a critical mission to support rural 
communities and agriculture with reliable, consistent credit and 
financial services, today and tomorrow.
    Farm Credit is a nationwide network of borrower-owned lending 
institutions that share a critical mission assigned to them by Congress 
a century ago. These independent institutions include four wholesale 
banks and 67 retail lending associations, all of which are 
cooperatively owned by their customers: farmers, ranchers, 
cooperatives, agribusinesses, rural utilities and others in rural 
America.
    Our mission is to ensure that rural communities and agriculture 
have a reliable, consistent source of financing irrespective of cycles 
in the economy or vagaries of the financial markets. Hundreds of 
thousands of farmers, agribusinesses and renewable energy producers 
around the country developed business plans this year knowing that Farm 
Credit has the financial strength to finance that plan and the strong 
desire and ability to help them succeed.
    Farm Credit's unique cooperative structure means that the customer-
owners who sit on our boards of directors are living, working, and 
raising their families in rural communities. They are deeply invested 
in the success of those communities and are interested in finding more 
ways for Farm Credit to contribute to that success.
    Farm Credit is committed to supporting a diverse agricultural and 
rural economy, which certainly includes the renewable energy sector. 
Our customers span a wide range of climate smart and renewable energy 
operations including renewable fuel producers, farm operations with 
methane digesters selling energy back to the grid, biomass projects, 
and operations which have incorporated wind and solar energy 
production.
    AgCountry and our customer-owners are deeply involved in the 
renewable economy in a variety of ways. Farmers, ranchers, and 
agribusinesses are some of the most creative and entrepreneurial people 
you will meet.
    AgCountry has been lending to the biofuels and alternative energy 
industries for over 2 decades. I have personally served as the lead 
lender on 23 biofuel plants. Each of these plants are multi-million-
dollar enterprises owned by farmers and rural entrepreneurs. We are 
financing projects that reduce carbon emissions at these renewable 
energy plants, which meet the Low Carbon Fuel Standards of California. 
AgCountry also is financing investments to capture waste landfill gas 
to power biofuel plant operations.
    Beyond providing loans, we have shown support through sponsorships 
in regenerative agricultural research to improve the carbon footprint 
of agriculture production. AgCountry is currently in a public-private 
partnership with commodity and research groups along with state funding 
to finance crop research and a small-scale soybean crush facility in 
rural northwestern Minnesota. One goal of this project is to develop 
higher oilseed crops for use as biofuel feedstock for renewable diesel 
and biodiesel production.
    The renewable economy offers great opportunities for farmers, 
ranchers, and agribusinesses and AgCountry is prepared to support our 
customers as they seek opportunities.
    Financing biofuels and other innovative approaches in the renewable 
economy can be challenging. The size, technology, and maturity of the 
business all impact on how lenders can best support the effort. 
[Profitability] in the sector can also vary greatly. For example, 
according to Iowa State University research, the average daily 
operating margin for U.S. fuel ethanol plants ranged from about 5 per 
gallon in June to over 40 per gallon in September.
    Based on AgCountry's past experience, some biofuel projects can 
cost anywhere between $30 to $100 million or more. Multiple lenders, 
investors, and others often are required and AgCountry partners closely 
with other Farm Credit lenders, commercial banks, and equity investors 
to provide the total financing package necessary while spreading the 
financial risk among many institutions.
    As lenders, we analyze different financial metrics when deciding on 
whether to fund a project. One of these metrics is recurring cash flows 
from operations. This measurement helps determine if a project has the 
ability to repay the loan. Oftentimes, the tax credits or incentives to 
invest in these types of projects are not enough to meet the required 
cash flow necessary to get these operations up and running to a level 
of self-sufficiency.
    Financing start-up businesses can be particularly complex and 
challenging, especially when new technology is involved. A project 
champion or sponsor needs access to financial capital, which may come 
from a venture capital partner where both the risk and reward 
expectations are high. Technology, processes, and products must be able 
to be replicated for broad acceptance in the financial markets.
    Congress could support new technology innovation and start-ups by 
providing incentives for capital investments to entrepreneurs or 
sponsors in order to cover startup losses and loan repayment in the 
early phase of a project. Additional public-private partnerships can 
work with adequate grants and investments that provide liquidity until 
sustainable cash flows can be generated.
    From our own lending standpoint, we are doing everything that we 
can to make projects within the renewable economy work. AgCountry is a 
patient lender that works with our customer-borrowers to find 
reasonable solutions when plans do not materialize. As a farmer-owned 
cooperative, it is our mission to serve agriculture and rural America. 
These projects provide good paying jobs, new opportunities to our rural 
communities, and another potential revenue stream for farmers and 
entrepreneurs.
    Farm Credit is proud to serve as the financial partner to many of 
the nation's rural electric cooperatives and other rural power 
providers, many of which are making forward looking investments in 
renewable sources of energy. Farm Credit is working with rural 
communities and entrepreneurs across the nation to find additional 
opportunities to support the renewable energy industry.
    As the Federal Government continues to find ways to grow this part 
of the agricultural economy, we firmly believe policies rooted in 
voluntary, science-, and incentive-based principles will spur growth in 
the agriculture industry and will ensure Farm Credit is able to best 
serve its current and future customers. We would also emphasize that 
government programs need to be transparent and income streams from them 
need to be predictable and certain, so lenders can include them in 
calculations to support loan making.
    Thank you again for calling this important hearing. I would be 
pleased to respond to your questions.

    The Chairman. Thank you, sir.
    At this time, Members will be recognized for questions in 
order of seniority, alternating between Majority and Minority 
Members. You will be recognized for 5 minutes each in order to 
allow us to get to as many questions as possible. Please keep 
your microphones muted until you are recognized in order to 
minimize background noise.
    I recognize myself for 5 minutes.
    I want to direct my questions to Ms. Stolzenburg. You spoke 
about rural communities lacking the resources to proactively 
identify locations with the right conditions for renewable 
energy facilities, which I think is a very important point to 
focus on. I introduced the Rebuild Rural America Act (H.R. 
2361) with my colleagues, Reps. Bustos, Craig, and Spanberger, 
to provide consistent, flexible use funding to rural 
communities for locally tailored needs. This type of funding 
could be used, I believe, for planning for renewable energy 
multi-use solar development and more. I do agree it is critical 
that Congress provide resources to empower rural communities 
for projects that meet their needs.
    In your testimony, you talked about the critical need for 
good planning, and you highlighted that there are models that 
exist for this effort. Could you elaborate a bit more on those 
models, and then as a follow-up, I would be interested to know 
how we could better promote, from your vantage point, those 
models.
    Ms. Stolzenburg. Sure, thank you.
    So, the models really are based on use of tried and true 
comprehensive planning methods, which are grassroots programs 
that involve the community in understanding and identifying 
their values and--but the technology part of it is usually a 
geographic information system where we use mapped information 
to look at all of the resources in a community, from slope to 
wetlands and streams to prime agricultural soil, and using that 
technology, you can very easily identify and then apply 
criteria that, say, a solar facility might need to identify 
potential locations that address community identified features, 
as well as the facility identified features. And then through 
the comprehensive planning process, work with the community to 
identify locations that, again, meet that variety of local 
needs.
    So, I think that it is both a planning model and the GIS-
based model.
    The Chairman. Thank you, and in terms of our ability at the 
Federal level to promote and/or provide resources and funding 
for these types of efforts, are you aware of any current 
Federal programs that have been utilized or can be utilized for 
these sorts of efforts?
    Ms. Stolzenburg. Not that I am aware of at the very local 
level. It is a huge need. Communities want to do planning and 
there are very few resources to help them gain the skills or 
the staff or the ability to get them done. So, I am not aware 
of a program at the national level that can help do that.
    The Chairman. And separate and apart from potential funding 
sources, are there any other ways in which the Federal 
Government can support new renewable projects and new market 
opportunities for farmers?
    Ms. Stolzenburg. Well, as I mentioned, I think the 
agrivoltaics is a great example of something that can mesh 
renewable energy and opportunities for new types of 
agriculture. In my experiences, they have been resisted by the 
solar developers, at least around here, but there are lots of 
opportunities to mesh that, and that would grow community 
acceptance if it was contributing to the local food systems.
    The Chairman. All right. Thank you very much. I yield back.
    Next, we are going to go to, I believe, Mrs. Fischbach, 
Ranking Member Fischbach.
    Mrs. Fischbach. Thank you, Mr. Chairman, and I appreciate 
all of the testimony. I have taken a lot of notes, so I 
appreciate the opportunity.
    Mr. Aberle, in your testimony you mentioned a project that 
you have been working on in northwestern Minnesota. I think I 
might know the project you are talking about. It is in my 
district. Could you talk a little bit further about the project 
and how does this project, and by extension AgCountry and the 
other sponsors, impact the renewable economy as well as the 
surrounding area economy?
    Mr. Aberle. Well, thank you, Congresswoman Fischbach. I 
would be happy to respond to that.
    This project in northwest Minnesota gives the local region 
an opportunity to add value-added agriculture through continued 
research to develop the additional soy bioproducts that our 
representative from the Missouri Soybean testified to. As they 
develop more and many uses of the soybean, it is able to 
generate more revenue in local communities, providing jobs and 
more revenue sources for the area producers.
    Specific to that region, there is a need to produce higher 
protein and higher oil soybeans for the markets for both the 
food-based product and for feedstocks for biofuel and renewable 
diesel. And so, this was an opportunity for our cooperative 
lending structure to utilize our core values and be responsible 
to each other and our cooperative, caring for ag and rural 
America, and play our role as a lender for this project through 
a collaboration with commodity research groups and commodity 
groups, along with state funding to get a project up and 
running, to continue this required research to get the 
commercial scale production on new products.
    Mrs. Fischbach. Well, thank you very much, and I do know 
that that is quite a collaborative project. There are a lot of 
folks who came together, including AgCountry, to move that 
project along. So, I appreciate your involvement in that 
project, I only have about 3 minutes left.
    Ms. Skor, in your written testimony, you listed data on 
state level economic impacts of the biofuel industry, and 
Minnesota was near the top. The lion's share of that impact 
comes from my district.
    I am interested in your mention of the uncertainty as a 
result of the lack of year-round E15, and delayed RVOs from the 
EPA. Can you speak to the effects that that uncertainty would 
have on future development and investment in the industry?
    Ms. Skor. Certainly, Congresswoman. Thank you for the 
question.
    As you well know, in the height of the pandemic, half of 
our industry was offline because of the drop in fuel demand. We 
are still getting our footing back as an industry. What we need 
is market stability and certainty, and strong signals. The 
Renewable Fuel Standard, as passed and intended by Congress, 
forces more blending of renewable biofuel into our fuel supply 
every year. We need those requirements to be set and upheld by 
EPA. Consumers should have year-round access to a low-cost, 
low-carbon fuel, E15, year-round. When we have year-round 
access to E15, when we have a Renewable Fuel Standard upheld as 
Congress intended, that is how we start to unleash the power of 
biofuels. That is how we become, yet again, a thriving economy 
that can, in turn, make the capital investments required for 
continued de-carbonization of our fuel and our ability to 
diversify the markets that we can play in, and including 
potentially sustainable aviation fuel.
    Mrs. Fischbach. Thank you very much.
    Mr. Aberle, can you speak to the effect that this 
uncertainty has from the financing perspective of it?
    Mr. Aberle. Yes, whenever there is a certain uncertainty 
and unpredictability to the cash flows of these companies, is 
always a concern for lenders for us to provide the stability of 
credit facilities to these ongoing businesses. And when those 
cash flows are then disrupted through policies and other 
uncontrollables, these companies have to react and sometimes, 
as was the case during the pandemic when they lost a lot of 
market share and they had to shut down production, it did 
disrupt the jobs and the business, and it made bankers more 
cautious about lending into this space in the future.
    Mrs. Fischbach. Thank you very much, and I will yield back 
my 20 seconds, Mr. Chairman. Thank you.
    The Chairman. Thank you.
    Mrs. Fischbach. And thank you both for your answers.
    The Chairman. Thank you.
    I now recognize Representative Axne for 5 minutes.
    Mrs. Axne. Thank you, Chairman Delgado, and as we work on 
solutions to address the climate crisis, it is absolutely 
imperative that we utilize the tools that we have in rural 
America, and we take full advantage of the opportunities there 
to not just support our climate, but of course, our farmers. 
So, thank you for holding this hearing today.
    And then, of course, one of our best solutions we have is 
the use of biofuels in our transportation sector. Biofuels, of 
course, support good paying jobs in our rural communities. It 
is a robust market for our farmers, and of course, addresses 
climate issues that we are facing.
    So, I am thrilled to see that in the Build Back Better Act 
(H.R. 5376), my amendment, the one that provides for $1 billion 
towards the expansion of infrastructure for biofuels across 
this country, will help not just Iowans, but Americans.
    So, Ms. Skor, my question first is to you, and thank you so 
much for being here and lending your expertise to the 
Committee.
    As Congress debates the Build Back Better Act this week, 
what kind of benefits can we expect from the billion-dollar 
investment in biofuels infrastructure within the bill itself?
    Ms. Skor. Congresswoman, thank you so much for all of your 
work to make sure that that infrastructure funding is included 
in the Build Back Better Act. As you well know, this would be 
the largest investment in higher blend infrastructure we have 
seen to date. It really would unleash the power of biofuels. It 
gives us the ability to work with our retail partners to 
accelerate the market inclusion of E15, which is a lower cost, 
lower carbon, higher value fuel choice for consumers. So, this 
is an unprecedented, wonderful opportunity for biofuels. It is 
great for American drivers, and it is certainly great for the 
rural economy.
    Mrs. Axne. Thank you for that, and I am looking forward to 
the Build Back Better Act getting put into law, and I sure hope 
that all my colleagues who are here today vote for it, because 
it is $1 billion in biofuels that we are talking about directly 
here.
    Of course, another top priority for me is making sure that 
we get E15 year-round. We just talked about that a little bit, 
and as you know, earlier this year, a court case struck down 
the EPA's authority that had allowed year-round E15. I am very 
thankful for my colleague, Angie Craig, and her legislation to 
fix this issue to make clear that the EPA has the authority. 
That is legislation that I helped introduce.
    And once again, we talked a little bit about uncertainty 
earlier in the previous question, Ms. Skor, but if we don't 
address this issue of EPA year-round and pass our legislation 
to allow year-round E15, how is that going to impact sales and 
the market opportunities for farmers?
    Ms. Skor. Well, I appreciate the question, and again, thank 
you for your support for year-round E15.
    We agree this is a misguided court decision, and 
unfortunately, next summer--E15 is sold across 30 states. 85 
percent of those retail locations will not be able to offer, 
for 3\1/2\ months next year, their consumers a lower cost, 
higher value fuel. E15 averages about 5 to 10 per gallon less 
than standard 87 fuel. It is a higher octane. It is cleaner 
burning. It is better for the pocketbook. So, this is something 
that we have to rectify. We appreciate your support, 
absolutely. We cannot realize the full potential of low-carbon 
renewable fuels without year-round access to E15.
    Mrs. Axne. Well, thank you, and those are some sobering 
numbers that we all need to be keeping in mind here.
    I am also absolutely concerned that reduction of these E15 
goals would impact our climate goals, they run in tandem. 
Earlier this year, a Harvard study concluded that corn ethanol 
reduces greenhouse gas emissions by nearly 50 percent compared 
to gasoline, all while being produced, of course, by our great 
farmers and communities across this country who support those 
economies.
    So, my last question to you, Ms. Skor, is as we look for 
ways to de-carbonize, how can we utilize biofuels both 
domestically and internationally to take full advantage of 
carbon benefits?
    Ms. Skor. There are so many ways that we can better utilize 
biofuels, and as you said, we cut carbon emissions in half 
relative to gasoline today, and with technologies that are 
available today, we can become as an industry net-zero in terms 
of our carbon emissions.
    We need strong policy signals to show that there is a 
marketplace and a growth opportunity. We need a strong 
Renewable Fuel Standard that blends 15 billion gallons of 
biofuel, of corn ethanol, every year into our fuel supply. We 
need year-round access to E15. We need infrastructure 
investments in terms of to allow for higher blends to be sold 
in 50 states across the nation. And importantly, as the 
discussion in our carbon-focused world continues, we need to 
make sure that the carbon modeling and the measuring stick is 
fair, it reflects up-to-date science, and it accurately 
accounts for all of the innovation taking place at the plants 
and on the farms.
    Mrs. Axne. Well, you summed it up so well. We have 8 
seconds left here, but thank you so much.
    I want to continue to work with all of my colleagues here 
as we advance biofuels across the country to help our farmers 
and address climate change. I appreciate it.
    The Chairman. I now recognize Rep. Thompson for 5 minutes.
    I now recognize Mr. Scott.
    Mr. Austin Scott of Georgia. Thank you, Chairman Delgado, 
and I am going to focus my questions for Mr. Pratt, because his 
testimony highlights one of my primary concerns as we work to 
find the balance here on the economy, the environment, and 
especially rural Georgia.
    Your testimony highlights the majority of the land area 
ideal for solar energy facilities in Georgia, my home state, is 
rooted in rural agriculture and that some communities have been 
challenged to find a balance between the competing interests of 
solar land use and traditional farming. And, I include forestry 
in that definition of farming. I am sure you are familiar with 
the project in south Houston County where approximately 800 
acres of forestland was clear cut that provided a tremendous 
amount of wildlife habitat, that is no longer there.
    My concern is that if we take the most fertile soil out 
there and whether it be forestland or whether it be farmland, 
and we convert that into solar fields, what the net impact of 
using that more fertile land is for solar fields versus less 
fertile land?
    And so, can you speak a little more about the balance and 
the need to find less fertile land instead of more fertile land 
to put the solar fields on?
    Mr. Pratt. Yes, sir. Thank you, Representative Scott. I 
think that is an excellent question, and I appreciate your 
service to Georgians.
    I would say that there is--when you look at energy in 
general that we use, there is no free lunch. There are always 
tradeoffs in producing energy and environmental impacts, and 
that doesn't--solar is included in that, as you point out, the 
clear cutting of trees. The fact is, we cannot generate solar 
energy with shade. You have to have clear location to the sun.
    I will say that we work hard to mitigate those efforts, in 
Georgia at least, through one of the other testimonies that 
said--and that is through agrivoltaics. And that really is 
bringing farm and bio-mimicry back to the land that occurred 
there before, and that is through--we have thousands and 
thousands of sheep on our farms, solar farms, going forward in 
the future. That is not the same as forestland, but it is a 
crop and it is a financial benefit for agriculture, and we hope 
to find those right balances and work really hard to do so.
    Mr. Austin Scott of Georgia. Okay. You touched on some of 
the supply chain disruptions. That is obviously another issue 
that I remain extremely concerned about, and I think that 
everybody on the Committee, regardless of party, is concerned 
about.
    From the production of the solar energy and the other 
things that you are directly involved in, can you speak to the 
biggest issues for this subject about your primary concerns 
with regard to supply chains and what you are seeing right now 
with regard to the construction and development of solar 
panels, solar fields, and the other areas you are working in?
    Mr. Pratt. Yes, sir. Those are extremely challenging areas 
for solar and other aspects of the utility business across the 
country. For solar specifically, most of the solar panels--the 
components are produced outside of the United States, and much 
of that is in China and some of the regulations and the supply 
chain issues associated with that country are creating 
bottlenecks to receive the materials that we need to propagate 
more solar in the United States.
    But it goes beyond that. It is transwire. It is 
substations. It is equipment that is fundamental not only to 
solar, but to the rest of the electrical infrastructure as 
well. Bucket trucks, 3 years to receive a bucket truck 
[inaudible]. So, all those things are very important.
    Mr. Austin Scott of Georgia. Okay. My time has almost 
expired, but I appreciate you, Mr. Pratt. It does bother me to 
see so much wildlife habitat destroyed in the name of, if you 
will, the environment, and I do think that we need--if we are 
talking about environmental policy, we need to be looking at it 
from a whole, not from a piecemeal standpoint. And so, when you 
tear down all that forestland, you have water, you have 
wildlife habitat, you have a lot of area issues that that 
forestland is very, very good for. And when you get rid of it 
to replace it with solar panels, I think we would be better 
served if we were focusing on less fertile soils in areas that 
we put those fields.
    So, thank you for your time.
    The Chairman. I now recognize Representative Rush for 5 
minutes.
    Mr. Rush. I want to thank you, Mr. Chairman. I was 
delighted, Mr. Chairman, that not one but two of our witnesses 
today are from cooperatives. I believe that co-ops are critical 
to putting resources directly into the hands of [inaudible] 
population and that a firm belief must further confirm your 
testimony today.
    While cooperatives are empowering, they are unfortunately 
underutilized. To that end, Mr. Pratt and Mr. Aberle, how do we 
encourage the use of cooperatives, and specifically given the 
sharp decline in the number of African American farmers, how do 
we do so in areas with large minority populations? And further, 
have you given, both of you, any thought to how we may marry a 
cooperative-type approach to both rural and urban ag?
    Mr. Pratt. Representative, this is Jeff Pratt. I will make 
a couple comments, and then pass it on to Mr. Aberle.
    First, thank you for your question. Much of rural Georgia 
is impoverished and challenged, and much of the investment we 
are putting into those local communities provides very 
important tax revenue for those local governments. So, we are 
very glad to make that happen.
    I will say that as far as marrying the urban and suburban 
and rural areas, much of the energy that is produced in those 
rural areas from these solar facilities, in my example, is 
actually transmitted cost effectively to the more urban areas 
where there are also African American communities that benefit 
from that as well.
    When you think of cooperatives in general, I would say that 
cooperatives are engaged in those local communities. They are 
owned and governed by the citizens that are in those 
communities, so land use and diversity are very important, and 
we take great pride to make sure those work.
    Thank you, sir.
    Mr. Rush. Thank you.
    Mr. Aberle, do you have any comments?
    Mr. Aberle. I would just add a few comments from our 
perspective.
    One of our core values at our cooperative is that we 
advocate for our customers. And so, if there is a need out 
there in these rural communities, being able to serve 
agriculture and rural America is one of our core values and our 
mission out here, and we are very purposeful about that. So, if 
there is a need from a group of producers or farmers that have 
a common vision, we do try to care for ag and rural America, 
and try to advocate for them to meet their business goals.
    And so, as a lender, we can only play a certain role, but 
as these groups get together and have a common vision, we 
certainly try to provide a pathway for them to meet their 
objectives and to serve that community.
    Mr. Rush. Thank you.
    Mr. Chairman, with that, I yield back the balance of my 
time.
    The Chairman. Thank you, Representative Rush.
    I now recognize Representative LaMalfa for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman. I would like to 
direct this towards Mr. Pratt with the issue with generating 
electricity via renewables.
    So, I come from northern California where we have burned 
millions of acres of forests over the last few years, and so, 
we have this material out there that already exists. We don't 
have to grow it. It grows on its own pretty much, especially 
when you look at 4 decades or so of nonmanagement of Federal 
lands, forestlands. We have approximately 170 million dead 
trees that aren't--you don't count in the burned trees in the 
state due to drought and insect infestation, and overcrowding 
of the forestlands.
    So, what I am getting at is we have a lot of material out 
there that needs to find a home, a much better home than 
burning it via accidental forest fires, or even slash burning 
when it does get around to getting managed. So, what I am 
speaking of is having this material moved to a good end-use, 
such as generating electricity in a biomass plant. I wish we 
had much more of that in California. I wish we had a friendlier 
attitude towards it.
    Mr. Pratt, what is your experience with the southern states 
also have vast forested areas and much crop that is taken off 
of them, and much that is converted into chip product of the 
waste material. We are not talking saw logs. We want to cut saw 
logs, too, because we need lumber. We need paper products as a 
byproduct. But we have a lot of material that isn't good for 
anything else other than either letting it burn in a forest 
fire or doing controlled burns, which is only a little better, 
in some cases than as far as the smoke and CO2 
output and such. Please talk to us about the ability to convert 
more of this material into biomass and produce electricity, and 
have that be a green energy source.
    Mr. Pratt. Thank you very much, Representative for that 
comment--or that question. That is a very good one, especially 
for Georgia, which has one of the largest harvestable timber 
crops in the country.
    We do have a waste wood facility that burns waste wood, and 
much as you said, insect problems or the waste slash that 
results from forestry, and we burn at that facility in a boiler 
that creates renewable energy. There have been some questions 
about how green that method is. I would say that we believe it 
is quite renewable, and the reason is that when this forest 
product, as you mention, waste and slash lays in the forest, it 
decomposes and creates methane. Methane is 20 to 50 times more 
harmful to the environment than carbon dioxide. So, when we 
gather that waste and burn it in a way that creates energy and 
usable energy, we are also reducing methane to carbon dioxide, 
which is 20 times better, and gaining some electricity from 
that that will offset the petroleum-based generation as well.
    So, I think it is a very helpful project, and something we 
ought to fully consider.
    Mr. LaMalfa. You make a great point on that. A rotting 
forest is creating--or any rotting organic material is creating 
methane, whereas you can control that situation when you are 
burning in a controlled high heat situation with very, very low 
output. So, it ought to be looked at as a very green way of 
making electricity, because the other ways also have their 
costs of environmental purpose as well, when you are talking 
solar panels requiring mining of rare earths and materials like 
that. Everything has a cost to it, and that is what isn't 
acknowledged around here in the argument in the way it is 
looked at environmentally. And so, when we have--in my home 
state and yours, it sounds like too, we have already so much 
material that needs to be moved out of there to have a 
sustainable healthy forest situation, one that is drought-
proof, insect-proof, and we need to be doing this yesterday.
    So, Mr. Pratt, how friendly is Georgia towards looking at 
this material as a good source of electricity, and that it is a 
green way of doing so?
    Mr. Pratt. It is friendly towards that, Georgia is, but it 
is also challenged because it is not as cost effective as solar 
in this case. I agree with you that looking at the whole 
economic picture is very important----
    Mr. LaMalfa. Let me jump in on that. Cost effectiveness is 
very important, because we spend billions putting fires out in 
the West. We spend a lot also on the alternatives as well for 
green power. They are not cheap. None of these sources are 
cheap, but we have a material that will provide jobs in our 
backyard for the loggers, for the truckers and taking that 
material that is now a waste product, that is now a methane-
producing product, as you mentioned, and one that is harming 
our air quality, our water quality, when the ash and such 
washes into our system, in our streams and rivers and lakes in 
California.
    So, when you add up the whole spectrum of environmental 
cost, you are looking at an issue that is very, very expensive 
versus the subsidies that it would require to take the material 
from long distance to a power plant somewhere. I think the 
offset of that to the Forest Service, towards all those other 
things when you put it all up, put it on a point scale system 
there, you get a big win out of this.
    So, I appreciate the time, and I yield back, Mr. Chairman.
    The Chairman. Thank you.
    I now recognize Representative Bustos for 5 minutes.
    Mrs. Bustos. Thank you, Mr. Chairman, and thanks for 
holding this hearing today, and also thanks to our Ranking 
Member.
    I am so excited about the opportunities for rural America 
and the role that we are going to be able to play and are 
playing already in clean energy. I really appreciate our 
witnesses here today who are testifying before us about how are 
we going to be able to execute on this successfully.
    Let me start with biofuels. Obviously, the issue of climate 
rescue is perhaps the most pressing task of our time. It is a 
challenge that will require us to use every tool at our 
disposal. One of those tools, I am very proud to say, is corn 
ethanol, and it is a fuel that we know can cut carbon emissions 
in half, in half, compared to traditional gasoline. And the 
Congressional district that I serve in central and western and 
northern Illinois, we have seven biofuel plants in and around 
this district. We grow a little bit more than 1\1/2\ million 
acres of corn every year. It is critical that we protect the 
jobs that this creates, the livelihoods in rural America, and 
that we put biofuels on a level playing field with the other 
renewable fuels.
    And as we continue to talk about the climate and we forge 
ahead, we can continue talking about new and innovative 
technologies, like sustainable aviation fuel, and how that will 
be a strong--and really, the need for a strong and unified 
model across sectors and how we calculate carbon emissions.
    Let me start with my question for Ms. Skor, in your 
testimony, you mentioned that the Department of Energy's GREET 
model--I think you all know that that stands for Greenhouse 
Gases, Regulated Emissions, and Energy Use in Technologies. But 
that GREET model, how that is a leading-edge model for 
measuring the carbon intensities of different fuels.
    Would you please expand on how a unified model like GREET 
would be beneficial to driving down carbon emissions in a 
meaningful way, and specifically when it comes to biofuels 
policy in the motor vehicle and aviation sectors?
    Ms. Skor. Absolutely. Making sure that a model used to 
account for our carbon intensity accurately reflects in real 
time the most up-to-date innovations is critically important.
    As you stated, the Department of Energy and Argonne 
National Laboratory through their GREET model, that is really 
the gold standard in terms of carbon modeling right now. It is 
updated every year. It has the most robust set of agricultural 
inputs to truly account for all of the practices and 
innovations taking place. And so, we need to use that modeling, 
whether we are talking about the RFS, EPA hasn't updated its 
modeling in 10 years, and also very importantly, on sustainable 
aviation fuel, we need accurate modeling to make sure that we 
are competitive in the marketplace and we are eligible to 
compete for these new markets like sustainable aviation fuel.
    Right now in the proposed Build Back Better legislation, 
the legislation is putting U.S. tax incentives based on a UN 
modeling agency, a modeling that they haven't updated in 10 
years, and it is woefully inadequate relative to GREET. So, we 
very much encourage and support the use of GREET as a gold 
standard for all decisions on our ability to compete in the 
marketplace and to be eligible. That is what we need to be able 
to be a thriving industry, and to further reduce the intensity 
of our fuel and broaden the amount of markets we are eligible 
to compete in.
    Mrs. Bustos. All right. Thank you, Ms. Skor.
    Let me use my remaining minute and 15 seconds to shift to 
the electricity sector, and how renewables can make an impact 
in rural America.
    So, rural electric co-ops all around the Congressional 
district I serve, whether it is Joe Carroll Energy or Spoon 
River Co-op, serve tens of thousands of our community members 
with reliable and affordable power.
    Mr. Pratt, the Build Back Better Act would allocate nearly 
$10 billion for rural electric co-ops to reduce fossil fuel-
related debt and invest in clean sources of electricity. What 
would that mean for your cooperative and others like it across 
the country, and what technologies would that help unlock for 
your organization?
    Mr. Pratt. So, it would help buy down debt and stranded 
costs that potentially could result from mandates and 
requirements that might be required. It would also help us 
invest in clean energy technology, and it would help us look at 
mitigating the unintended consequences from some of this, which 
is batteries and other investments that are required to bring 
more intermittent resources onto the grid.
    Mrs. Bustos. All right. I am out of time, and with that, I 
will yield back. Thank you very much to both of those witnesses 
who answered my questions. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    I now recognize Representative Balderson for 5 minutes.
    Mr. Balderson. Thank you, Mr. Chairman, and thank you for 
the folks that are here speaking today. I appreciate you taking 
questions.
    My first question is for Mr. Wheeler. Mr. Wheeler, the 
United States currently produces just under 1 billion gallons 
of renewable diesel annually. The Energy Information Agency 
announced this past summer that domestic production of 
renewable diesel could reach 5 billion gallons annually by 
2024. Currently, \1/3\ of soybean oil production in the United 
States is used toward biofuels, roughly 8.8 billion pounds. If 
renewable diesel production estimates from the EIA hold true 
and we see production multiply five times within a few years, I 
would assume the demand for soy oil will increase in a similar 
fashion.
    How is your industry preparing for this possible surge in 
demand? And my follow up to that would be do you think this 
demand will have an adverse impact on other soybean oil 
applications?
    Mr. Wheeler. Thank you, Congressman.
    Well, definitely here in the Midwest, we continue to expand 
our crush capacity, not just in Missouri, but definitely in the 
states that surround us. We have several that are going into 
Iowa. We are looking at two here in Missouri, and then there 
are other states as well that are looking at it into the 
Southeast as well.
    As far as when it comes to meeting the demand, as farmers, 
we continue to try to build this out, and protect our current 
infrastructure within the biodiesel industry. There is 
definitely going to be enough production as far as when it 
comes to soybean and the soybean oil, and we are here to stand 
and support it.
    Mr. Balderson. Thank you very much.
    My next question is for Ms. Skor, and I would like to shift 
gears to ethanol. As you know, the United States is the largest 
global producer of ethanol, producing 56 percent of the world's 
ethanol. In your testimony, you mentioned the future of 
domestic ethanol production, and how the international market 
will play an important role in that. Can you elaborate more on 
the importance of having a Chief Agricultural Negotiator who 
works on behalf of American agriculture producers and 
processors, and why this position is so important to ethanol 
producers?
    Ms. Skor. There is a growing demand for low-carbon 
renewable fuels, not just domestically but globally as well, 
and I appreciate the question.
    Typically, we export about ten percent of our product. 
Right now, Canada is actually our largest trading partner for 
ethanol. So, it is incredibly important that we as an industry 
continue to be able to grow, to provide our product not only to 
domestic supply as we look toward higher blends nationwide, but 
also in other countries that are looking to build their rural 
economies, keep gas prices affordable, and make sure that they 
can achieve their climate goals. And again, the solution for 
all of that, cleaner air, more affordable fuel choices, and 
boosting rural economies is going to be greater use of ethanol.
    Mr. Balderson. Thank you.
    My next question is for Ms. Bowman. I thank you also for 
being here.
    You mentioned in your testimony the NAICS code which was 
required for biobased products in the 2018 Farm Bill has yet to 
be promulgated. Do you know why this is?
    Ms. Bowman. We have been working with the various 
stakeholders in the Administration who are working on this 
issue. It is extremely important for this to move forward. 
Biobased products manufacturing is really lumped into broader 
manufacturing, so you are not able to see trends. You are not 
able to see market growth, where investment is needed. So, we 
would really call on Congress to work with OMB, USDA, and 
Commerce to get the farm bill mandate moved forward.
    Mr. Balderson. Okay, and is this an issue that the USDA can 
solve on its own?
    Ms. Bowman. I believe not on its own. USDA needs to work 
with Commerce, OMB is also involved. They oversee the 
interagency committee that considers all of the recommended 
changes to the NAICS code, so I think all of those agencies are 
critical to moving this forward.
    Mr. Balderson. Okay, thank you very much.
    Mr. Chairman, I yield back my remaining time. Thank you 
all.
    The Chairman. Thank you, and I recognize Representative 
Craig for 5 minutes.
    Ms. Craig. Thank you so much, Mr. Chairman, and thank you, 
Ranking Member Fischbach, my fellow Minnesotan, for focusing on 
energy in rural America. Thank you so much to our witnesses 
here this morning.
    I want to focus my questions today on biofuels and the role 
that they can play in helping to build our rural communities 
and the pocketbooks of hardworking Americans. Right now when I 
am back in my district, I am hearing a lot about supply chain 
shortages and higher gas and energy prices, in addition to 
increases in the price of groceries and other goods. I am also 
hearing from farmers who are wondering about all of these 
rumors swirling about the RVOs and that the Administration is 
considering. They thought they could expect robust numbers, not 
more relief for refiners. And I am wondering the same thing 
myself, actually.
    It is clear to me, especially after hearing the testimony 
from Ms. Skor and Mr. Wheeler, that we need to be investing 
more in the biofuels industry right now as we seek to address 
energy costs. Ethanol and biodiesel blends have traditionally 
saved money for consumers at the pump, as cheaper, cleaner 
burning fuel options, and they drive rural investment, which 
means more and better paying jobs in rural communities.
    But biofuels are also subject to policy decisions, just 
like the other fuel sources that Americans rely on. So, I would 
like to focus on the policy decisions in front of us now. 
First, the Administration should immediately issue robust RVO 
numbers for 2022. This delay has gone on for far too long. 
Second, we should make E15 available year-round across the 
country. Ms. Skor, thank you for mentioning my bill in your 
opening remarks, the Year-Round Fuel Choice Act of 2021 (H.R. 
4410), and this should be passed as soon as possible by this 
Congress. And I am glad you also mentioned the $1 billion in 
biofuels infrastructure, which I believe is so critical in the 
Build Back Better Act. Cindy Axne, my great colleague from 
Iowa, and I have been leading the fight to extend the biodiesel 
tax credit through 2026, and I think we have to move 
immediately.
    Because with gas and energy costs rising, we would be fools 
not to address the roles that biofuels can play in reducing 
price pressures for Americans across the country.
    With that in mind, I would like to turn to Ms. Skor for the 
first question.
    In your written testimony, you included a chart that 
demonstrated clearly that RIN prices are not correlated with 
gas prices, which is an argument that we often hear from fossil 
fuel companies. With that in mind, can you speak to the role 
that biofuels play in placing downward pressure on gas prices 
and helping Americans save money on fuel and energy costs?
    Ms. Skor. Absolutely, Congresswoman, and you mentioned the 
two things that are going to help us reduce the price of fuel 
for consumers, a strong Renewable Fuel Standard, and year-round 
sales of E15. The more biofuel we blend, the greater our 
ability to reduce gas prices. This year, according to the EIA, 
the retail price of gasoline in average has gone up by $1 per 
gallon. That is a hard hit for working Americans in all 50 
states. So, with a strong Renewable Fuel Standard that 
encourages and really requires more blending of low-cost 
biofuels with year-round sales of E15, that is how we can 
really support drivers and make sure that we are managing fuel 
costs appropriately.
    Ms. Craig. Let me just follow up your view moving forward 
with the regulatory certainty that would come from year-round 
sales of E15. How would the industry be ready and poised to 
provide renewable fuels across the country?
    Ms. Skor. We are absolutely ready and poised to do that 
now. In fact, we have had 3 summers of year-round E15. 
Consumers have already driven 25 billion miles on this fuel. It 
is a fantastic fuel. It is a great value for the consumers. We 
simply need to return back to the marketplace that we had for 
the past 3 years. We are absolutely ready and able, and 
retailers too are anxious to be able to offer this choice to 
their consumers.
    Ms. Craig. Thank you so much for your perspective, Ms. 
Skor, and your comments really do help highlight the important 
role that biofuels play in today's renewable energy economy as 
we look to alternatives to traditional fossil fuels.
    As you know, I am leading that Year-Round Fuel Choice Act 
to make sure that access to E15 for all the reasons that you 
talked about, to lower the cost at the pump, decrease the 
carbon intensity of our transportation sector, and support 
family farmers and the biofuels sector. I will continue to 
focus on the role that they play in the renewable economy of 
rural America.
    Thank you so much, Mr. Chairman, and I yield back.
    The Chairman. Thank you, and I recognize Representative 
Feenstra for 5 minutes.
    Mr. Feenstra. Thank you, Chairman Delgado and Ranking 
Member Fischbach.
    My district leads the nation in biofuel production, making 
it a pillar for Iowa's rural economy. According to the 2021 
report from the Iowa Renewable Fuels Association, Iowa produced 
3.7 billion gallons of ethanol and 351 million gallons of 
biodiesel in 2020 alone. Additionally, the industry supports 
over 40,000 jobs. Ensuring that our biofuel producers are 
prioritized through strong renewable volume obligations, RVOs, 
levels is not only critical for the industry but it is also my 
many constituents who engage with the economy built on its 
success.
    Ms. Skor, how has a lack of the RVO announcement inhibited 
the biofuels industry?
    Ms. Skor. Thank you for the question, Congressman.
    As I mentioned, we are still in the mode of recovering and 
getting back on the road to recovery from COVID, at a point 
when our fuel demand nationwide was cut in half. And so, we 
absolutely need some certainty and stability and clarity in 
terms of the marketplace opportunities. This is required not 
only for us to get fully back on our feet, but for then in turn 
for us to have the capital investment required to continue R&D 
so we can continue to de-carbonize our fuel and diversify the 
co-products that we are able to provide across America.
    Mr. Feenstra. Ms. Skor, can you share your vision on how 
biofuel production and the use fits into the future clean 
energy format?
    Ms. Skor. We are already an active participant in our 
nation's climate strategy, I would say. The State of California 
with its Low Carbon Fuel Standard, biofuels account for 80 
percent of the credits in California's Low Carbon Fuel 
Standard. So, we are a low-carbon renewable fuel plant-based 
homegrown here in the U.S. We have the ability to do so much 
more by use of higher blends nationwide to make sure that we 
have modeling that accurately reflects all of the innovations 
taking place on the farm and at the plant. So, we have the 
ability to make sure that the 270 million cars on the road 
today are using a low-carbon fuel, and with a strong industry, 
we can also do the R&D to expand into hard to electrify spaces 
like sustainable aviation fuel.
    Mr. Feenstra. I am glad to hear that, Ms. Skor. Thank you 
for those comments. I believe exactly what you said, the future 
of biofuels and renewable energy is strong, and we are hearing 
today through these testimonies that this is the case. And as 
you noted, Biojet Fuel Research Act (H.R. 5620) that I am 
working on would create a working group to analyze the future 
of sustainable aviation fuel, very important.
    I have another area. As the renewable economy grows, it is 
important that the Federal Government provide updated and 
accurate data on lifecycle emissions, such as through the GREET 
model.
    Ms. Skor, are there any changes to the GREET model that we 
would benefit from or that the biofuels industry should know 
about?
    Ms. Skor. One of the wonderful things about the GREET model 
is that it is updated every year, and there is an incredibly 
robust data set, a lot of inputs going into the modeling 
specific to agricultural innovations. So, we would like to see 
that standard of carbon modeling used in every policy where we 
are talking about incentivizing low-carbon fuels and rewarding 
companies and private-sector for producing low-carbon fuels.
    So, we absolutely support using that and applying that in 
really any context.
    Mr. Feenstra. Yes, thank you. I fully agree with you.
    Biofuels like ethanol are low-cost and low-carbon 
solutions, and they can be carbon negative in the next decade. 
I mean, I just looked at carbon sequestration that we are 
looking at in Iowa for biodiesel and ethanol plants. I mean, 
there are so many things that are happening right now.
    An announcement for the strong RVO levels will encourage 
investment and innovation in this already proven industry that 
deserves and will create decreasing carbon today. I am very 
passionate about this.
    Thank you everyone for your testimonies, and I look forward 
to working with everyone as we further go down this path. Thank 
you.
    The Chairman. Thank you.
    I now recognize Representative Plaskett for 5 minutes.
    Ms. Plaskett. Thank you, Mr. Chairman, and thank you to the 
witnesses who are here. This has been very enlightening, and 
thank you for your research and the work that you are doing in 
this area.
    Mr. Wheeler, I wanted to ask you a question. Can you talk 
about what role an extension service can play in educating 
farmers on the benefits of bioeconomy?
    Mr. Wheeler. Thank you, Congresswoman.
    One of the most important things that an extension program 
can do is that very thing, is to educate. One of the main 
things that we are lacking throughout the United States for our 
land-grant institutions are resources. So, one of the main 
focuses that we focus on here in Missouri and the surrounding 
states specifically is on the research side, and making sure 
that we carry out that not only the land-grant institution 
mission and its vision, but also the mission and vision of its 
very farmer and its check-off. So, it is--I know it is very 
important to a lot of states. I know it is here in Missouri, 
and we continue to grow that effort and be laser-focused in 
that effort to bring in additional resources, but as well as 
find ways to reach those producers and our farmers.
    Ms. Plaskett. What difference do you think that reach could 
make on their businesses?
    Mr. Wheeler. I believe--well specifically, it is getting 
the farmer to us. That is one of the very difficult things that 
we have, because as any farmer, they are very independent and 
they are all small businessmen and -women. So, there are a lot 
of folks that actually struggle with that, to be able to reach 
out. But the ultimate goal through the extension program on a 
county basis is getting that research and that information to 
those businessmen and -women so they can make more informed 
decisions to the very point that you are referring to.
    Ms. Plaskett. Thank you, and I know that the farmers in the 
Virgin Islands would appreciate that.
    This is a question to any one of the witnesses. My district 
and other remote areas of the United States have developed 
energy plans to move forward further away from relying on 
petroleum for power and fuel. The non-contiguous areas of the 
country and other remote areas understand the burden of high 
energy costs. Being isolated, not having scale, not being able 
to connect to other areas. One proposal to address this in the 
Caribbean region is the Renewable Energy for Puerto Rico and 
the U.S. Virgin Islands Act, H.R. 2791, which would create a 
USDA grant program for investments in renewable energy, energy 
efficiency, energy storage, smart grids, and microgrid projects 
in territories of the United States.
    Can any of the witnesses speak to the importance of 
developing and using renewable energy sources in small, rural, 
remote areas?
    Ms. Skor. I will go ahead and start, Congresswoman. Thank 
you for the question.
    I think it is mission critical that all consumers have 
access to renewable energy sources, whether they are in an 
urban environment or a rural remote environment. On behalf of 
the ethanol industry, we are very proud that we are able to 
provide renewable fuel that is low-cost and affordable for all 
communities. That is one of the reasons that we want to see 
greater use of ethanol to extend our fuel supply and make fuel 
supply more stable, and also more low-cost. So, I appreciate 
the question.
    Mr. Wheeler. Congresswoman, Gary Wheeler.
    I think one of the main things, it goes back to there are a 
lot of us that have referred to it as HBIIP, but it comes back 
to infrastructure and the resources that can be provided to 
those regions. Infrastructure throughout the entire United 
States, whether it is biodiesel or increase E15, it really 
boils down to resources being laser-focused and making sure 
that those dollars are being spent where they need to be spent.
    Ms. Plaskett. Thank you.
    Mr. Aberle, did you have something you wanted to add?
    Mr. Aberle. The only thing I would add is that when you 
talk about investment and research to design and build out the 
successful technology platforms, whether they are microscale or 
large-scale projects, there has to be a path of proven 
technology before other stakeholders are willing to invest in 
that. And providing dollars for initial scale and demonstration 
scale projects is valuable in identifying that technology 
pathway to be replicated to larger stakeholders.
    Ms. Plaskett. Thank you, I appreciate that. And thank you 
for the time, Mr. Chairman. I yield back.
    The Chairman. Thank you, and I recognize Representative 
Davis for 5 minutes.
    Mr. Davis. I was actually--you were right on the edge of 
time. I mean, I was waiting for you to yield. I would have 
taken those last 2 seconds, Ms. Plaskett.
    I do want to say thank you--unfortunately, I want to say 
thank you to Ranking Member Fischbach and fortunately to 
Chairman Delgado for having this hearing today to discuss 
important renewable energy production issues in rural America, 
and the work that our ag producers are already doing to reduce 
emissions.
    This Administration, though, is headed down a dangerous 
path as it continues to pass up opportunities to uphold the 
Renewable Fuel Standard, and support America's ethanol and 
biodiesel producers. I have been proud to lead initiatives to 
strengthen and restore the integrity of the RFS, alongside my 
friends in my biofuels Democratic and Republican co-chairs. My 
colleagues on this Committee, Ranking Member Fischbach and Mr. 
Feenstra, have also been key in our efforts to hold this 
Administration accountable. In June, I sent a letter along with 
my Republican colleagues to President Biden regarding the 
rumors that the Administration was considering a nationwide 
waiver of the RFS to cut demand for more combined gallons than 
all those cut due to the small refinery exemptions issued by 
the prior Administration. And we encouraged the President to 
keep his 2020 promises to rural America and actually uphold the 
law.
    Now, we continue to wait on the RVO and have yet to receive 
a response to our letter, which is actually concerning. I hope 
that this is not an indication of the Administration's 
unwillingness to stand with America's farmers. And further, in 
March I sent a letter with my Republican colleagues to the USDA 
encouraging the Department to quickly provide assistance using 
existing funds to biofuels producers for COVID-related market 
disruptions. Secretary Vilsack responded to that letter in 
August, stating that an update to the Pandemic Assistance for 
Producers Program at the USDA would be provided by Labor Day. 
However, we are still waiting. Eleven months into this 
Administration and no biofuels producers have seen any relief.
    Mr. Chairman, I request unanimous consent to insert into 
the record the three letters I referenced.
    The Chairman. Without objection.
    [The letters referred to are located on p. 95.]
    Mr. Davis. Thank you.
    Madam Ranking Member, do you object?
    Mrs. Fischbach. Never.
    Mr. Davis. Thank you.
    First question. Ms. Skor, great to see you again. I want to 
know, has any prior Administration considered retroactively 
cutting the RVO in the way this Administration is rumored to be 
considering?
    Ms. Skor. Thank you, Congressman, and thank you for all 
your leadership as a Member of the House Biofuels Caucus.
    No. The rumors that we have heard, that this EPA is looking 
to reopen the 2020 blending requirements for RVOs, that is 
unprecedented and we believe there is no legal authority for 
the agency to do that.
    As you said, we need to get these renewable blending 
obligations out. They need to be at Congress's intent of 15 
billion gallons of conventional blending. So, we are still 
waiting, too.
    Mr. Davis. Mr. Wheeler, what do you think?
    Mr. Wheeler. Congressman, it is unprecedented for sure, and 
just want to say I greatly appreciate all your leadership and 
your work down in Illinois, and it is good to see you as well.
    Mr. Davis. Great to see you.
    Ms. Skor, do you believe the biofuels industry is better or 
worse off under this Administration?
    Ms. Skor. Well, as we have said from the outset, the first 
real test of the Administration is commitment to follow through 
on many of Mr. Biden's comments stated on the campaign trail is 
with the Renewable Volume Obligations. We have yet to see 
those. We are anxiously awaiting. That is going to be really 
the first test to show that they are committed to low-carbon 
renewable fuels that can be used in our current auto fleet.
    Mr. Davis. And this is our test right now, Ms. Skor, this 
is the test of the Administration. I mean, these are rumors but 
a lack of response to letters coming from Members of Congress, 
and a lack of response to questions coming from your industry, 
it only leads us to speculate, right?
    Ms. Skor. Speculation and uncertainty, and that is not what 
our marketplace needs right now. So, we are already well past 
our 2021 blending obligations. We have to get 2022 out so that 
we get back on track, which is something that the 
Administration had committed it would do at the outset, the 
beginning of the year.
    Mr. Davis. They committed, they campaigned to be elected on 
keeping the promise to America's biofuel producers in upholding 
the RFS, and all we hear right now is silence. That, to me, 
sounds like an almost--and hopefully this hearing will help 
change that--but it sounds to me like it is almost a broken 
campaign promise. And I will tell you, we here, we Republicans 
who have sent these letters, we will hold this Administration 
accountable.
    So, what can this Administration and we in Congress, Ms. 
Skor, do right now to provide certainty to your industry?
    Ms. Skor. What we need is to get those renewable volume 
blending requirements out. They need to be at 15 billion 
gallons. We need to restore year-round sales of E15. So, we get 
back on track and we can use more biofuels. They are good for 
the rural economy. They are good for the American driver.
    Mr. Davis. Thank you. I yield back my 2 seconds.
    The Chairman. Thank you.
    I recognize Representative Cammack for 5 minutes. Thank 
you.
    Mrs. Cammack. Well, thank you, Mr. Chairman. Thank you, 
Ranking Member Fischbach, and to all our witnesses for being 
here today, as well as virtually.
    It has been noted here several time already that our 
agricultural producers and businesses are some of the most 
entrepreneurial, forward-looking people out there today, and I 
think it is important to remember that this entrepreneurial 
innovative spirit, not government directives, is pushing 
American agricultural operations to make these new choices, 
like a dairy just outside my district that is making the choice 
to construct and operate a digester. Or as is the case with one 
operation within my district, leading the way in developing a 
biomass facility to energy with zero emissions that can produce 
electricity, heat, and high-quality biochar and diesel from 
wood waste. In a state like Florida, wood waste is plentiful, 
especially after a storm. Not only can this plant operate 
connected to the grid, but it can also operate as emergency 
support for critical infrastructure when other energy sources 
have been knocked offline. In a state like Florida, a plant 
like this one and others can provide a lifeline for critical 
infrastructure in the wake of a hurricane or other disaster.
    As the Ranking Minority Member of Emergency Preparedness, 
Response, and Recovery Subcommittee of the Homeland Security 
Committee, this is an issue that is very close and near and 
dear to my heart. Great synergy here for what we are talking 
about.
    This is a great example of private capital and innovation 
coming together in rural America to identify an opportunity 
that has the added effect of helping to protect our environment 
for generations to come. We need to find ways to encourage this 
private activity and innovation.
    Now, I know that we have kind of circled around this and 
you have answered this a few different ways, but Mr. Aberle--
and I hope I am saying that right--can you talk a little bit 
about the Federal policies and whether they help or hurt in the 
search for predictability in the marketplace as we are looking 
to finance these projects? And my follow up would be the 
uncertain nature of future cash flows needed to finance a 
project. I know you have talked a little bit about this and Ms. 
Plaskett hit on this as well, talking about proven technology 
and the pathway for stakeholders, oftentimes a pilot program. 
But just getting that off the ground, can you talk about some 
of the challenges within financing and what we might be able to 
do to clear the path?
    Mr. Aberle. Well, thank you for that question, 
Congresswoman.
    We have been involved in this space for a long time, and I 
was fortunate to be involved in the build-out of the ethanol 
industry by financing Greenfield Construction and new plants. 
From that perspective, the Federal policies that are in place 
really do put a floor on the business plan to give the 
entrepreneurs courage to move forward, and it also gives the 
lenders more courage to share or partner with them on 
developing new technologies to develop that pathway. It may not 
be the optimization of that business plan, but it does provide 
a floor where they can address the capital needs and the 
liquidity that they are going to need for a successful project.
    And so, by having Federal policies in place, it does give 
them kind of a rock to start their foundation on for a 
successful biofuel or renewable project.
    Mrs. Cammack. Are there particular programs in which you 
have seen success, and how might we be able to expand on those 
to make them better, more efficient, hit our intended targets, 
et cetera?
    Mr. Aberle. Well, the RFS was one example of one great one, 
because there was a market out there that was already built 
that needed to be served. And so, they knew when they built the 
project that there was to be a place for that product to go and 
be developed into the market. And so, that was the stepping 
stone to build out all these ethanol plants across the country.
    Mrs. Cammack. Thank you.
    Mr. Pratt, you mentioned that intermittent energy 
production can be challenging to grid operations, so what kind 
of activities do you undertake and equipment do you install to 
compensate? Now, are these mitigation efforts complicated, 
expensive, or both, and can you provide examples of renewable 
energy sources of energy where they come without the problem of 
intermittency?
    Mr. Pratt. Representative, thank you very much for your 
question.
    So, yes, your second question first. Intermittent 
resources, renewable resources that are not intermittent would 
be biomass, waste biomass, as you mentioned. Digesters can be 
that as well. So, you make good examples with those. Solar 
energy is more intermittent, so is wind. We also have 
geothermal out West, and that can be more consistent.
    So, what we are doing is looking at different technologies 
like batteries and grid enhancements and controls technology to 
help mitigate intermittency.
    Mrs. Cammack. Excellent, thank you so much.
    And with that, I yield back.
    The Chairman. Thank you. I now recognize Representative 
Baird for 5 minutes. You might have to unmute.
    Mr. Baird. Sorry about that. I thought I already had. 
Anyway, I really appreciate, Mr. Chairman and Ranking Member 
Fischbach for holding this hearing, and I really appreciate the 
witnesses being here and the technology that they bring and 
share with us.
    My first question, then, goes to Mr. Pratt. I really 
enjoyed your testimony and hearing about your organization and 
how they work to bring technological enhancements to your 
members, and I feel that the nation's rural electric co-ops do 
have an important role to play in the renewable marketplace. 
And it is interesting to me how you use the RUS program to help 
support your efforts for these facilities in Georgia's grid.
    But anyway, I was reminded of the interest in my district 
and the state to leverage the generation potential of anaerobic 
methane digesters, so this potential to harness the co-product 
of one of our nation's animal protein industries is often 
stymied by the difficulty and cost of getting these kinds of 
operations connected to the grid.
    So, Mr. Pratt, do you have any insight on how the livestock 
producers could be incentivized or we could be more supportive 
in helping them to connect the output of these digesters into 
the rural electric grid?
    Mr. Pratt. Yes, sir, Representative Baird. I appreciate 
your question about digesters.
    First, I think there is a lot of potential for digesters, 
and there are quite a few in the United States, but they aren't 
as inexpensive to produce energy from as solar energy today, so 
they have some headwinds for utilities in that respect. That 
does not mean they are not important. In the larger picture, I 
think they can be very helpful. There has been some difficulty 
in maintaining reliability of those facilities; however, I 
think the technology continues to change and there will be 
opportunities for both low interest loans from the USDA and 
RUS, as you mentioned. I think that making sure they have 
access to the similar tax credits that other forms of renewable 
energy could be helpful, and I think it could also be very 
beneficial to those agricultural and rural communities to 
dispose of waste in a very economical and helpful fashion, and 
produce some energy while we do that.
    Mr. Baird. That is great. I think we have some food waste 
that we could probably incorporate into that same system, as 
well as the forestry industry and some of that. It would be a 
feedstock for these kinds of digesters, so I think that has 
potential and I really appreciate your comments.
    Next, I want to go to Mr. Wheeler. You made reference to 
the PoreShield project that can be used to extend the longevity 
of our nation's bridges and concrete. That is sort of exciting 
to me, and you did that work in cooperation with the soybean 
farmers in Indiana, as well as Purdue University. So, I am just 
going to give you the opportunity to expand on that product and 
its use, and what spurred you to make that kind of discovery?
    Mr. Wheeler. Sure. So, thank you, Congressman.
    Well, it was actually developed in Indiana in partnership 
with their farmers and the check-off, and so, it is a perfect 
example of where the check-off can really partner on a public-
private position and develop new products, biobased products.
    We specifically use PoreShield here at Soy Innovation here 
in Jefferson City, Missouri, on a lot of our sidewalks, but we 
also participated in a pilot project with the Soy 
Transportation Coalition also provided through our check-off 
programing and our farmers, and we partnered with several 
different municipalities here in the State of Missouri and 
across the Midwest to showcase what PoreShield can actually do, 
and lengthen the life of not only concrete, but also asphalt. 
So, this is just one of many projects and ideas that have come 
to fruition over the past several years that is produced from 
this little thing we call the soybean, which is magnificent.
    So, thank you for your passion as well as our passion as 
well, and there will be many more products that will be coming 
out into the future. Thank you for the soybean farmer and our 
check-offs. So, thanks for the question.
    Mr. Baird. Thank you very much, and it looks like I have 
about 10 seconds left, so I yield back my time.
    But Ms. Skor, I was going to ask about the reduction in 
greenhouse gas emissions by 46 percent by using ethanol, but I 
am out of time, and so, I yield back.
    [The information referred to is located on p. 98.]
    The Chairman. Thank you.
    Before we adjourn today, I want to invite Ranking Member 
Fischbach to share any closing comments you may have.
    Mrs. Fischbach. Well, I just want to say thank you so much. 
I think it has been a very helpful conversation, and I think 
that we need to continue to make sure that we are recognizing 
and promoting the biofuels as something that is a part of our 
entire ag economy and part of that carbon emissions reductions, 
and so we need to continue the conversation, and I appreciate 
Congressman Davis talking a little bit about what is going on 
within the Administration.
    Mr. Davis. What about science? Where are we at on it?
    Mrs. Fischbach. But I will just say thank you so much for 
being here, and I appreciate the conversation and we will 
continue the conversation, and thank you, Mr. Chairman, for 
putting the Committee hearing together today.
    The Chairman. Thank you, Ranking Member Fischbach.
    As we bring this hearing to a close, I would want to again 
express my gratitude for the expertise provided today by our 
panel of witnesses, along with the work that you all do to keep 
our rural communities thriving.
    I represent the eighth most rural Congressional district in 
the country, so to be able to facilitate a conversation like 
the one we have had today gives me hope that this Committee can 
continue to work for rural America and find commonsense 
solutions that improve the economic, social, and environmental 
well-being of our communities.
    Under the Rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any question posed by a Member.
    This hearing of the Subcommittee on Commodity Exchanges, 
Energy, and Credit is adjourned.
    [Whereupon, at 12:04 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Submitted Letters by Hon. Rodney Davis, a Representative in Congress 
                             from Illinois
                                Letter 1
March 24, 2021

  Hon. Thomas ``Tom'' J. Vilsack,
  Secretary,
  U.S. Department of Agriculture,
  Washington, D.C.

    Dear Secretary Vilsack,

    As you know, as part of the agricultural economy, the biofuels 
industry has been subject to immense financial distress due to the 
COVID-19 pandemic. Many of our local ethanol and biofuels plants 
continue to recover from dramatic demand loss in 2020. While demand for 
fuel has increased, past losses must be addressed.
    Rural communities and agricultural economies where the biofuels 
industry plays a major role are still grappling with the economic 
impacts of COVID-19. To that end, we respectfully urge you to use 
remaining funds provided by the Coronavirus Aid, Relief, and Economic 
Stabilization (CARES) Act (P.L. 116-136) and the Consolidated 
Appropriations Act of 2021 (P.L. 116-260), to support our biofuels 
producers. These packages passed on an overwhelming bipartisan basis 
with the intent of providing broad assistance to producers, and 
biofuels should not be left out.
    While the biofuels industry, along with our other impacted 
agricultural producers have waited for nearly 2 months for the 
Coronavirus Food Assistance Program (CFAP) to reopen, our local farmers 
continue to struggle. CFAP has played a critical role in keeping many 
of our local farming operations afloat prior to the Administration's 
freeze on the Program that started in January. Assistance must resume 
and action must be taken immediately to provide parity, and much-needed 
assistance to the biofuels industry.
    We encourage you to expeditiously reopen the program and provide 
aid to our local biofuels producers and processors to sustain good-
paying local jobs, and keep key markets open to our local farmers. It 
is critical that this Administration acknowledge Congressional intent 
and provide targeted relief to the biofuels industry as outlined in the 
bipartisan Consolidated Appropriations Act of 2021 (P.L. 116-260), and 
quickly send payments to our local producers.
    We stand ready and look forward to working with you on solutions to 
bolster Rural America, and to ensure relief for the biofuels industry 
along with other sectors of the agricultural economy. Thank you for 
your consideration of this request.
            Sincerely,
            
            

 
 
 
Hon. Rodney Davis,       Hon. Adrian Smith,       Hon. Dusty Johnson,
Member of Congress       Member of Congress       Member of Congress
 

                                                  
                                                  

 
 
 
Hon. Randy Feenstra,     Hon. Michelle            Hon. Jim Hagedorn,
Member of Congress        Fischbach,              Member of Congress
                         Member of Congress
 

                                                  
                                                  

 
 
 
Hon. Darin LaHood,       Hon. Don Bacon,          Hon. Ann Wagner,
Member of Congress       Member of Congress       Member of Congress
 

                                                  
                                                  

 
 
 
Hon. Tom Emmer,          Hon. Blaine              Hon. Mike Bost,
Member of Congress        Luetkemeyer,            Member of Congress
                         Member of Congress
 

                                                  
                                                  

 
 
 
Hon. Ashley Hinson,      Hon. Mariannette Miller- Hon. James R. Baird,
Member of Congress        Meeks,                  Member of Congress
                         Member of Congress
 

                                                  
                                                  
Hon. Adam Kinzinger,
Member of Congress
                                Letter 2
August 19, 2021

  Hon. Rodney Davis,
  Member,
  U.S. House of Representatives,
  Washington, D.C.

    Dear Congressman Davis:

    Thank you for your letter of March 24, 2021, cosigned by your 
colleagues, to the U.S. Department of Agriculture (USDA), regarding 
relief for biofuels industry that was in the Consolidated 
Appropriations Act, 2021. I apologize for the delayed response.
    We understand your concerns that the development, implementation, 
and rollout of a program to aid the biofuels industry has been taking a 
while, but we want to assure you that the program will be implemented 
this year. While it is a priority for the Administration, there are 
many other provisions that USDA needs to work through from both the 
Consolidated Appropriations Act, 2021 and the American Rescue Plan Act, 
all of which are also important to implement.
    USDA's Office of the Chief Economist, Rural Development, and the 
Farm Service Agency are working together to make sure the program's 
policies are equitable and will help as many people as possible in the 
biofuels industry who have been affected by COVID-19.
    USDA is committed to delivering financial assistance to farmers, 
ranchers, and agricultural producers who have been impacted by COVID-19 
market disruptions. On March 24, I announced that USDA is establishing 
new programs and efforts to bring financial assistance to farmers, 
ranchers, and producers who felt the impact of these market 
disruptions. The new initiative, USDA Pandemic Assistance for 
Producers, will reach a broader set of producers than in previous 
COVID-19 aid programs. I've asked my team to review support for 
biofuels producers and we are working towards an update of programs by 
Labor Day.
    We will continue to provide the latest information about the 
Pandemic Assistance for Producers initiative on www.farmers.gov. The 
site will have timely updates and announcements for producers.
    Again, thank you for writing. A similar response has been sent to 
your colleagues.
            Sincerely,
            
            
Hon. Thomas ``Tom'' J. Vilsack,
Secretary.
                                Letter 3
September 22, 2021

  Hon. Joseph R. Biden,
  President,
  The White House,
  Washington, D.C.

    Dear President Biden,

    We are deeply disappointed by the rumors that indicate your 
Administration is reversing course on its promises as it relates to 
upholding the Renewable Fuel Standard (RFS). During your campaign, just 
over a year ago, you said that former President Donald J. Trump ``could 
have made explicit his imperative to stand with American farmers by 
reversing harmful waivers and setting strong levels for 2021,'' \1\ and 
yet, we understand that the forthcoming Renewable Volumes Obligation 
(RVO) will cut the demand for more combined gallons of ethanol than all 
gallons cut due to Small Refinery Exemptions (SREs) issued by the prior 
Administration.
---------------------------------------------------------------------------
    \1\ https://joebiden.com/2020/09/15/statement-by-vice-president-
joe-biden-on-need-to-stand-with-farmers-and-biofuel-producers-after-
donald-trumps-latest-insult-to-ethanol-industry/.
---------------------------------------------------------------------------
    If your Administration makes the unprecedented move to reopen the 
finalized 2020 RVO, and strip the demand for billions of gallons, the 
industry will certainly be devastated. As you stated, ``Lip service 
won't make up for nearly 4 years of retroactive damage that's decimated 
our trade economy and forced ethanol plants to shutter.'' If these 
rumors are correct, demand for over 5 billion gallons of renewable, 
clean fuels will be lost.
    Biofuels production is a major piece of the rural economy in our 
districts, therefore, we strongly urge you to direct your EPA to 
reconsider the rule to ensure that your Administration makes good on 
these promises to ``fight for family farmers and revitalize rural 
economies . . . by ushering in a new era of biofuels.''
    Both oil refiners and ethanol refiners were hurt by decreased 
demand due to the COVID-19 pandemic, and while we hope that markets 
will continue to rebound, it is now more important than ever to uphold 
the law and ensure our domestic biofuels producers have certainty 
through fulfilling the statutory obligation of 15 billion gallons of 
conventional ethanol, annually, along with a strong overall RVO.
    Given the challenges facing our farmers from all sides on this 
issue, it is imperative that your Administration choose to stand with 
American farmers. We stand ready to work with you to ensure that our 
biofuels producers are once again prioritized through a strong RVO, and 
that the law is upheld. Thank you for your attention to this request.
            Sincerely,
            
            

 
 
 
Hon. Rodney Davis,       Hon. Adrian Smith,       Hon. Dusty Johnson,
Member of Congress       Member of Congress       Member of Congress
 

                                                  
                                                  

 
 
 
Hon. Ashley Hinson,      Hon. Michelle            Hon. Randy Feenstra,
Member of Congress        Fischbach,              Member of Congress
                         Member of Congress
 

                                                  
                                                  

 
 
 
Hon. Darin LaHood,       Hon. Tom Emmer,          Hon. Ann Wagner,
Member of Congress       Member of Congress       Member of Congress
 

                                                  
                                                  

 
 
 
Hon. Tracey Mann,        Hon. Mariannette Miller- Hon. Jim Hagedorn,
Member of Congress        Meeks,                  Member of Congress
                         Member of Congress
 

                                                  
                                                  

 
 
 
Hon. Vicky Hartzler,     Hon. James Comer,        Hon. Ron Estes,
Member of Congress       Member of Congress       Member of Congress
 

                                                  
                                                  

 
 
 
Hon. Jake LaTurner,      Hon. James R. Baird,     Hon. Adam Kinzinger,
Member of Congress       Member of Congress       Member of Congress
 

                                                  
                                                  

 
 
 
Hon. Sam Graves,         Hon. Don Bacon,          Hon. Blaine
Member of Congress       Member of Congress        Luetkemeyer,
                                                  Member of Congress
 

                                                  
                                                  
Hon. Mike Bost,
Member of Congress
                                 ______
                                 
  Supplementary Information Submitted by Emily Skor, Chief Executive 
                         Officer, Growth Energy
Insert
          Mr. Baird. Thank you very much, and it looks like I have 
        about 10 seconds left, so I yield back my time.
          But Ms. Skor, I was going to ask about the reduction in 
        greenhouse gas emissions by 46 percent by using ethanol, but I 
        am out of time, and so, I yield back.

    To meet the challenges in reducing carbon emissions from our 
transportation sector, biofuels are an immediately available, renewable 
liquid fuel which reduce greenhouse gas emissions (GHGs) from light- 
and heavy-duty vehicles.
    A January 2021 study conducted by Environmental Health and 
Engineering, Inc., led by Harvard Adjunct Professor David MacIntosh, 
found that GHGs from corn-based ethanol are 46% lower than gasoline.\1\ 
Additionally, a study by Growth Energy showed that a nationwide 
transition from E10 to E15 would lower GHGs by 17.62 million tons 
annually, the equivalent of removing 3.85 million vehicles from the 
road.\2\
---------------------------------------------------------------------------
    \1\ https://iopscience.iop.org/article/10.1088/1748-9326/abde08.
    Editor's note: references annotated with  are retained in 
Committee file.
    \2\ http://www.airimprovement.com/reports/national-e15-analysis-
final.pdf.
---------------------------------------------------------------------------
    We need more biofuels like ethanol, which have the potential to do 
even more to reduce the carbon intensity of transportation with the 
right combination of policy and marketplace certainty. With this in 
mind, we ask that you continue your strong support for the biofuels 
industry so we can continue to innovative and de-carbonize our 
transportation fleet.

Emily Skor,
CEO, Growth Energy.
                                 ______
                                 
   Submitted Letter by Sarah Gallo, Vice President, Agriculture and 
           Environment, Biotechnology Innovation Organization
November 16, 2021

 
 
 
Hon. Antonio Delgado,                Hon. Michelle Fischbach,
Chairman,                            Ranking Minority Member,
Subcommittee on Commodity            Subcommittee on Commodity
 Exchanges, Energy, and Credit,       Exchanges, Energy, and Credit,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairman Delgado, Ranking Member Fischbach, Members of the 
Subcommittee:

    The Biotechnology Innovation Organization (BIO) is pleased to 
submit a statement for the record to the United States House of 
Representatives Committee on Agriculture Subcommittee on Commodity 
Exchanges, Energy, and Credit hearing on A Look at the Renewable 
Economy in Rural America.
Introduction
    BIO\1\ represents 1,000 members in a biotech ecosystem with a 
central mission--to advance public policy that supports a wide range of 
companies and academic research centers that are working to apply 
biology and technology in the energy, agriculture, manufacturing, and 
health sectors to improve the lives of people and the health of the 
planet. BIO is committed to speaking up for the millions of families 
around the globe who depend upon our success. We will drive a 
revolution that aims to cure patients, protect our climate, and nourish 
humanity.
---------------------------------------------------------------------------
    \1\ https://www.bio.org/.
---------------------------------------------------------------------------
A Look at the Renewable Economy in Rural America
    BIO applauds the Subcommittee for examining how the Renewable 
Economy can benefit Rural America. As the Committee and Congress begin 
work on the 2023 Farm Bill, it will be critical to examine policies to 
combat climate change, strengthen the renewable economy, create jobs, 
and maintain our supply chains.
    Growing the renewable economy will require Congress to lead with 
science and U.S. innovation. We must incentivize the adoption of 
innovative, sustainable technologies and practices; and streamline and 
expedite regulatory pathways for breakthrough technology solutions. 
Investment in and deployment of cutting-edge technologies will be 
crucial to ensure farmers, ranchers, sustainable fuel producers, and 
manufacturers are able to respond to climate change and maintain the 
U.S.'s global leadership in agriculture. This includes removing 
barriers and assisting beginning and socially disadvantaged farmers and 
ranchers to access and utilize these technologies, so all producers can 
adapt to the challenges ahead. By accelerating and deploying 
innovation, American agriculture can be resilient, self-sustaining, and 
drive our economic recovery.
    BIO supports legislative action that that catalyzes resilient and 
sustainable biobased economies. Policy should use science-based targets 
to increase the use of biobased manufacturing and low-carbon fuels. 
Science-based policy will promote resilient and sustainable supply 
chains across economic sectors including translating sustainability to 
best practices in all bioindustries. This will enable U.S. agriculture 
to combat climate change while producing enough food, feed, fuel, and 
fiber for a growing world.
    To aid the Subcommittee in its work and provide more background on 
these technologies and the innovative breakthroughs that can reduce 
greenhouse gas emissions throughout agricultural supply chains, 
attached is BIO' Biotech Solutions for Climate Report,\2\ which 
examines biotechnology's contributions to addressing the climate 
crisis. This report highlights how biotechnology can achieve at least 3 
billion tons of CO2 equivalent mitigation annually by 2030, 
by delivering vital climate solutions in four key areas:
---------------------------------------------------------------------------
    \2\ https://www.bio.org/sites/default/files/2021-04/
Climate%20Report_FINAL.pdf.

---------------------------------------------------------------------------
   Producing sustainable biomass feedstock

   Empowering sustainable production

   Developing lower carbon products

   Enhancing carbon sequestration
Conclusion
    By bolstering existing technologies and investing in emerging 
biotechnologies the agricultural value chain could provide 
transformative greenhouse gas benefits in a range of sectors, to the 
benefit of Rural America's renewable economy.
    BIO is committed to working with the Subcommittee to support policy 
that advances pioneering technology breakthroughs. With science we can 
return our nation and the world to health and prosperity by taking bold 
and drastic action to address the climate crisis.
            Sincerely,
            
            
Sarah Gallo,
Vice President, Agriculture and Environment,
Biotechnology Innovation Organization.
                              attachment 1
Biotech Solutions for Climate Report
Executive Summary
Examining biotechnology's contributions to addressing the climate 
        crisis
          ``Climate change is one of the greatest public policy 
        challenges facing this generation.''

    New approaches are required at almost every level of the economy. 
Biotechnology has the potential to be a transformative asset in this 
struggle, offering vital contributions to near-term greenhouse gas 
(GHG) reductions and revolutionary tools to avert catastrophic climate 
change in the longer term. New biotech tools, including gene editing 
and synthetic biology, can be transformative climate solutions in key 
emerging industry sectors. Policies supporting the development and 
deployment of biotech climate solutions should be part of any 
government effort to address climate change.
    Biotechnology can achieve at least 3 billion tons of CO2 
equivalent mitigation annually by 2030, using existing technologies, 
and emerging biotechnologies could have transformative GHG benefits in 
a range of industrial sectors. Biotechnology can deliver vital climate 
solutions in four key areas:

   Producing sustainable biomass feedstock

   Empowering sustainable production

   Developing lower carbon products

   Enhancing carbon sequestration
Producing Sustainable Biomass Feedstock
    Substituting sustainably produced biomass feedstocks for fossil 
feedstocks is a critical component of de-carbonizing the U.S. economy 
because it leverages the capacity of photosynthesis to remove carbon 
from the atmosphere. Biomass substitution has provided vital near-term 
reductions in the carbon intensity of transportation fuels and a 
rapidly growing array of consumer products. In several key markets, 
such as aviation fuels, biobased alternatives offer the only viable 
path to GHG reductions. Biotechnology is being deployed to develop and 
utilize a range of next-generation sustainable biomass feedstocks to 
expand the availability and further reduce the carbon intensity of 
biofuels and biobased products. Future climate gains from biomass will 
depend critically on the carbon footprint of biomass feedstock 
production.
    Biotech innovations in sustainable biomass production are also 
transforming the broader agriculture sector. Agriculture accounts for 
roughly 10% of total U.S. GHG emissions.\1\ The vast majority of these 
emissions are nitrogen emissions from fertilizer and soils and methane 
emissions from livestock. Biotech is being deployed to tackle both 
issues.
    Key Findings:

   Biofuels from agricultural or municipal waste and dedicated 
        energy crops such as algae, switchgrass, hybrid poplar and 
        Miscanthus have achieved GHG reductions of up to 80% versus 
        petroleum with current technology.\2\

   Continued improvements in feedstock production, conversion 
        efficiency, and co-products are expected to yield pathways with 
        negative carbon scores.\3\

   Biotechnology is being deployed to radically reduce 
        agricultural nitrogen emissions: first, by introducing 
        nitrogen-fixing microorganisms, known as agricultural (ag) 
        biologicals, to the soil; and second, by using plant 
        biotechnology to engineer plants to better utilize soil 
        nitrogen. Biotech solutions could reduce nitrous oxide 
        emissions from agriculture by more than 150 million metric tons 
        of carbon equivalent.

   Ag biologicals and plant biotechnology are being similarly 
        leveraged to enhance soil carbon sequestration through 
        introduction of carbon-fixing soil microbes and larger plant 
        root systems. Ag biologicals and plant biotechnology could 
        enhance soil carbon sequestration by up to 600 million metric 
        tons per year if widely deployed.

   Biotechnology is reducing methane emissions from livestock 
        through new animal feeds and feed ingredients, more efficient 
        animals, and solutions for processing and reusing animal waste.

   Plant biotechnology will be critical to continued 
        agriculture sustainability gains, including improvements in 
        crop yields, photosynthetic efficiency, and climate resiliency.

   Together, biotech solutions have the potential to reduce 
        agriculture sector GHG emissions by nearly 1 billion metric 
        tons (1 gigaton) annually--or the equivalent of GHG emissions 
        from more than 100 million U.S. homes.
Empowering Sustainable Production
    Manufacturing of everyday products, like apparel, plastics, 
packaging, carpet and cosmetics, is a major greenhouse gas emitter, 
responsible for 22% of total GHG emissions.\4\ Biotechnology can 
dramatically reduce these emissions by making their building blocks 
from renewable feedstocks rather than fossil fuels; in many cases, 
biology allows drop-in replacements of existing building blocks, 
enabling faster adoption throughout our economy with homegrown 
solutions. New biotech tools, including gene editing and synthetic 
biology, offer the potential for transformative climate solutions in 
key emerging industry sectors. Biotech offers a sustainable model for 
manufacturing in the 21st century.
    Key Findings:

   Biomanufacturing--the use of enzymes and microorganisms in 
        manufacturing--can reduce GHG emissions 80% or more relative to 
        traditional chemical routes for a variety of chemicals and 
        consumer products.\5\

   CRISPR and other gene editing tools have dramatically 
        increased the speed and reduced the cost of genetic engineering 
        and are being deployed to tackle a range of global challenges, 
        including climate change.

   Biology-based parallel computing and DNA data storage have 
        the potential to cut the energy and carbon footprints of 
        computing and data storage--sectors expected to account for 14% 
        or more of global GHG emissions by 2040 \6\--by 99% or more 
        versus current technology.\7\

   Biological sensors, coatings and ingredients can 
        substantially reduce food and feed waste, which is responsible 
        for roughly seven percent of total global GHG emissions.\8\
Devloping Lower-Carbon Products
    As awareness of the climate crisis expands, consumers are 
increasingly demanding lower-carbon options and more sustainable 
replacements for existing products. This means finding low-emission 
alternatives that provide the same level of performance, durability and 
cost-effectiveness as mature fossil-based systems. Biotechnology allows 
for the production of low-carbon consumer products through the 
substitution of biomass or other recycled carbon feedstocks and by 
enabling more efficient, biologically-based production, satisfying an 
increasingly important market segment while reducing emissions.
    Key Findings:

   First-generation biofuels have reduced U.S. transportation 
        sector GHG emissions by 980 million tons over the past thirteen 
        years,\9\ equivalent to taking roughly 16 million vehicles off 
        the road, or 19 coal-fired power plants offline, for that 
        period.\10\ Biotech innovations in feedstocks, processing, co-
        products, and carbon recycling continue to lower their carbon 
        intensity.

   With lifecycle GHG reductions of 80% or more versus 
        petroleum, next-generation feedstocks will more than double the 
        transportation GHG emissions reductions achieved by first-
        generation biofuels and are poised to deliver carbon-negative 
        transportation solutions.

   Biobased products produced from biomass or biologically 
        recycled waste gases added $459 billion to the U.S. economy in 
        2016 \11\ and are built from carbon that would otherwise reside 
        in the atmosphere, creating a pivotal pathway for atmospheric 
        carbon removal.

   Biobased plastics and polymers, such as PLA, PHA, and BDO 
        have achieved lifecycle GHG reductions of up to 80% versus 
        their petroleum-based counterparts.\12\ A rapidly growing list 
        of new biobased chemical building blocks is now in development.

   Biotechnology is lowering the carbon footprint of animal 
        products and making possible a growing array of sustainable, 
        low-carbon options for meat and animal products through:

     Plant-based and cultured meats with up to 89% lower 
            lifecycle GHG emission.\13\

     Algae and microbial feed ingredients that reduce 
            enteric methane emissions from ruminant animals by 68% or 
            more,14-15 avoiding the equivalent of up to 140 
            million metric tons of carbon annually.

     Other biotech ingredient options for fish feed that 
            reduce its carbon footprint by up to 30%.\16\

     Anaerobic digestion of animal waste, with the 
            potential to reduce U.S. GHG emissions by 151 
            MTCO2 eq. annually by 2050 using current 
            technology.\17\
Enhancing Carbon Sequestration
    A broad scientific consensus exists that reducing carbon emission 
alone will be insufficient to avert catastrophic climate change. Almost 
every model of a successful stabilization of global temperatures 
includes a substantial component of carbon dioxide removal from the 
atmosphere as well.\18\ Biotechnology has multiple critical roles in 
achieving the needed carbon removal.
    Key Findings:

   Biological carbon capture is the most feasible near-term 
        pathway to meaningful atmospheric carbon removal. Development 
        of thermochemical systems for point-source and direct-air 
        capture remains an important technology pursuit, but 
        photosynthesis and other biological pathways remain the only 
        established mechanisms for carbon capture on a scale sufficient 
        for carbon removal.

   Bioenergy with Carbon Capture and Sequestration (BECCS) 
        could cost-effectively remove over 700 million metric tons of 
        carbon per year by 2040, or more than half the emissions from 
        all U.S. coal power plants.\19\

   Algae and other microbial carbon capture systems applied to 
        biomass energy or other biorefinery systems offer one of the 
        most carbon-negative climate solutions available.

   Suitable land and other infrastructure exists to deploy 
        algae-based carbon capture systems at more than 500 power 
        plants and ethanol facilities in the U.S. These systems would 
        have a potential to capture more than 200 million tons of 
        CO2 annually.\20\
Conclusion
    Biotechnology is a crucial enabling technology to combat climate 
change. It offers gigaton solutions from existing technologies and 
potentially transformative solutions in multiple sectors of the 
economy. Current and future biotechnology innovations will be needed to 
achieve a zero-carbon economy and play a key role in carbon capture and 
sequestration to take us beyond zero. Policies supporting the 
development and deployment of biotech climate solutions should be part 
of any government effort to address climate change.

 
 
 
                               [Endnotes]
 
    \1\ http://cfpub.epa.gov/ghgdata/inventoryexplorer/.
    \2\ htts://www.epa.gov/fuels-registration-reporting-and-compliance-
 help/lifecycle-greenhouse-gas-results.
    \3\ Kim S., Zhang X., Reddy A.D., Dale B.E., Thelen K.D., Jones
 C.D., Izaurralde R.C., Runge T., Maravelias C. Carbon-Negative Biofuel
 Production. Environ. Sci. Technol. 2020 Sep. 1; 54(17): 10797-10807.
 doi: 10.1021/acs.est.0c01097. Epub 2020 Aug. 19. PMID: 32786588. http://
 pubmed.ncbi.nlm.nih.gov/32786588/.
    \4\ https://cfpub.epa.gov/ghgdata/inventoryexplorer/.
    \5\ Erickson, B. ``New Biotech Tools for a Cleaner Environment.''
 Washington, D.C.: Biotechnology Industry Organization, 2005. http://
 www.bio.org/sites/default/files/legacy/bioorg/docs/files/
 CleanerExecSumm.pdf.
    \6\ http://www.sciencedirect.com/science/article/abs/pii/
 S095965261733233X?via%3Dihub.
    \7\ http://www.pnas.org/content/113/10/2591.abstract.
    \8\ Food Wastage Footprint: Impacts on natural resources. Summary
 Report. France: Food and Agriculture Organization of the United
 Nations, 2013. http://www.fao.org/3/i3347e/i3347e.pdf.
    \9\ Unnasch. S. and D. Parida (2021) GHG Reductions from the RFS2--A
 2020 Update. Life Cycle Associates Report LCA. LCA.6145.213.2021
 Prepared for Renewable Fuels Association. http://ethanolrfa.org/wp-
 content/uploads/2021/02/LCA_-_RFS-2-GHG-Update_2020.pdf.
    \10\ U.S. Environmental Protection Agency. Greenhouse Gas
 Equivalencies Calculator. http://www.epa.gov/energy/greenhouse-gas-
 equivalencies-calculator. Accessed April 3, 2021.
    \11\ Daystar, J., Handfield, R.B., Golden, J.S., and, T.E. McConnell
 (2018). An Economic Impact Analysis of the U.S. Biobased Products
 Industry: 2018 Update. Volume IV. A Joint Publication of the Supply
 Chain Resource Cooperative at North Carolina State University and the
 College of Engineering and Technology at East Carolina University.
 2018. http://www.biopreferred.gov/BPResources/files/
 BiobasedProductsEconomicAnalysis2018.pdf.
    \12\ Yu, J. and Chen, L. The Greenhouse Gas Emissions and Fossil
 Energy Requirements of Bioplastics from Cradle to Gate of a Biomass
 Refinery. Environ. Sci. Technol. 2008, 42, 18, 6961-6966. http://
 pubs.acs.org/doi/abs/10.1021/es7032235.
    \13\ Khan, S. Comparative environmental LCA of the Impossible
 Burger with conventional ground beef burger, Quantis International,
 Feb. 27, 2019. http://impossiblefoods.com/mission/lca-update-2019/.
    \14\ Roque, B.M., et al. Red seaweed (Asparagopsis taxiformis)
 supplementation reduces enteric methane by over 80 percent in beef
 steers. bioRxiv 2020.07.15.204958; doi: https://doi.org/10.1101/
 2020.07.15.204958. https://www.biorxiv.org/content/10.1101/
 2020.07.15.204958v1.abstract. Roque B.M., Venegas M., Kinley R.D., de
 Nys R., Duarte T.L., Yang X., et al. (2021) Red seaweed (Asparagopsis
 taxiformis) supplementation reduces enteric methane by over 80 percent
 in beef steers. PLoS ONE 16(3): e0247820. https://doi.org/10.1371/
 journal.pone.0247820. http://journals.plos.org/plosone/
 article?id=10.1371/journal.pone.0247820.
    \15\ Press Release: Leading California University Finds 78 Percent
 Reduction in Livestock Methane Emissions with Direct-fed Microbials
 from Locus Fermentation Solutions. March 26, 2020. http://locusfs.com/
 leading-california-university-finds-78-percent-reduction-in-livestock-
 methane-emissions-with-direct-fed-microbials-from-locus-fermentation-
 solutions/.
    \16\ Cumberledge, T. Assessment of environmental impact of
 FeedkindTM protein. Carbon Trust, April 2016. http://
 www.carbontrust.com/resources/assessment-of-environmental-footprint-of-
 feedkind-protein.
    \17\ Zaks, David P.M., et al. ``Contribution of anaerobic digesters
 to emissions mitigation and electricity generation under U.S. climate
 policy.'' Environmental Science & Technology vol. 45,16 (2011): 6735-
 42. doi:10.1021/es104227y. http://www.ncbi.nlm.nih.gov/pmc/articles/
 PMC3155279/.
    \18\ http://www.ipcc.ch/site/assets/uploads/sites/2/2019/02/
 SR15_Chapter2_Low_Res.pdf.
    \19\ Langholtz M., Busch I., Kasturi A., Hilliard M.R., McFarlane
 J., Tsouris C., Mukherjee S., Omitaomu O.A., Kotikot S.M., Allen-Dumas
 M.R., DeRolph C.R., Davis M.R., Parish E.S. The Economic Accessibility
 of CO2 Sequestration through Bioenergy with Carbon Capture and Storage
 (BECCS) in the US. Land. 2020; 9(9): 299. http://doi.org/10.3390/
 land9090299. http://www.ornl.gov/news/bioenergy-carbon-capture-combo-
 could-cost-effectively-mitigate-carbon-dioxide.
    \20\ Algae Biomass Organization. DOE 2016 Billion-Ton Report: Ample
 Resources for Algae Production in the U.S. July 13, 2016 http://
 algaebiomass.org/blog/9541/doe-2016-billion-ton-report-ample-resources-
 for-algae-production-in-the-u-s/.
 

                              attachment 2


Biotech Solutions for Climate Report
Examining biotechnology's contributions to addressing the climate 
        crisis
Matt Carr, Green Capitol, LLC

Tristan Brown, State University of New York, College of Environmental 
Sciences and Forestry

Colin Murphy, University of California, Davis, Policy Institute for 
Energy, Environment, and the Economy
Table of Contents
Introduction
Technologies

    Products

          Advanced Biofuels
          Renewable Chemicals and Biobased Products/Materials
          Food and Feed Ingredients

    Agriculture Inputs and Climate Services

          Agricultural Biologicals
          Biological Carbon Capture, Use and Storage

    New Biotech Tools and Bio-[Industrial] Manufacturing

          New Biotech Tools
          Applications of Bio-Manufacturing in Traditional Industries
          New Markets and Novel Applications

    Plant and Animal Biotechnologies

          Plant Biotechnology and Gene Editing
          Animal Biotechnology
          Renewable Chemicals and Biobased Products/Materials
          Food and Feed Ingredients

Climate Analysis

    Issues in LCA for Biotechnology
    GHG Mitigation [Potential] on National Scale

          Feedstock
          Empowering Sustainable Production
          Developing Lower-Carbon Products
          Enhancing Carbon Sequestration

Barriers to Adoption and Policy Proposals

    Financing Barriers
    Regulatory Barriers
    Policy Proposals

          De-carbonizing Transportation
          De-carbonizing Industry
          De-carbonizing Agriculture
          Negative-Carbon Tech
          Economy-Wide Climate Programs
  Introduction
          ``Climate change is one of the greatest public policy 
        challenges facing this generation.''

    The rapid accumulation of anthropogenic carbon dioxide in the 
atmosphere is already altering natural climate \1\ and biological 
systems, resulting in abnormally destructive wildfires, storms, 
rainfall patterns and the spread of infectious disease. It is 
increasingly clear that the historical, fossil fuel-based models of 
carbon, energy and material cycling through the economy are 
incompatible with maintaining a hospitable environment. Humanity will 
need to bring every tool it has to bear on this critical challenge. New 
approaches are required at almost every level of the economy. 
Biotechnology has the potential to be a transformative asset in this 
struggle.
    Biotechnology is technology based on biology. Biotechnology 
applications touch most aspects of modern life, from agriculture to 
manufacturing to medicine. In the context of climate change, 
biotechnology offers solutions in four key categories:

   Producing sustainable biomass feedstock

   Empowering sustainable production

   Developing lower carbon products

   Enhancing carbon sequestration

    Biotechnology offers vital contributions to near-term greenhouse 
gas (GHG) reductions and revolutionary tools to combat climate change 
in the longer term. Policies supporting the development and deployment 
of biotech climate solutions should be part of any government effort to 
address climate change. This report reviews the current contributions 
of biotechnology to greenhouse gas (GHG) reductions and identifies the 
emerging biotech solutions with the greatest potential to avert, and 
reverse, catastrophic climate change. We focus on four main areas:
    Producing Sustainable Biomass Feedstock. For most of human 
existence, our lives were based on the products of renewable biomass--
plants and other living material. In the past 150 years, much of our 
economy has come to depend on petroleum and other non-renewable 
resources. The environmental consequences of this transition from 
renewable resources to non-renewable resources are well documented.\2\ 
Biotechnology has developed more sustainable, biobased alternatives for 
many products, including fuels, polymers, and other chemicals. The U.S. 
consumed over 7.5 billion barrels of petroleum in 2019,\3\ some of 
which was turned into plastic; as much as 35 million tons of plastic 
ended up in waste streams annually in recent years.3-4 More 
sustainable options have been developed over recent decades, but 
ultimately they still require a material input. Biobased alternatives 
offer the potential for significantly reduced carbon footprints and 
environmental benefits compared to the traditional systems they 
displace, and these alternatives depend on broad availability of 
sustainable biomass feedstock. At present, there are concerns that not 
enough biomass will be sustainably available to meet growing demand. 
Biotechnology is rapidly reducing the carbon footprint of feedstock 
production by enabling new, sustainable ways to produce usable biomass, 
improving yields on existing crops, developing scalable, low-input 
production systems, and finding new ways to utilize biomass that would 
otherwise be waste.
    Empowering Sustainable Production. Manufacturing is a major 
greenhouse gas emitter, from industrial boilers, chemical production, 
and the release of high-warming-potential gases like methane or 
fluorinated hydrocarbons. Biotech empowers a variety of options to 
reduce emissions from these processes, by reducing the need for energy 
inputs, facilitating more efficient material processing, or replacing 
high-warming-potential gases. Biotechnology has also enabled renewable 
natural gas systems that can displace the fossil-based methane today, 
simply by switching the source of the gas. The U.S. manufacturing 
sector is responsible for 22% of total GHG emissions,\5\ and while no 
single technology or solution can single-handedly solve the problem, 
biotech enables opportunities for lower-emission production across many 
sectors.
    Developing Lower-Carbon Products. As awareness of the climate 
crisis expands, consumers are increasingly demanding lower-carbon 
options and more sustainable replacements for existing products.\6\ 
This means finding low-emission alternatives that provide the same 
level of performance, durability and cost-effectiveness as mature 
fossil-based systems. Biotechnology allows for the production of low-
carbon consumer products through the substitution of biomass or other 
recycled carbon feedstocks and by enabling more efficient, biologically 
based production, satisfying an increasingly important market segment 
while reducing emissions at the same time.
    Enhancing Carbon Sequestration. While there is a lot of uncertainty 
about what a sustainable future may look like, several features are 
common across all likely scenarios. One of these is the deployment of 
massive amounts of carbon capture and sequestration (CCS), which 
converts carbon to a form that does not contribute to climate change or 
stores it underground. CCS cannot be the sole or even the primary 
solution to climate change, but it will make a critical contribution. 
Biotechnology has a key role in advancing CCS techniques, making it 
more scalable, reliable and cost-effective.
2  Technologies
    In this section, we review biotechnology applications to climate 
mitigation in four broad categories: products; agricultural inputs and 
climate services; new biotech tools and bio-industrial manufacturing; 
and plant and animal biotechnologies.
2.1  Products
2.1.1  Advanced Biofuels
    Liquid biofuels were one of the earliest biotechnology products to 
be deployed at scale in the U.S. for the purpose of achieving 
greenhouse gas (GHG) emission reductions. In the early 21st century, 
production mostly took the form of the first-generation biofuels 
ethanol and biodiesel, derived from feedstocks such as corn and 
vegetable oils. Concerns about competition for these feedstocks with 
the food and animal feed sectors prompted the development of second-
generation liquid biofuels that are produced from low-carbon-intensity 
(CI) feedstocks, such as lignocellulosic biomass.
    Existing first-generation biofuels pathways rely heavily on the 
fermentation of starch-rich feedstocks to ethanol and, to a lesser but 
still substantial extent, the transesterification or hydrotreating of 
vegetable oils to biodiesel or renewable diesel, respectively. 
Fermentation is one of the oldest examples of biotechnology, having 
been mastered by humans thousands of years ago for the purpose of 
producing alcoholic beverages. Glucose is easily fermented by the 
microorganism Saccharomyces cerevisiae to yield a diluted form of 
ethanol known in the industry as ``beer''. Distillation of this 
intermediate produces a high-proof ethanol that is then blended with 
gasoline for use in motor vehicles. Most gasoline in the U.S. today 
contains 10% ethanol, with 15% blends increasingly available.\7\
    Advances in biotechnology have enabled U.S. ethanol producers to 
achieve substantial efficiency improvements in recent decades that have 
enabled the volume of first-generation ethanol obtained from a bushel 
of corn to increase by more than 10% between 1982 and 2014.\8\ Milling 
improvements based on improved knowledge of corn kernel composition 
increased conversion efficiency, reducing the amount of corn 
required.\9\ Likewise, a better understanding of yeast biology led to 
ethanol yield optimization via temperature-controlled fermentation.\10\ 
And advanced fractionation techniques have allowed for greater yield of 
co-products, such as distillers dry grains (DDGS), a key animal feed 
ingredient. Together these advances have improved the process economics 
and sustainability of the pathway by reducing costs and waste. The EPA 
estimates them to have resulted in reductions to ethanol's carbon 
intensity in excess of 10%.\11\ A shift to more sustainable growing 
practices, driven by a desire to capture the compliance value of low-
carbon programs such as the California Low Carbon Fuel Standard (LCFS), 
is further reducing the carbon intensity of first-generation fuels. And 
the prospect of deploying carbon capture technology at ethanol plants, 
detailed in section 2.2.2, could reduce the carbon footprint of first-
generation ethanol by an additional 40%.\12\
    Biotechnology has also made a wide range of low-carbon intensity 
feedstocks available for utilization by biofuel producers. Glucose is a 
fundamental building block of plants, and plants possess multiple 
defense mechanisms to protect themselves from yeast and other 
microorganisms that consume glucose. Plants' glucose content takes the 
form of the polysaccharide cellulose that is not digestible by most 
living things (one notable exception being termites). Other simple 
sugars such as arabinose and xylose comprise a second type of major 
polysaccharide that plants contain, hemicellulose. Plants are further 
protected by a third compound with antimicrobial properties, lignin, 
that is cross-linked with cellulose and hemicellulose to protect them 
against attack by microorganisms. These traits allow plants to thrive 
in the wild but have also posed a major hurdle to their use as a 
second-generation biofuel feedstock by inhibiting their conversion to 
ethanol via fermentation.
    Recent progress in the development of biocatalysts and engineered 
microorganisms has made possible the production of ethanol from second-
generation feedstocks such as grasses, shrubs, and other dedicated 
energy crops. The enzymatic hydrolysis pathway employs biocatalysts to 
break cellulose and hemicellulose down to glucose and other constituent 
sugars. The glucose is converted to fuel ethanol in the same manner as 
corn glucose. Microorganisms that are naturally able to ferment glucose 
have been engineered to make them capable of also fermenting simple 
sugars derived from hemicellulose to ethanol, improving both yields and 
efficiencies of lignocellulosic biofuel production.
    An early commercial application of this pathway utilizes the 
lignocellulose that is found in small quantities in corn kernels to 
produce ethanol. Biotech companies POET, Syngenta, and Enogen, among 
others, have begun adding corn kernel fiber conversion units to first-
generation ethanol plants, potentially increasing ethanol yield per 
bushel of corn by nearly 10%.\13\
    The full potential of cellulosic biofuel to mitigate climate change 
will depend on broad deployment of cellulosic technology to 
agricultural residues, municipal solid waste (MSW), and dedicated 
energy crops. An initial wave of cellulosic ethanol biorefinery 
construction occurred following the 2009 implementation of the Federal 
Renewable Fuel Standard (RFS) program. Leading first-generation ethanol 
producers such as POET, LLC, have partnered with leading biotech 
innovators to build first-of-a-kind cellulosic biofuel plants in the 
U.S., Europe, and South America, but low oil prices, policy obstacles, 
and technology challenges have limited global production volumes.
    Advances in biotechnology have expanded the supply of feedstocks 
available to biodiesel and renewable diesel, two of the major success 
stories in sustainable transportation. Biodiesel (BD) is produced via 
the transesterification process in which lipid feedstocks are reacted 
with methanol to yield a fatty acid methyl ester (FAME) that can be 
blended into conventional diesel, without needing any modification to 
the engine. Renewable diesel (RD) is made by hydrotreating the same 
kind of lipid feedstocks, in a process very similar to parts of 
conventional oil refining; it has performance characteristics like 
those of diesel fuel, passes the same product specifications and can be 
used in any diesel engine at any concentration. Historically most U.S. 
BD and RD have been produced from soybean oil.\14\ The need for new 
feedstocks has grown over the last decade, however, as production has 
expanded and policies such as California's Low Carbon Fuel Standard 
(LCFS) have incentivized the use of second-generation low-carbon 
intensity feedstocks. Some of these newer feedstocks are waste products 
that are not as easily converted to biodiesel as first-generation 
feedstocks. Biocatalysts have been developed that improve the 
conversion efficiencies and performance characteristics of biodiesel 
that is yielded from waste feedstocks,\15\ allowing for more of them to 
be converted to low-carbon transportation fuel.
    Biotechnology has also enabled the production of novel low-carbon 
fuels that complement existing ethanol and biodiesel production. First-
generation biofuels have a limited ability to widely displace existing 
fossil fuels due to infrastructure compatibility hurdles. The U.S. only 
allows ethanol blends of up to 15% by volume with gasoline in non-flex 
fuel vehicles\16\ and most diesel engine warranties only cover 
biodiesel blends of up to 20% by volume.\17\ Moreover, neither is 
capable of displacing specialized fossil fuels such as aviation fuel. 
Technological advances have yielded a new category of ``drop-in 
biofuels''--so named for their ability to utilize the existing refined 
fuels infrastructure--that have an even greater de-carbonization 
potential.
    Biobutanol (butanol derived from biomass) was one of the first 
biofuels to gain attention for its drop-in properties, as it chemically 
behaves more like a hydrocarbon than ethanol does. While actually an 
intermediate to renewable hydrocarbons (see below), biobutanol's high 
energy equivalence ratio compared to ethanol and ability to be blended 
with gasoline at rates of up to 16% by volume allow it to displace 
correspondingly larger volumes of gasoline.\18\ Biobutanol is produced 
via fermentation from the same simple sugars as in ethanol production. 
Some biofuel producers have genetically modified ethanol yeast to 
instead produce isobutanol. There are also pathways that utilize 
bacteria for the conversion rather than yeast. Biobutanol can also be 
produced via engineered microorganisms from the carbohydrates in some 
microalgae strains that remain after lipids have been extracted, 
allowing for microalgae to serve as a simultaneous feedstock for both 
biobutanol and biomass-based diesel.\19\
    More recently, biobutanol has attracted interest as a key step 
towards production of the renewable hydrocarbon fuels isooctane and 
sustainable aviation fuel SAF). Unlike biobutanol, which is an alcohol, 
biobased isooctane and SAF are hydrocarbons with performance 
characteristics that are very similar to their fossil counterparts 
(isooctane is an important blending component in gasoline). They are 
true drop-in biofuels in that they can be used in the same quantities 
as the fossil fuels that they displace before encountering 
infrastructure constraints.
    Biotechnology has also enabled the production of SAF directly from 
biomass via fermentation. Historically the conversion of biomass to 
hydrocarbons via fermentation has been limited by the presence of 
oxygen in biomass that has caused microorganisms to favor oxygen-
containing products (e.g., ethanol, butanol). Metabolic engineering has 
been employed to improve the yield of the specific hydrocarbon, 
kerosene, that comprises a common form of aviation fuel by increasing 
the selectivity of fermenting microorganisms.\20\ The microorganisms 
are able to convert sugars derived from a variety of feedstock types to 
SAF.\21\ Hydrocarbons have hydrophilic properties, allowing those 
produced in this manner to avoid the need for the energy-intensive 
distillation step that is required when producing fuel alcohols.
    Biofuels currently supply approximately 12% of U.S. on-road 
transportation fuel.\22\ Ethanol and biodiesel currently comprise the 
large majority of U.S. biofuels consumption. Production of second-
generation biofuels is expected to increase rapidly during the early 
2020s, however, as the new feedstocks and pathways made possible by 
biotechnology breakthroughs are commercialized (see Figure 1).\23\ A 
combination of factors is responsible for this development. First, the 
COVID-19 pandemic has seriously disrupted demand for fossil fuels in 
the U.S. transportation sector, in turn limiting demand for biofuels 
such as ethanol that have restrictive blend limits. Second, policies 
such as the Federal revised Renewable Fuel Standard (RFS2), the 
California Low Carbon Fuel Standard (LCFS) and the Oregon Clean Fuels 
Program incentivize second-generation biofuels, with their lower carbon 
intensities, over first-generation biofuels (and both over fossil 
fuels). Third, whereas the last decade's rapid growth in first-
generation biofuels production has slowed due to supply constraints, 
second-generation feedstocks remain underutilized.\24\
Figure 1: Estimated U.S. biofuel production volumes by type of fuel, 
        2010-2050.
U.S. Production of Selected Biofuels in AEO2020 Reference Case (2010-
        2050)
(million barrels per day (MMb/d))


          Source: U.S. Energy Information Administration.[\25\]

    The carbon intensities of biofuels vary widely depending on 
feedstock(s), conversion processes, and the geographic length of the 
supply chain. California publishes detailed carbon intensities of the 
biofuels that participate in its LCFS for both broad biofuel categories 
as well as individual producers. Ethanol, which has historically been 
the primary source of biofuels under the LCFS by volume, has achieved 
average GHG emission reductions compared to gasoline of between 32% and 
41% in recent years.\26\ Ethanol from waste, or dedicated energy crop 
feedstocks, have achieved GHG reductions of up to 80% with current 
technology.\27\ Continued improvements in feedstock production, 
conversion efficiency, and co-products are expected to yield pathways 
with negative carbon scores.\28\
    Similarly, biodiesel has achieved average GHG emission reductions 
compared to diesel fuel of between 69% and 74% over the same period, 
although individual reduction values range from as low as 50% to over 
90% depending on the feedstock used.\29\ In both cases, California 
reports the lowest carbon intensities for those biofuels that are 
produced from waste feedstocks, illustrating the value that 
biotechnology has provided by helping to make such feedstocks usable by 
biofuels producers.
    Biobutanol from lignocellulosic biomass has yet to achieve 
commercial-scale production volumes and does not have published LCFS 
carbon intensity values as a result. Independent life cycle assessments 
estimate a GHG emission reduction for the biofuel compared to gasoline 
of approximately 66%, which is comparable to ethanol from 
lignocellulosic biomass.\30\ Likewise, SAF from biobutanol is estimated 
to achieve GHG emission reductions compared to petroleum aviation fuel 
of between 60% and 75% depending on the choice of feedstock and 
conversion inputs.\31\
    GHG emissions are not the only form of air pollution that the use 
of biofuels reduces. Emissions of criteria pollutants such as carbon 
monoxide, particulate matter, and sulfur dioxide have a direct impact 
on human health, causing air pollution to be one of the main risk 
factors causing non-communicable diseases globally.\32\ The combustion 
of commonly used biofuels in both blended and unblended forms has been 
found to reduce many, if not all, of the criteria pollutants that are 
emitted by the combustion of petroleum fuels.33-34


      Gevo Case Study

          Gevo is an advanced renewable fuel producer that converts 
        renewable energy to energy-dense liquid hydrocarbons by 
        transforming renewable energy into low-carbon transportation 
        fuels. This next generation of renewable premium gasoline, jet 
        fuel and diesel fuel has the potential to achieve net zero 
        carbon emissions, addressing the market need of reducing GHG 
        emissions with sustainable alternatives while continuing to 
        utilize current infrastructure and vehicles.
          The company originally converted an existing dry-mill corn 
        ethanol facility to a commercial-sized scaled up facility in 
        Luverne, Minnesota. The converted facility utilizes corn starch 
        as feedstock. While corn-based biofuels have not historically 
        been credited with large reductions to carbon intensity 
        relative to gasoline, Gevo employs an integrated approach to 
        carbon intensity reductions that maximizes the environmental 
        and sustainability potentials from agricultural systems, while 
        creating innovative solutions to convert the feedstocks into 
        energy-dense hydrocarbons.
          In January 2021, Gevo announced a new project, planned for 
        construction at Lake Preston, South Dakota, to be named ``Net-
        Zero 1.'' Gevo expects that Net-Zero 1 would have the 
        capability to produce liquid hydrocarbons that when burned have 
        a net-zero greenhouse gas footprint.\35\ Net-Zero 1 is expected 
        to have a capacity of 45 million gallons per year of 
        hydrocarbons for gasoline and jet fuel and will produce more 
        than 350 million pounds per year of high-protein feed products 
        for use in the food chain. In addition to feed and fuel, the 
        facility will produce enough renewable natural gas to be self-
        sufficient for production process needs. The facility will also 
        generate renewable electricity with a combined heat and power 
        system and integrate additional renewable power production 
        utilizing wind energy.
          Gevo's integrated approach utilizes de-carbonization 
        practices across the entire supply chain. It begins by working 
        with the farmers who employ best farming practices that 
        maximize soil carbon sequestration and minimize GHG emissions 
        during the planting, growing, and harvesting stages.\36\ The 
        partnership with farmers involves the active tracking and 
        monitoring of the feedstock suppliers to ensure that best 
        practices are encouraged and in the future can be incentivized 
        for the purpose of consistently minimizing feedstock carbon 
        intensity.
          Gevo also conducts experimental trials to identify additional 
        feedstock de-carbonization routes such as the use of manure in 
        place of nitrogen fertilizer application, enhanced soil carbon 
        sequestration via reduced soil tillage practices, and improved 
        crop yields via microbial soil solutions. The company estimates 
        that its corn feedstock has a carbon intensity that is at least 
        50% lower than the U.S. average.\37\
          Because of the low-carbon-footprint feedstocks, the 
        sustainable agricultural practices used to produce feedstock, 
        and the use of renewable energy for the production processes--
        much of which is expected to be generated on site--the 
        hydrocarbon fuel products produced at Net-Zero 1 have the 
        potential to achieve net-zero greenhouse gas emissions, as 
        measured across the whole of the life cycle, based on Argonne 
        National Laboratory's GREET model. The GREET model takes into 
        account emissions and impacts ``cradle to cradle'' for 
        renewable resource based fuels, including inputs and generation 
        of raw materials, agriculture practices, chemicals used in 
        production processes of both feedstocks and products, energy 
        sources used in production and transportation, and end fate of 
        products.
          Gevo's Luverne facility also makes extensive use of other 
        sources of renewable energy to reduce the carbon intensity of 
        its production process. The production of biofuels such as 
        isobutanol from corn uses process heat and electricity that 
        have historically been obtained from fossil fuels, such as coal 
        and natural gas. And Gevo has installed wind turbines to 
        generate renewable electricity. Minnesota has abundant access 
        to low-cost wind power and Gevo pays ``about the same'' price 
        for electricity as it did prior to the installation of the wind 
        capacity.\38\ In 2019, Gevo announced its intention to utilize 
        renewable natural gas that is produced from dairy manure in 
        place of the fossil natural gas it used to produce process heat 
        in the past.\39\ In both cases, Gevo has been able to take 
        advantage of local renewable energy resources that are supplied 
        directly to the Luverne facility via transmission line and 
        natural gas pipeline.
2.1.2  Renewable Chemicals and Biobased Products/Materials
    Fossil-derived chemicals and products are a key future driver of 
petroleum consumption.\40\ The chemicals sector (known as 
petrochemicals when derived from fossil feedstocks) accounts for a wide 
variety of common products, including plastics, synthetic rubber, 
solvents, fertilizers, pharmaceuticals, additives, explosives, and 
adhesives.\41\ They differ from fossil fuels in that their consumption 
does not normally cause GHG emissions via combustion. They are still 
produced from fossil fuels, though, especially petroleum and natural 
gas, and their production incurs both direct and indirect emissions. By 
one estimate the petrochemicals sector generates 18% of direct 
industrial GHG emissions, and its production capacity is growing 
rapidly.\42\ The sector is also, due to its reliance on fossil fuels, 
an important source of other forms of pollution that have a detrimental 
impact on human health, especially in disadvantaged communities.\43\ 
Moreover, many fossil-derived products such as plastics are resistant 
to degradation and end their useful lives either in landfills or in 
natural environments as litter.
    Biotechnology's contributions to efforts to mitigate the damage 
caused by fossil chemicals and products generally fall into one of two 
broad categories: (1) the replacement of these fossil-derived products 
by non-fossil products, and (2) the replacement of degradation-
resistant materials with biodegradable materials. A substantial amount 
of overlap exists between the two categories due to the novel 
production pathways and product types that have been developed by the 
biotechnology industry. The ability of biomass to replace a wide 
variety of fossil products has greatly benefited from recent 
biotechnology advances that have enabled the manufacture of products 
from both categories.\44\
    The petrochemical industry is expected to become a primary driver 
of demand for fossil fuels by 2030.\45\ Many advances have been made in 
the production of the same chemicals and products from biomass or 
recycled feedstocks rather than fossil feedstocks. One early biobased 
chemical was developed as an extension of biofuels production, allowing 
it to utilize existing production capacity. Ethanol obtained from corn 
and sugarcane, but potentially from lignocellulosic biomass in the 
future, is easily dehydrated to yield a biobased version of the 
plastics precursor ethylene.\46\ Plastics comprise most of the fossil 
chemicals market,\47\ giving biobased plastics an important role to 
play in its de-carbonization.
    Biotechnology companies have also developed biobased versions of 
synthetic fibers that are used by the textile industry. Polyester, 
which is widely employed in the manufacture of textiles and bottles, is 
usually produced from natural gas and/or petroleum feedstocks. Its 
building blocks can instead be obtained either from ethanol, as in the 
production of biobased plastics, or from hydrocarbons that are directly 
converted from biomass feedstocks.48-49 In both pathways the 
resulting fibers are the same as those that are currently produced from 
fossil feedstocks, making them drop-in biobased products.
    Growing concerns over the longevity of plastic waste in the 
environment have also prompted the development of biodegradable 
plastics that are capable of decomposing over short timeframes compared 
to those of traditional plastics. The most common of these are 
polylactic acid (PLA) and polyhydroxyalkanoates (PHA). PLA is derived 
from plant sugars that are naturally fermented by bacteria to yield 
lactic acid. This lactic acid is then chemically converted to PLA for 
use as a biobased plastic.\50\ PHA is produced via the fermentation of 
plant sugars (although vegetable oils and even wastewater can also be 
used) by a different type of bacteria under very specific conditions 
that promote PHA synthesis.\51\ Biobased plastics made from both PLA 
and PHA are biodegradable under higher-temperature conditions such as 
those found in industrial composters.
    Biotechnology breakthroughs have also been made in the replacement 
of lesser known but equally important fossil products. Lubricants made 
from petroleum are in common use throughout the industrial and 
transportation sectors and, while they represent a small share of a 
typical refinery's product mix, they are a critical input for many 
applications (e.g., engine oil). Plant sugars can be fermented by 
bacteria to yield a chemical that is capable of conversion to biobased 
versions of the synthetic lubricants that are normally obtained from 
petroleum.\52\ In a similar application biodiesel, which has a high 
lubricity, is blended with petroleum-derived ultra-low sulfur diesel 
fuel to improve the latter's low lubricity.\53\ Finally, novel 
medicines and medical treatments are being developed through 
biotechnology, including those that are personalized to individual 
patients.\54\
    Renewable chemicals and materials provide climate benefits through 
twin advantages. First, by leveraging biological production platforms, 
biobased products are frequently less energy-intensive to produce than 
their petrochemical counterparts. For example, BASF Corporation has 
developed a biobased home insulation product that results in 66% fewer 
GHG emissions than its fossil-based alternative.\55\ But, perhaps most 
significantly, whether produced from biomass or waste gases, biobased 
products are built from carbon that would otherwise reside in the 
atmosphere, and thus serve as a vital pathway for atmospheric carbon 
removal.
    The direct recycling of GHG emissions, both biogenic and fossil in 
origin, to create chemicals and fuels has emerged as a notable pathway 
over the last decade. Landfills and animal waste lagoons are sources of 
biogenic emissions of the potent GHG methane. Methane is the primary 
component of natural gas, however, making biogenic methane when 
captured a potential biobased chemicals feedstock. Biogas captured from 
landfills and agricultural anaerobic digesters is also directly 
utilized as fuel for natural gas-powered vehicles.\56\ The use of 
biogas in both applications has especially large climate benefits 
because it eliminates a source of methane emissions while 
simultaneously displacing demand for a fossil feedstock (biogas 
combustion converts methane to the comparatively weaker GHG carbon 
dioxide).
    Finally, biotechnology advances have also enabled fossil GHG 
emissions to be captured and recycled via a pathway known as carbon 
capture and utilization (CCU), thereby reducing demand for fossil fuels 
and the resulting emissions without requiring biomass (see Section 
2.2.2). One novel process developed by carbon recycling pioneer 
LanzaTech utilizes engineered microorganisms to ferment emissions 
captured from industrial facilities such as steel mills to either fuels 
or chemicals, depending on the choice of microorganism.\57\ While the 
resulting products are not of biological origin, their climate benefits 
are substantial and comparable to those of biobased products in that 
both partially eliminate the need for fossil fuel extraction and serve 
as sinks for carbon that would otherwise be emitted to the atmosphere.
    Like biofuels, the market for biobased chemicals has been 
constrained by persistent low natural gas and petroleum prices for much 
of the last decade. The lack of mandates or other policy mechanisms in 
the U.S. that internalize biotechnology products' climate benefits have 
made it still more difficult for biobased pathways to compete with 
fossil pathways. That said, a growing interest by many manufacturers 
and their consumers in reducing their climate impacts in service of ESG 
goals has supported an expansion of the U.S. biobased products industry 
despite these hurdles. One recent analysis estimated the industry's 
size to be $459 billion in terms of valued added to the U.S. economy in 
2016, up from $393 billion in 2014 and $353 billion in 2012.\58\ These 
bioproducts were estimated to displace 9.4 million barrels of petroleum 
equivalents in 2016. While still smaller than the fossil products 
sector--the U.S. chemicals industry alone achieved $765 billion in 
sales in 2017 \59\--the U.S. biobased products industry is expected to 
grow rapidly as state governments and corporations increasingly act to 
minimize plastic waste, methane emissions, and other forms of 
pollution.\60\
    Biodegradable biobased products have the potential to substantially 
contribute to climate change mitigation efforts due to their ability to 
achieve net carbon sequestration under certain production conditions. A 
life cycle analysis of the biodegradable bioplastic PHB calculated 
negative GHG emissions for the product when produced from either corn 
or biogas, with the greatest amount of carbon sequestration occurring 
when the PHB is produced from existing PHB that has degraded to 
biogas.\61\ A separate analysis of PHA production determined that the 
bioplastic has a carbon intensity that is 80% lower than that of 
fossil-derived plastics even before taking into account the PHA's 
ability to be recycled following biodegradation.\62\ Biobased PLA for 
use in water bottles has likewise been found to have a substantially 
lower carbon intensity than fossil-derived plastic.\63\ Finally, a 
comparison of multiple chemicals and fuels pathways determined that 
products derived from recycled carbon dioxide achieved carbon intensity 
reductions compared to conventional fossil products despite ultimately 
being derived from fossil feedstocks.\64\
    Biobased products such as renewable chemicals historically have not 
received as much attention from policymakers as biofuels, due to the 
lack of direct emissions resulting from their use. That is changing, 
however, as policymakers in states such as California and New York have 
implemented economy-wide restrictions on GHG emissions. In addition to 
disincentivizing the use of fossil feedstocks in energy-intensive 
manufacturing processes, such policies also encourage entities such as 
steel mills and refineries to develop new revenue streams via the 
implementation of CCU technologies.\65\ Biotechnology provides a wide 
range of options for reducing the carbon intensities of many of the 
biobased chemicals and products upon which the U.S. economy relies.


      Danimer Scientific Case Study

          Biobased PHA is Danimer Scientific's primary bioplastics 
        product. The company manufactures the polyester at a commercial 
        facility in Winchester, Kentucky, by feeding a bacterium with 
        inexpensive vegetable oil feedstock derived from agricultural 
        oilseed crops such as canola, and soy. In addition to directly 
        displacing the fossil fuels used in the manufacture of 
        conventional plastics, Danimer Scientific's production pathway 
        also provides indirect environmental benefits.
          Danimer Scientific obtains vegetable oils via the crushing of 
        oilseeds. The crushing process yields protein-rich byproducts 
        that are employed as a natural fertilizer and livestock feed. 
        The vegetable oils are consumed by soil bacteria that 
        biosynthesize the PHA in a bioreactor. The PHA is then 
        separated from the bioreactor medium, purified, and dried in 
        preparation for conversion to various plastic resins, blending 
        with other biopolymers such as PLA, or bonding with materials 
        such as paper.\66\
          Danimer Scientific's biobased PHA possesses performance 
        parameters that are comparable to those of many fossil plastics 
        and are capable of use in many of the same applications, 
        including food preservation and storage and conversion to 
        multiple types of finished resins. Unlike fossil plastics, 
        however, PHA utilizes only renewable feedstocks and is 
        biodegradable. This latter characteristic is an important 
        advantage over fossil plastics at a time of growing concern 
        over land-filling and the widespread presence of non-
        biodegradable plastic waste in many ecosystems.
        
        
      Genomatica Case Study

          Genomatica has commercialized a more sustainable, biobased 
        technology to make a key ingredient used in apparel, spandex, 
        footwear, and plastics used in electronics and automotive 
        parts. Millions of tons per year of this ingredient, 1,4-
        butanediol (BDO), are currently produced from fossil-derived 
        feedstocks, resulting in many millions of tons per year of 
        greenhouse gas emissions. By contrast, Genomatica's GENO 
        BDOTM process uses renewable feedstocks--the sugars 
        that come from locally-grown crops such as corn and sugarcane--
        along with engineered microorganisms and fermentation. The 
        products made with Genomatica's ingredient have 56% lower 
        carbon intensity,\67\ and their renewable content is 
        traceable--meaning customers know that the carbon actually came 
        from plants. Genomatica's technology also avoids the use of 
        toxic compounds like formaldehyde, common to fossil processes.
          Genomatica's technology has been proven at industrial scale 
        since 2012. Italy-based plastics manufacturer Novamont started 
        production of biobased BDO at a 30,000 ton per year capacity 
        plant in 2016, built with Genomatica's licensed technology. 
        Novamont's BDO has been used in compostable produce bags, mulch 
        film and coffee capsules. BASF has also licensed Genomatica's 
        BDO technology. The Novamont plant is the world's first 
        commercial scale plant to make a widely-used intermediate 
        chemical biologically. Genomatica has received repeated 
        recognition for its innovations, including three EPA Green 
        Chemistry awards, the Kirkpatrick award and ICIS Innovation 
        awards.
2.1.3  Food and Feed Ingredients
    According to the 2019 U.N. IPCC Special Report on Climate Change 
and Land, the global food system--including the land and resources to 
raise animals and grow crops, plus processing, packaging, and 
transportation--is responsible for up to 19.1 GtCO2eq 
annually, or 37% of total net GHG emissions.\68\ The report finds that 
changes in both production and consumption are needed to meet global 
emissions reduction objectives. Biotechnology offers the potential for 
substantial emissions reductions at every stage of the food system, 
including potentially transformative solutions in food and feed 
ingredients.
    Animal products account for the largest segment of food sector 
emissions. According to the FAO, livestock production accounts for 
approximately 7.1 GtCO2eq annually, or 15% of global GHG 
emissions, and consumes roughly \1/4\ of available land worldwide, with 
meat production expected to increase 19%, and dairy production 33%, 
from 2017 levels by 2030.\69\ Solutions that reduce dependence on 
animals offer the greatest potential for emissions reductions from the 
food sector. But, given the growing global demand for meat and other 
animal products, sustainable near-term solutions are also needed for 
animal agriculture. Biotechnology is playing a leading role in the 
development of both new low-carbon product choices and technologies to 
reduce the carbon footprint of animal agriculture.

    Plant-Based Proteins and Food Products

    A recent analysis found that if Americans opted for nutritionally 
equivalent plant-based products for their meat (beef, chicken and pork) 
consumption choices, U.S. GHG emissions would be reduced by 280 million 
metric tons annually--roughly equivalent to the total emissions of the 
state of Ohio.\70\ Consumer concerns with the carbon footprint of 
animal agriculture--along with health and animal welfare 
considerations--are driving strong growth in plant-based proteins and 
food product choices. Many of the leading options leverage 
biotechnology.
    Impossible Foods, the fourth fastest growing brand in the U.S. in 
2019,\71\ uses engineered yeast to add heme, an iron-containing 
molecule found in blood, to its plant-based products to produce a meaty 
flavor. As of September 2020, Impossible Foods burgers were in 11,000 
supermarkets and on the menu of a growing list of national and regional 
restaurant chains.\72\ A 2019 lifecycle analysis of Impossible Foods' 
burger found a 89% reduction in carbon footprint and 96% reduction in 
land use versus traditional beef burgers.\73\
    Perfect Day Foods is bringing a similar approach to milk, cheese 
and ice cream, using genetically engineered microbes to produce animal-
free dairy products.\74\ Given the high carbon intensity of dairy 
products (nearly 12 kilograms of carbon dioxide are produced for every 
kilogram of butter, for example) \75\ plant-based dairy has the 
potential to have an outsized impact.
    Motif FoodWorks, a spinoff of biotech leader Ginkgo Bioworks, is 
employing synthetic biology to develop fermentation-based ingredients 
to enhance the taste and texture of plant-based meat and dairy options. 
Motif is expected to launch its first commercial product--an ingredient 
to improve the flavor of beef substitutes--in 2021.\76\
    One of the more novel applications of biotechnology is cultured 
meat products. New Age Meats is one of several companies working to 
produce cultured meat, an engineered tissue produced in laboratories by 
microorganisms that induce and feed the growth of animal muscle cells 
in a bioreactor. Unlike plant-based approaches, cultured meat is a 
drop-in option for applications in which specific meat attributes are 
desired. Cultured meat production is an energy-intensive process that 
requires more energy than poultry production and almost as much energy 
as pork production (albeit less than sheep or cattle production). But 
cultured meat's lack of methane production and ability to utilize low-
carbon energy sources is projected to reduce GHG emissions up to 96% 
compared to traditional meat products.\77\ Cultured meat production 
also utilizes a small fraction of the land required by livestock 
production, potentially resulting in lower indirect GHG emissions from 
land-use change. Cultured meat's consumer acceptance is currently 
limited by its high production costs and novelty, although this is 
expected to change as the product moves toward commercialization.\78\

    Feed and Feed Ingredients

    Roughly half of animal agriculture emissions result from land use, 
production and processing of animal feed.\79\ Biotechnology is being 
harnessed to address feed-related emissions from multiple angles, from 
development of new, low-carbon feed options and lower-carbon approaches 
to feed production to ingredients that reduce feed waste.
    In addition to developing biotech options for animal products, 
biotech innovation is also being deployed to develop new, low-carbon 
animal feeds. NouriTech, a joint venture between biotech start-up 
Calysta and Cargill, is among a growing list of companies using 
microorganisms to convert methane and other heat-trapping waste gases 
into single-cell proteins or other ingredients for animal feed. In 
addition to recycling GHGs that would otherwise be emitted directly to 
the atmosphere, this process, known as gas fermentation, does not 
require the use of arable land, avoiding the largest source of GHG 
emissions associated with feed production. A lifecycle analysis of 
NouriTech's FeedKind fish feed protein found GHG emissions up to 30 
percent lower than conventional fish meal, depending on the source of 
methane used.\80\ Several biotech businesses are also developing feed 
ingredients using algae. Similar benefits are anticipated.

    Reducing Emissions from Animals

    Another leading source of GHGs from agriculture are emissions from 
the animals themselves. Roughly 40% of all animal agriculture emissions 
is attributable to methane from enteric fermentation in the digestive 
system of ruminant animals, for example.\81\ Biotech solutions are 
being developed to address emissions from cattle, swine, poultry, and 
other animals.
    Cattle are the leading source of animal emissions, due to the large 
numbers of cattle grown globally and their high levels of enteric 
methane production. Microbial feed additives have the potential to 
dramatically reduce enteric methane emissions from ruminant livestock 
by disrupting the methane production process. One ester additive 
suppresses the enzyme that causes methane production in the digestive 
tracts of cattle, reducing methane emissions by 30% or more.\82\ A 
study in peer review of microbial feed additives developed by biotech 
start-up Locus Fermentation Solutions found reduction in methane levels 
of up to 78%.\83\ And recent studies have found methane reductions of 
up to 99% using certain species of algae.84-85 Feed 
additives based on extracts of garlic and citrus have also produced 
strong results.\86\ All three additives are being developed for the 
market. Finally, two other feed additives that are already on the 
market, one a yeast culture \87\ and the other a blend of essential 
oils,\88\ reduce dairy cow methane emissions indirectly by increasing 
the efficiency of milk production, thereby reducing the number of 
methane-emitting dairy cows needed to produce a certain volume of milk.
    Biotech enzymes from Novozymes and others have also been introduced 
into pig and chicken feed to improve nutrient uptake, reduce waste, and 
substantially reduce carbon footprint.\89\
    Emissions of methane and nitrous oxide from manure is another 
significant source of GHGs, accounting for ten percent of emissions 
from animal agriculture.\90\ As mentioned previously, biotechnology has 
a key role in reducing these emissions as well. The use of anaerobic 
digestion in animal agriculture has the potential to reduce U.S. GHG 
emissions by 151 MTCO2eq. annually by 2050 using current 
technology.\91\ Considerable research and development is also underway 
to utilize biotechnology to improve the efficiency of anaerobic 
digestion through optimization of the microbes and microbial 
communities used.\92\
    Open manure lagoons are capable of both reducing existing methane 
emissions and displacing fossil fuels when converted to enclosed 
anaerobic digesters. These systems capture the lagoons' methane 
emissions in the form of biogas that can be used to displace fossil 
fuels such as natural gas as a source of heat and/or electricity. The 
combustion of the biogas converts the methane into the less-potent GHG 
carbon dioxide. (One ton of methane has 84 times the global warming 
potential over 20 years of a ton of carbon dioxide.) \93\ This 
capability, when combined with fossil fuel displacement, can result in 
carbon intensity values for biogas that are very negative despite not 
involving net carbon sequestration. Biogas that is produced from dairy 
manure and injected into natural gas pipelines for use as 
transportation fuel in compressed natural gas vehicles under 
California's LCFS has received certified carbon intensities that are 
almost four times lower than that of gasoline, for example.\94\ One 
estimate calculated that up to 3% of total U.S. electricity consumption 
could be met by biogas produced in manure lagoons and captured for use 
with microturbines.\95\
    Increased demand for animal protein will cause the livestock 
sector's contribution to global GHG emissions to increase in the years 
ahead. The use of biotechnology to limit the climate change impacts of 
livestock production is at a comparatively early stage of development 
due to a lack of low-carbon incentivizes, such as those that have 
existed in the U.S. power and transportation sectors since the turn of 
the century. Biotechnology has the potential to drive both near-term 
and long-term GHG emission reductions in the livestock sector, however. 
Feed additives and the use of enclosed anaerobic digesters can reduce 
near-term emissions.

    Food and Feed Waste

    Waste from food and feed production and delivery is also a 
significant source of GHG emissions. Nearly \1/3\ of all food produced 
is wasted annually. This food waste had a carbon footprint of 3.3 
GtCO2eq in 2007, representing seven percent of total global 
GHG emissions, according to the FAO.\96\ Biotech solutions are 
available or under development to reduce food waste at multiple stages 
of the food and feed system.
    The use of enzymes in bread and other baked goods has significantly 
enhanced product shelf life and reduced waste.\97\ Organic acids and 
other products of industrial biotechnology have been developed by BASF 
and others to reduce spoilage of animal feeds.\98\ Other biotech 
innovators are developing biobased antimicrobial coatings to reduce 
spoilage and inhibit pathogens in fruits and vegetables.\99\ Others 
still are focusing on the use of biosensors to optimize produce 
ripeness to minimize spoilage.100-101

    Food Ingredients

    Biotechnology is also reducing the carbon footprint of a variety of 
food ingredients. The plant-based sweetener, stevia, for example has 
shown an 82% reduction in carbon footprint compared with beet sugar and 
a 64% reduction compared with cane sugar.\102\ But the most desirable 
compounds of the stevia leaf are present in very low concentrations, 
limiting its market. Biotech leaders Evolva and DSM have developed 
pathways to produce those key stevia compounds through fermentation. 
Both have formed partnerships with Cargill and began production of 
fermentation-based stevia at commercial scale in 2019. Cargill's 
initial lifecycle assessment suggests the fermentation-based stevia has 
an even lower carbon footprint than the plant-based extract.\103\ 
Nearly 200 million tons of sugar are produced globally each year.\104\ 
With a carbon footprint of 241 kg CO2e per ton of 
sugar,\105\ the sugar sector accounts for roughly 48 MTCO2 
annually.

------------------------------------------------------------------------
                                         Applications in Food and Feed
            Biotechnology                            Waste
------------------------------------------------------------------------
Organic Acids                         Reduce Spoilage In Animal Feeds
Biobased Coatings                     Reduce Spoilage and Inhibit
                                       Pathogens in Fruits and
                                       Vegetables
Biosensors                            Optimize Ripeness to Minimize
                                       Spoilage
Plant Genetic Engineering             Develop Food Varieties With Less
                                       Spoilage
Animal Genetic Engineering            Develop Farmed Animals That
                                       Require Less Food
------------------------------------------------------------------------

    As another example, vanillin, one of the most widely used synthetic 
food ingredients, was traditionally produced through a carbon- and 
energy-intensive process using coal tar. New biotech routes now allow 
for purer production without reliance on extraction or processing of 
fossil fuels.\106\

    Food Processing

    Biotech enzymes are also being used to dramatically lower the 
carbon footprint of food processing. The most significant example is 
the use of enzymes in meat processing. By eliminating energy-intensive 
traditional processing steps, industry-wide integration of enzymatic 
processes for meat processing would result in over 100 
MTCO2e annually, according to the World Wildlife Fund. 
Smaller, but significant, reductions would result from adoption of 
enzymatic processing in fish and dairy processing, and beer and wine 
production. WWF estimated the total potential reductions from enzyme 
applications in the food sector at 114 to 166 MTCO2e 
annually.\107\
Figure 2. Potential GHG reductions from applications of biotechnology 
        in the food industry. 
        
        
          Source: Figure 5, https://wwfeu.awsassets.panda.org/
        downloads/wwf_biotech_technical_report.pdf.
        
        
      Veramaris Case Study

          Fish are among the lowest carbon intensity sources of 
        meat.\108\ As global demand for animal products continues to 
        grow, and with most of the world's wild fish stocks at, or 
        beyond, sustainable harvest levels,\109\ aquaculture--farmed 
        fish and other seafood--will play a key role in mitigating the 
        impact of meat consumption on the climate.
          Salmon aquaculture is the fastest-growing food production 
        system in the world.\110\ Salmon's popularity and relatively 
        low-carbon intensity make it an attractive option to displace 
        some of the projected growth in the consumption of beef and 
        other higher carbon intensity meats. The growth of salmon 
        aquaculture is currently limited by the availability of the 
        marine omega-3 oils EPA and DHA, key components of salmon 
        diets. Marine omega-3 oils have, until recently, been derived 
        almost exclusively from wild-caught oily fish, such as anchovy 
        and menhaden, whose wild stocks are limited and increasingly 
        threatened by climate change.\111\
          Veramaris, a joint venture between biotech leaders DSM and 
        Evonik Industries, has eliminated this supply chain and 
        sustainability barrier by developing a biotech approach to 
        marine omega-3 oil production. Veramaris identified marine 
        algae that produce EPA and DHA naturally, and recently began 
        commercial production of algae-based omega-3 oils at a $200 
        million facility in Blair, Nebraska.\112\ The facility can 
        produce omega-3 oils equivalent to 1.2 million tons of wild-
        caught fish, enough to supply 15 percent of salmon farming 
        industry demand,\113\ and has brought jobs and economic 
        development to a region hit hard by low commodity prices and 
        recent trade disputes.
          By sourcing omega-3 oils from locally grown algae, Veramaris 
        also dramatically shortens the feed supply chain, reducing 
        emissions associated with the harvesting, processing, and 
        transport of fish oil.
2.2  Agriculture Inputs and Climate Services
2.2.1  Agricultural Biological
    Modern agriculture is an energy-intensive process. In addition to 
the need to fuel heavy machinery, many farming practices release carbon 
dioxide from both biogenic and fossil sources that would otherwise 
remain stably sequestered. Intensive tilling practices expose soil 
carbon to the atmosphere, allowing it to react with oxygen to form 
carbon dioxide. Nitrogen fertilizers increase the sequestration 
potential and minimize the land footprint of crops, but they are 
derived from fossil fuels such as natural gas and generate the potent 
GHG nitrous oxide. Advances in crop science and technology can mitigate 
some of these unwanted environmental effects. No-till agriculture using 
herbicide-resistant crops limits soil disruption and reduces the amount 
of soil carbon that is released to the atmosphere as carbon dioxide. 
The development of crop varieties with added or improved nitrogen-
fixing capabilities allows for more efficient use of nitrogen 
fertilizer when combined with crop rotation practices.\114\ And the 
engineering of commonly used crops to give them resistance to 
environmental threats such as drought and pests enhances their carbon 
sequestration potential while minimizing indirect GHG emissions from 
deforestation.
    One of the fastest growing, and most promising, applications of 
biotechnology is in agricultural biologicals. Soil microorganisms play 
a key role in plant growth, enabling efficient access to nutrients and 
protecting against pests and diseases. Ag biologicals leverages 
biotechnology to improve soil microbes and enhance these natural 
processes. A major area of focus for ag biologicals companies is 
increasing plant uptake of nitrogen to allow for more efficient use of 
synthetic nitrogen fertilizer. Synthetic nitrogen fertilizer is a 
significant source of climate-warming gases. It is energy intensive to 
produce, and a substantial fraction of the nitrogen in fertilizer 
becomes nitrous oxide (N2O) a greenhouse gas 298 times more 
potent than carbon dioxide. Joyn Bio, a joint venture between the 
synthetic biology company, Ginkgo Bioworks, and Bayer, is engineering 
microbes to enable cereal crops like corn, wheat, and rice to convert 
nitrogen from the air into a form they can use to grow, allowing for 
more efficient use of synthetic fertilizers for many of the world's 
leading crops.
    Other biotech researchers and businesses are developing nitrogen- 
and carbon-fixing bacteria or algae to build soil carbon and enhance 
the absorption of atmospheric nitrogen by soils.115-116 And 
biotech innovators such as Vestaron are developing safer, more 
sustainable crop protection tools, such as biological peptides, to 
provide crops with greater resiliency to plant stress induced by 
climate change.\117\


      Joyn Bio Case Study

          Nitrogen is an essential nutrient for plant growth, but the 
        abundant nitrogen in the atmosphere is not in a form that 
        plants can use. Soybeans, peanuts, and other legumes have 
        developed a symbiotic relationship with nitrogen-fixing 
        microorganisms in the soil that convert nitrogen from the air 
        into a form they can absorb through their roots. But cereal 
        crops like corn, wheat, and rice don't have this ability, and 
        require the addition of fertilizers to maximize growth.
          Synthetic nitrogen fertilizers have revolutionized farming, 
        but are a potent source of agricultural greenhouse gas 
        emissions. They are energy intensive to produce, and a 
        substantial fraction of the nitrogen in fertilizer becomes 
        nitrous oxide (N2O) a greenhouse gas up to 298 times 
        more potent than carbon dioxide.\118\ Joyn Bio, a joint venture 
        between the synthetic biology company, Ginkgo Bioworks, and 
        Bayer, is using biotechnology to reduce agricultural GHG 
        emissions by designing nitrogen-fixing soil microbes that work 
        with corn and other cereal crops, allowing for more efficient 
        use of synthetic fertilizers for many of the world's leading 
        crops.
2.2.2  Biological Carbon Capture, Use and Storage
    Biomass is one of America's major, albeit transitory, carbon sinks. 
All forms of biomass that employ photosynthesis capture atmospheric 
carbon dioxide and convert it to carbon-based compounds such as sugars, 
starch, and lignocellulose. The carbon content of this biomass remains 
sequestered until the biomass is either consumed or decomposes, at 
which time much of it is oxidized and released back to the atmosphere 
as carbon dioxide. Some of the carbon content, such as that contained 
in a plant's roots, is sequestered for much longer time periods in the 
form of below-ground biomass. It is for this reason that the 
afforestation/reforestation of marginal land can result in the 
formation of new carbon sinks and the long-term removal of carbon 
dioxide from the atmosphere.
    Carbon that is sequestered as below-ground biomass can remain in 
that state so long as the surrounding soil is not disrupted. The length 
of time that biomass's aboveground carbon content remains sequestered 
depends on how the biomass is utilized. The combustion of biomass, 
whether in its natural form or following conversion to biofuel, results 
in the oxidation and release of its carbon content as carbon dioxide. 
While carbon-neutral in the sense that the released biogenic carbon had 
been captured from the atmosphere during the growing season, 
traditional combustion prevents the carbon from being either 
sequestered or reused prior to the completion of another growing 
season.
    A variety of biotechnologies have been developed that either 
capture and sequester or recycle atmospheric carbon dioxide. Many of 
these processes are closely related to the biobased products covered in 
Section 2.1 because of the ability of biomass to capture atmospheric 
carbon dioxide before being converted to different fuels and products. 
The technologies in question impact every stage of the biomass supply 
chain, from growth/production to conversion and ultimately end-of-life 
disposal.
    Carbon capture and storage (CCS) technologies enable carbon dioxide 
emissions from fossil power plants or industrial facilities, such as 
cement or steel, to be captured at the facility and stored underground. 
A variety of approaches have been developed to absorb carbon dioxide 
from flue gases, or to remove carbon prior to combustion.\119\ CCS can 
also be deployed at facilities utilizing biomass as feedstock. The 
process is largely the same as that employed at some fossil fuel 
facilities but, whereas fossil energy carbon capture and sequestration 
(FECCS) processes reduce the GHG emissions of fossil fuels, biomass 
energy carbon capture and sequestration (BECCS) processes actually 
reverse past emissions. The biomass captures atmospheric carbon dioxide 
during its growth phase and is then combusted, yielding both energy and 
carbon dioxide. The bioenergy displaces fossil energy and the carbon 
dioxide is either sequestered in underground caverns as a gas or 
converted to a degradation-resistant solid such as biochar. BECCS is 
therefore a carbon-negative process in that it results in more carbon 
dioxide being sequestered than emitted. Biotechnology advances that 
increase the growth rate, growth potential, and harvest efficiency of 
biomass that is used as BECCS feedstock all enhance the process's 
carbon sequestration capability.
    BECCS technology can also be deployed to achieve negative carbon 
results at any industrial facility using biomass as a feedstock. 
Perhaps the most intriguing application of BECCS is its potential use 
at ethanol plants and other biorefineries. One third of the carbon in 
the biomass feedstock used to produce ethanol is released in the form 
of carbon dioxide during the fermentation process. Using BECCS to 
capture this CO2 reduces the carbon intensity of ethanol by 
40%.\120\ Biorefineries represent an extremely attractive option for 
deploying BECCS because the product of fermentation is a nearly pure 
(99%) stream of CO2, requiring little or no separation from 
other gases. As a result, biorefinery BECCS is among the lowest-cost 
carbon capture opportunities available, at an estimated cost of under 
$30 per ton of CO2 compared to $60-$120 per ton at fossil 
power plants or traditional industrial facilities.\121\ The world's 
first ethanol BECCS project is now in operation in Decatur, Illinois, 
capturing and storing 1 MTCO2eq per year that would 
otherwise have been emitted to the atmosphere.\122\
    In addition to its role in providing biomass feedstocks for BECCS, 
biotechnology is increasingly seen as a key enabling technology for 
carbon capture itself. The U.S. Department of Energy (DOE) has invested 
over $150 million since 2015 in the development of algae and other 
microbial systems for carbon capture as an alternative--or 
complimentary--approach to chemistry-based approaches to CO2 
extraction from flue gases.\123\ Microbial systems have several 
significant advantage over thermochemical approaches to carbon capture. 
Typical thermochemical CCS systems are highly energy intensive. Roughly 
30% of captured carbon is offset by the additional fossil fuel 
combustion required to separate, compress, and transport the captured 
carbon.\124\ Microbial systems can dramatically reduce this ``parasitic 
load.'' Algae and other microbes extract CO2 or other target 
gases biologically, via photosynthesis or other natural energy 
pathways, eliminating the energy inputs required for separation. 
Microbial systems can even operate efficiently at the relatively low 
CO2 concentrations found in flue gases from natural gas or 
coal-fired power plants, and can be deployed economically at relatively 
small scale to address emissions from smaller power plants and 
industrial facilities that cannot support traditional CCS systems. 
Microbial systems also convert the captured carbon into a usable solid 
or liquid form directly, eliminating the substantial energy inputs 
required to compress captured CO2 for transport, or for use 
in enhanced oil recovery. As such, microbial carbon capture systems 
applied to biomass energy or other biorefinery systems offer one of the 
most carbon-negative climate solutions available.
    DOE in its 2016 Billion Ton Report found that suitable land and 
other infrastructure exists to deploy algae-based carbon capture 
systems at more than 500 power plants and ethanol facilities in the 
U.S. These systems would have a potential to capture more than 200 MT 
CO2 annually.\125\
    Biomass and carbon capture can then be combined with the carbon 
dioxide recycling technologies discussed in Section 2.1 to produce 
negative-carbon products from captured biogenic carbon. The biomass 
energy carbon capture and utilization (BECCU) process displaces both 
fossil energy consumption and fossil fuel emissions. As with BECCS, 
BECCU uses biogenic carbon to generate energy via combustion, 
displacing fossil fuels in the process. The resulting carbon dioxide is 
captured but, instead of being sequestered, is converted into yet 
another fuel or product that displaces additional fossil fuels. BECCU 
can still be carbon-negative, either because it displaces more carbon 
dioxide emissions from fossil fuels than it emits when the utilization 
takes the form of conversion to biofuels or biodegradable products, or 
because the utilization takes the form of conversion to non-
biodegradable products.\126\ In the latter case, carbon sequestration 
still occurs, but in a long-lifetime product, rather than geologic 
storage.
    BECCS and BECCU are not widely employed in the U.S. at present due 
to a relative lack of economic or policy incentives for the capture of 
carbon dioxide. Those CCS projects that do exist in North America 
involve fossil rather than biogenic sources of carbon.\127\ That said, 
climate scientists increasingly believe that the two technologies will 
need to be widely utilized if catastrophic climate change is to be 
avoided. The UN's Intergovernmental Panel on Climate Change (IPCC) has 
concluded that keeping the atmospheric carbon dioxide level below 450 
ppm by 2100, as is necessary if catastrophic climate change is to be 
avoided, will require the ``availability and widespread deployment of 
BECCS and afforestation.'' \128\ The primary hurdle facing BECCS/BECCU 
commercialization is one of economics rather than technology: carbon 
capture is economically unattractive at a time when the cost of 
emissions is lower than the cost of capture.\129\ The technical 
feasibility of capture and sequestration is especially well-established 
for those technologies that rely upon natural processes such as the 
building of soil carbon via afforestation/reforestation or the planting 
of certain dedicated energy crops. BECCU also offers an advantage over 
BECCS in the absence of a high emissions cost due to its production of 
higher-value products such as fuels or chemicals; BECCS, by contrast, 
produces lower-value products such as heat and electricity.\130\
    The ability of BECCS to achieve net-negative carbon emissions and 
their magnitude depend on several different factors involving the 
different stages of the supply chain. A comparison of multiple biomass 
feedstocks combusted in a power plant equipped with CCS technology 
determined that while growth of the three feedstocks considered 
(Miscanthus, switchgrass, and willow) all have the potential to achieve 
net sequestration, the actual amount of sequestration that occurs is 
determined by biomass transportation distances, carbon capture rates, 
and especially land-use change (e.g., what type of land that the 
biomass feedstock is grown on).\131\ The analysis calculated that the 
amount of carbon dioxide ultimately sequestered on average while 
generating 1 megawatt hour of electricity via BECCS with Miscanthus and 
switchgrass is equal to the average amount emitted by U.S. power plants 
to generate an equal amount of electricity.
    BECCU has also been found to achieve low-to-negative carbon 
intensities. A life cycle assessment that compared the carbon 
intensities of ethanol produced from steel mill waste gases found its 
carbon footprint to be at least 60% lower than that of gasoline.\132\ 
Dedicated energy crops such as Miscanthus and willow grown for the 
purpose of electricity generation have been found to achieve net-
negative emissions of carbon dioxide due to the combined effects of 
soil carbon sequestration and the displacement of fossil fuels.\133\ A 
different analysis found emissions via afforestation/reforestation to 
also be negative even if the forest is harvested and utilized as wood 
products such as sawtimber, as these constitute a different form of 
BECCU.\134\
    The carbon dioxide reduction and sequestration potential of BECCS/
BECCU technologies is very sensitive to land-use change. For example, 
the largest amount of sequestration occurs when dedicated energy crop 
growth or afforestation/reforestation occurs on abandoned or marginal 
croplands that have previously had their soil carbon depleted. On the 
other hand, the conversion of grassland to these uses results in a 
reduced sequestration potential, while the conversion of productive 
cropland can have the lowest sequestration potential of all if the 
resulting decrease in the supply of the crop causes the conversion of 
land such as forest to cropland somewhere else. Biotechnology provides 
several methods for mitigating these unintended consequences through 
advances in plant and crop science that are described in more detail in 
Section 2.4.1.


      LanzaTech Case Study

          LanzaTech is unique for its ability to make low-carbon fuels 
        and chemicals from a variety of waste-based feedstocks, 
        including industrial emissions, unsorted, unrecyclable 
        municipal solid waste, and agricultural or forestry wastes and 
        residues. The company utilizes a naturally occurring bacteria 
        originally isolated from rabbit droppings. As part of its 
        natural biology, the bacteria ferments gases containing carbon 
        dioxide, carbon monoxide, and/or hydrogen into ethanol. This 
        ethanol can be used directly as a fuel to displace gasoline or 
        as a chemical in consumer products.\135\ Additionally, ethanol 
        can be upgraded to make consumer goods from polyethylene \136\ 
        or PET, and to make sustainable aviation fuel (SAF) via the 
        LanzaJet Alcohol-to-Jet pathway,[i] to displace 
        fossil fuel demand in the aviation sector. The opportunities 
        for LanzaTech's technologies to utilize waste carbon to produce 
        multiple low-carbon fuels and chemicals has expanded over the 
        last decade as its technology has been licensed worldwide.
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    \[i]\ http://www.lanzatech.com/2019/11/22/lanzatech-moves-forward-
on-sustainable-aviation-scale-up-in-the-usa-and-japan/.
    Editor's note: there appears to be a discrepancy in the numbering 
of the footnotes. Footnotes 137-139 were used in the LanzaTech Case 
Study and were duplicated in the following section. To avoid confusion 
the LanzaTech Case Study footnotes are renumbered [i]-[iii].
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          The LanzaTech pathway differs from conventional ethanol 
        production in that it feeds its microorganisms with a gas 
        stream rather than a liquid sugar substrate. While carbon is 
        the most important ingredient in this gas stream, the 
        microorganisms are capable of fermenting gases produced from a 
        variety of industrial processes and feedstocks. The gases are 
        captured and compressed before being delivered to a bioreactor 
        where fermentation to ethanol occurs. The ethanol is then 
        recovered from the bioreactor and stored for future use either 
        in that form or following subsequent upgrading to a hydrocarbon 
        fuel.
          The first commercial-scale facility to utilize LanzaTech's 
        pathway is a steel mill located near Beijing, China. Waste 
        gases produced at the mill are captured and fermented to 
        ethanol at a rate of 16 million gallons per year. The company 
        estimates that the recycling of the mill's GHG emissions in 
        this manner is the equivalent of removing 80,000 cars from the 
        road annually.[ii] The success of the technology at 
        such a large scale has resulted in plans to apply it to other 
        types of industrial facilities, including a petroleum refinery 
        in India that will achieve an annual ethanol yield of 11 
        million gallons, a steel mill in Belgium that will achieve an 
        annual ethanol yield of 21 million gallons, and a smelter in 
        South Africa that will achieve an annual ethanol yield of 17 
        million gallons.
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    \[ii]\ http://www.cnbc.com/2018/07/27/lanzatech-turns-carbon-waste-
into-ethanol-to-one-day-power-planes-cars.html.
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          Beyond recycled carbon fuels, LanzaTech's platform can make 
        second generation biofuels through gasification of biomass 
        wastes and residues. LanzaTech is developing a project to 
        convert locally available agricultural residues to 
        approximately 5.3 million gallons per year of fuel grade 
        ethanol in India, using commercially proven gasification 
        technology and LanzaTech's commercially proven gas fermentation 
        platform. The integrated technology will have the flexibility 
        to process a wide range of biomass feedstocks enabling rapid 
        replication at other locations.
          A by-product of the project will be a nutrient rich biochar. 
        Biochar can be a useful soil supplement to enrich soil organic 
        carbon and other nutrients. In 2018, LanzaTech launched a new 
        company, LanzaJet to accelerate the commercialization of SAF 
        production. The LanzaJet process can use any source of 
        sustainable ethanol for jet fuel production, including, but not 
        limited to, ethanol made from recycled pollution, the core 
        application of LanzaTech's carbon recycling platform.
          Commercialization of this process, called Alcohol-to-Jet 
        (AtJ) has been years in the making, starting with the 
        partnership between LanzaTech and the U.S. Energy Department's 
        Pacific Northwest National Laboratory (PNNL). PNNL developed a 
        unique catalytic process to upgrade ethanol to alcohol-to-jet 
        synthetic paraffinic kerosene (ATJ-SPK) which LanzaTech took 
        from the laboratory to pilot scale. SAF produced via the 
        company's pathway has already been employed in two commercial 
        flights to demonstrate its ability to displace fossil aviation 
        fuel.[iii] LanzaTech estimates that SAF produced 
        using its technology achieves a 70% reduction to carbon 
        intensity compared to fossil aviation fuel.
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    \[iii]\ http://www.lanzatech.com/2018/10/04/virgin-atlantic-
lanzatech-celebrate-revolutionary-sustainable-fuel-project-takes-
flight/.
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2.3  New Biotech Tools and Bioindustrial Manufacturing
2.3.1  New Biotech Tools
    Rapid advances in the fundamental tools of biotechnology 
increasingly are enabling biotech solutions in manufacturing sectors 
beyond food, fuels and chemicals. These developments offer the 
potential for transformative climate solutions in applications beyond 
manufacturing as well.
    Biotech tools for manipulating DNA have been in use for decades. 
Many of the most important contributions of biotechnology--vaccines and 
therapies, biotech crops, and modern industrial biotechnology--were 
made possible by this first generation of genetic engineering tools. 
But the past decade has seen a wave of new biotech tool innovation with 
transformative potential. In synthetic biology, scientists insert 
synthesized pieces of DNA into an organism's genome to alter the 
characteristics or function of the organism. In genome editing, 
scientists use tools to make more precise changes to the organism's own 
DNA to achieve the same outcome.\137\ These and other new biotech tools 
have dramatically increased the speed and reduced the cost of genetic 
engineering applications and are being deployed to tackle a range of 
global challenges, including climate change.\138\
2.3.2  Applications of Bio-Manufacturing in Traditional Industries
    Some of industrial biotechnology's earliest uses were in the 
application of enzymes to improve efficiency and reduce energy use in 
traditional industries. The introduction of enzymes for pulp and paper 
bleaching, for example, reduced energy consumption 40% versus 
traditional bleaching, and a shift to fermentation-based production of 
riboflavin (vitamin B2) in the early 2000's reduced 
associated CO2 emissions 80% compared to the traditional 
chemical manufacturing route.\139\ Applications of enzymes in textile 
processing, such as pretreatment, bleaching and desizing, save 
approximately 10 MTCO2e annually today. Full adoption of 
these technologies would triple these reductions. The widespread use of 
enzymes in laundry and dishwasher detergent could save an additional 30 
MTCO2e annually by 2040 by allowing for cold-water washing 
of laundry and more efficient dishwashing. Full market penetration of 
biotech applications in these traditional industries is estimated to 
save 65 MTCO2e annually by 2030.\140\ While these GHG are 
incremental relative to the global challenge of climate change, they 
represent near-term opportunities that will be essential to reducing 
near-term emissions.
GHG reduction potential from applications of biotechnology to 
        traditional industries. 
        
        
          Source: Figure 7, https://wwfeu.awsassets.panda.org/
        downloads/wwf_biotech_technical_report.pdf.
2.3.3  New Markets and Novel Applications
    With the emergence of synthetic biology and the ability to tailor 
microbes to specific industrial tasks, industrial biotechnology 
solutions are moving into an ever-expanding range of applications. A 
rapidly growing number of companies, such as Gingko Bioworks, Arzeda, 
and Twist Biosciences, are providing organism design and DNA synthesis 
services, using synthetic-biology and other modern biotechnology tools 
to optimize manufacturing pathways. SynBio companies raised over $1 
billion in investment in the second quarter of 2019 alone.\141\ One 
intriguing potential application of these new biotech tools is in 
biological data storage, the storage of data on strands of DNA instead 
of semiconductors or magnetic devices. DNA is roughly a million times 
denser than conventional hard-disk storage. Testing is now underway 
with computers that store data by synthesizing strands of DNA. A shift 
to biological data storage would eliminate the need for mining and 
production of silicon or precious metals. More significantly, it could 
dramatically reduce the need for massive data storage facilities.\142\ 
Energy consumption by data storage facilities already accounts for 2% 
of global GHG emissions, and is projected to surge to 14% of global 
emissions by 2040.\143\ DARPA, the Defense Department's Advanced 
Research Projects Agency, is investing $15 million in work by 
Microsoft, Twist Bioscience, and others to develop DNA storage.\144\ A 
collaboration between the University of Washington and Microsoft 
successfully demonstrated their fully-automated end-to-end DNA storage 
process in 2019.\145\
    Biology-based parallel computing--in which biomolecules are used to 
test a large number of solutions to a problem simultaneously--is also 
being evaluated as another potential application of biotechnology. A 
proof of concept experiment at McGill University yielded a solution to 
a complex mathematical problem with less than 0.1% of the energy 
required to solve the problem with traditional computing.\146\
    Synthetic biology is also being deployed to accelerate the 
development of solutions to the COVID-19 pandemic.
    In addition to applications in manufacturing, synthetic biology has 
the potential to provide transformative solutions for carbon dioxide 
removal from the atmosphere and oceans.\147\
    Synthetic biology could be applied to enhance photosynthetic 
efficiency of trees, or reduce respiration from soil microbes, to shift 
natural carbon cycles towards carbon removal. Even small improvements 
in these natural carbon cycles could have profound impacts, given that 
120 GTCO2e is removed from the atmosphere by terrestrial 
photosynthesis.\148\ As discussed in section 2.2.2, deployment of 
microbial systems for carbon capture has the potential to further draw 
down atmospheric carbon concentrations.*
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    * Editor's note: there is no corresponding footnote reference for 
footnote 149. The reference as been incorporated herein as follows:


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      Inscripta Case Study

          The power of synthetic biology lies in its ability to make 
        possible microbes to perform any task. SynBio innovators are 
        applying the tools of their trade to design microbes to make 
        plastics from plants, optimize fertilizer, capture carbon and 
        even combat COVID-19. But unlocking the full potential of 
        synthetic biology to take on the world's greatest challenges--
        including climate change--will require synbio tools to be 
        available to every scientist or biotech start-up.
          Jennifer Doudna at the University of California, Berkeley, 
        and Emmanuelle Charpentier at the Max Planck Institute in 
        Berlin were awarded the 2020 Nobel Prize in Chemistry for their 
        work in developing the CRISPR gene editing technique, an 
        approach that has revolutionized genetic engineering. But, 
        until recently, CRISPR technology was prohibitively complex and 
        expensive for most researchers.
          In 2019, Boulder, Colorado-based Inscripta flipped the 
        script, launching an affordable system that can perform 
        thousands of gene edits at the push of a button.\150\ This 
        innovation has attracted hundreds of millions of dollars in 
        venture capital investments and a growing list of global 
        customers, many of whom will surely apply the technology to 
        addressing global climate change.
2.4  Plant and Animal Biotechnology
2.4.1  Plant Biotechnology and Gene Editing
    Biomass has a critical role to play in efforts to mitigate climate 
change. As described in Sections 2.1 and 2.2, biomass can replace a 
wide variety of fossil fuels and products, reducing or even 
sequestering carbon dioxide emissions in the process. At the same time, 
though, biomass can contribute to climate change if it is used 
unsustainably, and it will need to adapt to unprecedented growing 
conditions as the planet continues to warm. Biotechnology is providing 
important advantages on both counts, enhancing the amount of biomass 
that can be sustainably harvested while also improving the climate 
resiliency of many important crops and other plants.
    Genetically modified organisms (GMO) have been used since the 1990s 
to make important crops such as grains and oilseeds resistant to common 
threats including drought and pests. These past breakthroughs mitigated 
climate change by reducing the amount of land required by the 
agriculture sector. Yields of corn per acre in the U.S. increased by 
approximately 60% between 1991 and 2019 \151\ while those of soybeans 
increased by almost 50% over the same period.\152\ There were fewer 
acres of cropland in production in the U.S. in 2012 than there were in 
1945,\153\ despite the large increases to the U.S. and world 
populations that occurred over that time, due to this improved 
productivity.
    It is important that these productivity increases continue to be 
made in the coming decades if agriculture's contributions to climate 
change are to be limited. The continued growth of the global population 
will create additional demand for crops at a time when growing seasons 
and conditions are expected to become more uncertain due to climate 
change.\154\ Future food crop shortages, whether due to increased 
demand from population growth or crop failures caused by extreme 
weather, would potentially contribute to climate change by encouraging 
the conversion of carbon sinks such as grassland and forests to 
cropland, thereby releasing carbon dioxide sequestered in the biomass 
and soil to the atmosphere. Likewise, improvements to the resiliency of 
dedicated energy crops during extreme weather events will improve both 
climate and energy security by enabling their utilization as low-carbon 
bioenergy and bioproduct feedstocks to increase.
    Biotechnology is also enabling the expansion of existing bioenergy 
pathways. The U.S. is currently undergoing a rapid increase to its 
renewable diesel production capacity that will result in additional 
demand for lipid feedstocks.\155\ Work is underway to utilize fast-
growing and/or resilient undomesticated biomass such as Jatropha and 
microalgae as biofuels feedstocks. Both forms of biomass can grow on 
marginal lands while limiting the disturbance of existing carbon sinks. 
However, their utilization as bioenergy has historically been 
constrained by poor crop yields outside of the laboratory. Cell 
engineering has enabled the necessary yields for commercial production 
to be achieved in microalgae,\156\ and research is actively underway to 
improve Jatropha as a feedstock.\157\ Biotechnology is also being 
utilized to expand the supply of lipid feedstocks by enabling the 
conversion of waste products, as is described in Section 1.1.1.
    The development of the CRISPR gene editing technique over the last 
decade has already led to notable breakthroughs in the effort to 
mitigate climate change. In addition to microalgae,\158\ multiple 
strains of bacteria, yeast, and filamentous fungi have been modified 
via the CRISPR technique to increase the yields and types of products 
produced via fermentation.\159\ The CRISPR technique has also been 
employed with dedicated energy crops such as Miscanthus, poplar, 
switchgrass, and willow to refine specific traits that improve both 
resiliency and yields, although the higher complexity of these forms of 
biomass and regulatory uncertainty about their possible status as 
genetically modified organisms have slowed progress.\160\ Finally, 
CRISPR gene editing has also been employed to improve the resiliency 
and carbon efficiency of first-generation bioenergy feedstocks such as 
corn \161\ and soybeans under the types of extreme weather conditions 
that are expected to occur with growing frequency as a result of 
climate change.\162\
    Biotechnology is also being used to develop plant varieties, 
including apples and potatoes, that extend shelf life and avoid 
cosmetic issues, such as browning or spotting, that cause consumers to 
throw away food.\163\
    Biotechnology has enabled major improvements to the yields, land-
use efficiency, and resiliency of important U.S. bioenergy feedstocks 
in recent decades. Continued biotechnology advances will need to occur 
in the near future if these improvements are to be maintained, let 
alone expanded upon. Climate change is expected to result in extreme 
weather events that are greater in frequency, magnitude, and duration, 
and these will threaten production of both the feedstocks that have 
contributed heavily to U.S. bioenergy and bioproducts to date as well 
as the plant biomass that slows the rate of atmospheric GHG 
concentration increase. The development of the CRISPR gene editing 
technique, along with continued advances in more traditional genetic 
engineering processes, will do much to enhance the ability of biomass 
to mitigate fossil fuel consumption and GHG emissions.
2.4.2  Animal Biotechnology
    In addition to the on-farm applications addressed in previous 
sections, biotechnology is also being leveraged to improve the carbon 
efficiency of animal agriculture through genetic engineering of the 
animals themselves. The biotech AquaBounty salmon, for example, 
requires 25% less feed than traditional Atlantic salmon. The 
combination of lower inputs and a closed-loop, land-based production 
system that can be deployed much closer to U.S. customers is estimated 
to result in a carbon footprint that is 96% lower than traditional 
farmed salmon.\164\
    Biotech tools are also being used to improve fertility, increase 
production efficiency, and reduce disease in cattle, swine and other 
animals, further reducing waste in animal production. Scientists in the 
U.S. are employing genomic tools to improve the ability of cattle to 
tolerate higher temperatures while maintaining their growth.\165\ Heat 
stress, which is an increasing problem in the livestock sector due to 
climate change, limits the production of animal protein, and heat-
tolerant cattle will be better able to maintain their production 
efficiency as temperatures increase. The genetic sequencing of dairy 
cattle has likewise led to efforts to improve the efficiency of milk 
production via genetic engineering.\166\ Livestock are a major source 
of the potent greenhouse gas methane, causing improvements to the 
efficiency of protein and milk production to have an outsized impact on 
GHG emissions.
3  Climate Impact Analysis
3.1  Issues in LCA for Biotechnology
    Successfully mitigating the impacts of climate change will involve 
simultaneous transformational shifts across technology, policy and 
business. Effectively planning, managing and evaluating these shifts 
will require an equally profound shift in how we track and account for 
carbon. Life Cycle Analysis (LCA) is widely regarded as the most 
appropriate and effective way of evaluating the carbon impacts of 
products and processes in the complex, modern economy. LCA is an 
analytical technique in which all inputs, outputs and impacts of a 
product or process are tracked and accounted for through its full life 
cycle. This includes the materials used to make things, the energy and 
associated emissions from transporting and processing them, and what 
happens at the end of a product's useful life. LCA is especially 
important and complex when biological systems are involved, since they 
introduce a significant degree of uncertainty; external conditions, 
pathogens, or changes in surrounding ecosystems can all impact the 
productivity of any organism.
    There are three main approaches to LCA: attributional LCA, 
consequential LCA and economic input-output (EIO) LCA. Attributional 
LCA focuses on the direct actions taken by a producer in order to make 
a product; all of the energy or materials consumed during production 
would be captured by an attributional LCA, for example. Consequential 
LCA, in contrast, focuses on comparing the world with the product in 
question to a hypothetical world without it; it not only captures all 
the materials used in production, but also how the product and its 
supply chains affect markets or other products. EIO LCA uses the flow 
of money through systems to estimate environmental impacts. For 
example, an EIO-LCA may use the average carbon emissions per dollar of 
revenue in the petrochemical industry to estimate the impacts of 
petrochemical inputs to other products. The accuracy of EIO LCA suffers 
because its impact-per-dollar estimates are, by necessity, industry 
averages or abstract estimates. It is best used for high level, market-
wide estimates rather than evaluating individual products or services. 
Attributional LCA is simpler than consequential, especially for most 
manufacturing processes, but consequential LCA is widely viewed as a 
more accurate technique because it can account for indirect effects, 
such as those that occur because of changes in commodity prices or 
disrupted supply chains. Attributional LCA would overlook the impact of 
new strains of crop on agricultural markets, for example, whereas 
consequential approaches may be able to account for these.
    The science of LCA has rapidly evolved over recent decades; 
however, a number of critical challenges remain pertaining to LCA in 
biotech:
    Lack of Data on Critical Inputs or Processes--Like most modeling 
techniques, the results of an LCA are only as good as the input data. 
In many cases, critical elements needed to understand the impacts of a 
product or process are unavailable, due to insufficient fundamental 
research, protections on proprietary information, or changes in 
technology. One common example is that many biotechnological 
manufacturing systems use enzymes or catalysts. Data on the energy or 
materials used to make these inputs is typically considered proprietary 
business information, which renders many LCAs on biotech products 
uncertain, at best. In other instances, the only source of data on an 
industrial practice is extrapolated from textbooks or older research on 
the subject, often overlooking recent technological developments in the 
field.
    Inadequate tracking of existing markets or systems--Consequential 
LCA's value derives largely from its ability to assess indirect 
effects. A common example of an indirect effect is Indirect Land Use 
Change (ILUC), which occurs when a system uses an agricultural product 
as its input, such as a biofuel made from soybean oil. While the 
biofuel itself may release little carbon during its production or use, 
the gallons of soybean oil which went into the biofuel would have 
otherwise been consumed elsewhere, such as in food products, animal 
feed or cosmetics. Those previous consumers must now find alternative 
sources of vegetable oil on the open market, driving up prices, which 
may result in clearing land to grow more oilseed crops. This land 
clearance is ILUC, the acres being cleared may not be used to produce 
biofuel, but they are cleared because of biofuel. Consequential LCA 
often requires tracking markets, land use, or behavior over a long 
period of time in order to establish ``normal'' behavior in that 
system; at present these data are often not collected, or are 
proprietary.
    Multiple LCA Methods--LCA is at its heart a scientific exercise, 
but parts of it require subjective judgment, like decisions about how 
to define system boundaries or allocate impacts between multiple 
products. There may be multiple valid answers to these judgment 
questions. For example, in the U.S. almost all ethanol production takes 
in corn and produces ethanol as well as the solids left behind after 
processing, which are typically sold as a high-protein animal feed 
known as ``distiller's grains''. The question for LCA practitioners is 
how much of the energy used in the process is assigned to the ethanol 
product vs. the distiller's grains. There are several methods for doing 
this, such as assigning based on the relative mass, energy content or 
monetary value of each product, but there is no objectively right or 
wrong answer about which method should be selected; it's a judgment 
call. When true objectivity may be impossible to attain, consensus can 
be a reasonable substitute. Government, industry and academic 
stakeholders can mutually agree on answers to questions like this to 
ensure that at the very least, LCAs can be made on the basis of similar 
assumptions, so that they can be effectively compared against each 
other.
    Ultimately, the analytical tools which support LCA will need to 
evolve in parallel with the biotech industry as it rises to meet the 
challenge of climate change. Industry groups can help support the 
continued development of LCA data by supporting basic research, 
agreeing to make more data on inputs and outputs from manufacturing 
available to researchers, and continuing to support and publish LCA 
studies of their products. Luckily, LCA shares a common characteristic 
of many sciences: as knowledge accumulates, future studies become 
easier and more powerful. Groups of companies that use similar 
processes to make a common product can aggregate their data together to 
publish industry averages for energy or materials use, thereby 
protecting their proprietary business information while improving 
analysts' ability to research. LCA data developed for one study is 
often used in subsequent ones; students who study real-world examples 
emerge better prepared to contribute in real-world work; and as more 
studies are published and critiqued, consensus emerges. While 
successfully mitigating climate change will require significant new 
investments in cleaner technologies and production systems, 
complementary investments must occur in evaluation and analysis of 
these systems to ensure that the LCA tools necessary to inform the next 
decades' decisions evolve as well.

    Keys to Maximizing Biotech's Potential to Reduce GHG Emissions

   GHG accounting needs to be based on life cycle analysis, and 
        include indirect effects such as ILUC. Industry groups can help 
        by making data available to regulators and researchers; IP can 
        be protected by aggregating or anonymizing the data.

   Most biotech solutions will require massive amounts of 
        feedstock, finding ways to produce this more efficiently will 
        always be useful.

   Using waste biomass to produce energy can make a real 
        difference, but keeping organic carbon in solid form as long as 
        possible maximizes GHG benefits.

   Biofuels may not be zero-carbon, but they can be very low-
        carbon and the scale of transportation means making them 
        sustainable and scalable is critically important.

   Carbon capture and sequestration will be necessary for 
        success, but as a complement to reducing emissions, not a 
        replacement.
3.2  GHG Mitigation Potential on National (U.S.) Scale
3.2.1  Producing Sustainable Biomass Feedstock
    Biomass is one key to de-carbonizing the U.S. economy because it 
leverages the capacity of photosynthesis to remove carbon from the 
atmosphere and convert it to carbohydrates, which can be utilized for 
their embodied energy, carbon, or both. In theory, biomass can be a 
carbon-neutral resource, but in practice the situation is much more 
complex. Growing biomass, especially at commercial scales, typically 
requires fertilizer and other inputs which have associated emissions. 
Depending on how the land being used for biomass is treated, there may 
be additional sources, or sinks, of carbon in the soil. Understanding 
the emissions impacts of biomass across its full life cycle requires 
understanding the ecosystems, carbon and nutrient cycles at play where 
it's grown. Given the potential for biomass production to result in 
significant and unexpected emissions of carbon, a risk-averse approach 
is prudent, but the immense potential of biofuels, bioenergy and 
bioproducts argues in favor of utilizing these resources where 
available. While there is significant uncertainty around the emissions 
associated with any source of biomass, there are a few useful rules of 
thumb:

  1.  Biomass can be low-carbon but is almost never zero-carbon. While 
            the carbon embodied in plant matter was taken from the 
            atmosphere, and therefore has a minimal on climate change, 
            there are numerous sources of climate-forcing emissions 
            from fertilizer, irrigation, transport, processing and 
            changes in the soil.

  2.  Biobased products can reduce GHG emissions when substituted for 
            high-carbon ones, especially those relying on fossil fuels. 
            GHG reductions are realized when low-carbon biobased 
            products displace higher-carbon ones. Without that 
            displacement, there is minimal environmental benefit. 
            Substitution, by itself, is no guarantee of benefit, a few 
            biobased products are more carbon-intensive than their 
            fossil equivalents.

  3.  Alternative uses and indirect effects must be considered. 
            Accurately assessing biomass carbon emissions typically 
            requires considering indirect effects like ILUC, as well as 
            what would have happened in absence of the biomass 
            production. A cultivation system may increase soil carbon, 
            but should only be credited for these increases if this 
            increase is greater than what would have happened 
            otherwise.

  4.  The labels ``waste'' and ``residue'' can be misleading. In 
            theory, wastes or residues have no value, and cause 
            emissions from their use. In truth, many of these materials 
            are used in some fashion, sometimes by sustainable bio-
            product systems, sometimes more traditionally, as animal 
            bedding or returned to the soil; these uses must be 
            considered.

    Climate policy has largely overlooked emissions from agriculture to 
date, in part because of the complexity of the system and concern about 
financial impacts on farmers and rural communities. With new focus on 
sustainable and regenerative agriculture, however, a window of 
opportunity is opening to achieve a win-win scenario for agricultural 
producers: utilize the latest science to find opportunities to use 
agriculture as a tool to reduce emissions, and reward farmers for the 
carbon benefits they provide.
    Agriculture in the U.S. emitted GHGs equivalent to about 658.6 
million metric tons of carbon dioxide in 2018, roughly 10% of the U.S. 
total.\170\ * About 94% of this was emitted from agricultural soils or 
livestock (direct or ``enteric'' emissions from animals as well as 
manure management). Additional emissions come from the production of 
ammonia, which is a primary input for most fertilizers. With continued 
population growth as well as the emergence of the bioeconomy, the 
agricultural sector will be called upon to produce even more food, 
fodder, fiber and feedstock. Meeting this challenge while reducing 
emissions will require the rapid deployment of advanced biotechnology 
in several critical areas including:
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    * Editor's note: there are no corresponding footnote references, or 
footnotes for nos. 167-169. The report has been reproduced herein as 
submitted.

    Optimizing fertilizer use through new crop strains or increased 
---------------------------------------------------------------------------
nitrogen fixation.

    Nitrogen is often a limiting factor in agricultural yields. The 
``Green Revolution,'' which massively increased agricultural production 
and allowed rapid population growth during the 20th Century, was 
largely facilitated by the development of the Haber Process for 
producing ammonia from natural gas. Ammonia production supports 50-75% 
of global fertilizer production and is responsible for more than 1% of 
global GHG emissions.\171\ Removing biomass from fields, whether it's 
crops for consumption or residues for bioenergy, takes some of that 
nitrogen along with it, which must be replaced. Biotech can improve 
plants' efficiency at utilizing nitrogen, or adding genes from 
nitrogen-fixing organisms to allow them to produce their own. Using 
modern biotechnological tools to optimize the use of synthetic 
fertilizers allows growers to consume less of them, which could help 
U.S. farmers cut back on 15-20 million metric tons of carbon associated 
with its production, about as much as fueling 3-4 million cars for a 
year.\172\

    Reducing nitrous oxide emissions from soil

    Nitrogen fertilizers enhance plant growth, but many soil microbes 
convert fertilizer nitrogen to nitrous oxide (N2O), a 
greenhouse gas up to 298 times more potent than carbon dioxide. In 
2017, nitrous oxide emissions from agricultural soil accounted for 266 
million metric tons of carbon dioxide equivalent in the U.S. Relatively 
low-tech interventions, such as using less volatile fertilizers and 
applying them more efficiently could reduce nitrous oxide emissions by 
30-100 million metric tons annually.\173\ Analyses of chemical 
inhibitors indicate a potential to cut nitrous oxide emissions by over 
40%, and there are promising lines of research which would integrate 
production of these inhibitors into a plant's root system.\174\ By 
combining all of these approaches, nitrous oxide emissions could be 
reduced, by well over 150 million metric tons of carbon equivalent, or 
as much as shutting down 32 U.S. coal power plants for a year.

    Enhancing soil carbon retention through expanded root growth

    Despite its mundane appearance, soil is a complex and dynamic 
environment, in which carbon and nutrients enter and leave through 
multiple avenues and cycle through plants, animals, microbes and fungi. 
There are several promising approaches by which the soil carbon system 
could be encouraged to retain more carbon in solid form, rather than 
being decomposed and released to the atmosphere. Root growth is a major 
pathway for soil carbon accumulation, as plants take carbon from the 
atmosphere and convert it to solid plant matter, moving it underground 
as roots grow. Engineering crops to have larger and deeper root systems 
expands this pathway and could sequester carbon by 200 to 600 million 
metric tons per year if widely deployed, though this number is highly 
uncertain due to the relative immaturity of this technology.\175\

    Reducing methane emissions from livestock

    As population and incomes increase globally, so does the 
consumption of meat and dairy products. This leads to an increase in 
livestock numbers and the associated emissions. Livestock, especially 
cattle, are a major source of methane, from enteric sources (i.e., 
burps) as well as from decomposing manure. Several novel feed additives 
have been proposed which may be able to reduce the amount of methane 
emitted without negatively affecting animal health or reducing yields. 
DSM has announced a cattle feed supplement that claims to reduce 
methane emissions by 30%,\176\ while other compounds under 
investigation--often derived from red seaweed--may be able to provide 
80% reductions or greater in methane emissions.177-178 While 
numerous technological and policy hurdles remain, widespread deployment 
of feed technologies like these could reduce emissions from livestock 
production by 50-140 million metric tons, or roughly one to three times 
the annual emissions from the state of Oregon.
3.2.2 Empowering Sustainable Production
    Empowering Sustainable Production

    Modern economies produce a staggering amount of things. From 
millions of printed silicon microcircuits in electronics to billions of 
tons of concrete and steel, production of physical objects is a 
hallmark of human society. As we seek to limit the damage caused by 
climate change, a new focus on sustainability must enter the 
conversation about how we make things. Luckily, advances in technology 
have presented a number of opportunities to do just this, by developing 
more efficient and lower-emission alternatives to traditional 
industrial techniques. Biotechnology can continue this process by 
leveraging the affinity biological processes have for working within a 
circular economy.

    Green is the New Black
Elements of a circular economy. 


          Source: PBL Netherlands.\179\

    Traditionally, once materials were extracted, their life was a one-
way trip that ended in a landfill. As industries become more aware of 
the need to reduce emissions, it is becoming clear that reuse and 
recycling of materials and energy is an essential tool for 
sustainability. Biotechnology is well-positioned to succeed in a 
sustainable circular economy because it is built on a foundation of 
biological carbon cycling. Working with natural systems which have 
evolved to capture and re-use carbon and nutrients, biotechnology firms 
can expand these processes to commercial scale, replacing energy- and 
emission-intensive extractive industries with low-impact circular ones.

    Turning Carbon into Products

    U.S. industry emits over 800 million metric tons of carbon per year 
from the combustion of fossil fuels; at present almost all of this goes 
into the atmosphere, representing over \1/8\ of national emissions. 
Numerous projects have already sought to demonstrate the feasibility of 
capturing this carbon and sequestering it underground, or using it for 
enhanced oil production, but a number of innovative processes are 
emerging to use the carbon as a raw material for other products, 
including polymers, carbon fiber, chemicals, nanomaterials or fuels 
using a variety of methods. Conventional carbon capture systems can 
typically pull 80-90% of the carbon dioxide out of exhaust from 
combustion systems,\180\ which means that there is a potential resource 
of hundreds of millions of tons of carbon dioxide which could 
potentially be used to make new products. The limiting factor will 
probably be the availability of processes to utilize the carbon and 
markets for the resulting products.
    Bioplastics have been one of the first large-scale applications of 
biotechnology for the purpose of improving industrial sustainability. 
Dozens of alternative biobased polymers have entered the market, 
demonstrating the capacity to replace fossil carbon in a variety of 
applications and, in many cases, offering more sustainable recycling or 
reuse options than traditional equivalents. Around 1% of U.S. GHG 
emissions come from producing plastics. Switching from fossil-based 
plastics to corn-based biopolymers could reduce emissions by 0.6kg-
1.4kg of CO2 per kilogram of plastic.\181\ * Widely applied, 
this could reduce emissions from plastic production by about 25%, 
totaling 16 million metric tons of CO2 per year. Switching 
from corn to cellulosic feedstocks, like switchgrass, Miscanthus, or 
corn stover could double the emission benefits.\183\
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    * Editor's note: there is no corresponding footnote reference for 
footnote 182. The reference as been incorporated herein as follows:

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    Organic Waste Utilization

    Researchers and policy makers are becoming increasingly aware of 
the need to more efficiently use materials in industry. This is 
particularly true of organic waste, like food scraps, agricultural 
residue and un-recyclable wood products, because they not only require 
fertilizer and other inputs to make those materials, but as they 
decompose, also emit carbon dioxide or, worse, methane. Anaerobic 
digestion (AD) is a well-understood technology for converting organic 
waste into energy, while recovering nutrients that can be returned to 
the soil. When decomposition happens in the absence of oxygen, microbes 
convert organic waste into biogas--a mixture of methane, carbon 
dioxide, water vapor and other trace components. This can be cleaned up 
to yield Renewable Natural Gas (RNG), which is mostly methane and 
functionally equivalent to fossil natural gas. AD produces not only 
this valuable product, but also solid digestate, which is very similar 
to compost and can be used as a beneficial soil amendment. By capturing 
the methane which would otherwise have been released into the 
atmosphere, AD further reduces the GHG footprint of organic waste 
disposal; in some cases the effect of preventing uncontrolled releases 
of methane can be so great that the resulting RNG is effectively 
carbon-negative, when evaluated by LCA.\180\ Widespread deployment of 
RNG systems at landfills, wastewater treatment plants, livestock yards 
and other organic waste hotspots could displace enough fossil natural 
gas to offset 40-75 million metric tons of carbon dioxide emissions. 
Using agricultural residue or wood waste could add another 12-40 
million metric tons, though these resources may have other competing 
uses in a low-carbon economy.\184\

    Cleaner Buildings

    There are opportunities to build sustainable, circular material 
cycles into more than just consumer products. Carbon can be pulled out 
of the atmosphere and used to make the very buildings, roads, and 
cities we live in. Wood, long thought of as a traditional building 
material, is enjoying new attention as a low-carbon solution for future 
construction. Since wood pulls carbon from the air as it grows, it 
represents a very stable and durable removal mechanism for atmospheric 
carbon, which will remain sequestered as long as the wood remains 
solid. Engineered wood products, including cross-laminated timber, 
fiber or polymer reinforced products, or wood composites can provide 
strength and durability previously thought possible only from metal. A 
recent study of engineered wood products found that they can reduce GHG 
emissions by 20% when substituted for fabricated metal, 25% for 
concrete and 50% for iron or steel. Engineered wood has been used to 
build several multistory demonstration buildings to show that high-rise 
construction is possible without conventional materials. A five-story 
wood building stores about 26 lb of carbon per square foot.\185\ With 
over 350 million square feet of multifamily housing constructed in the 
U.S. in 2019, the potential carbon savings could be substantial.\186\
    Another opportunity to find uses for carbon dioxide is in cement, 
which is currently one of the largest sources of greenhouse gas 
emissions in the world and was responsible for over 40 million tons of 
emissions in the U.S.\187\ Researchers have been investigating 
alternative formulations of cement, which utilize carbon dioxide during 
production or absorb it from the air as it cures. By integrating these 
techniques with renewable energy to power the process, it is possible 
to end up with carbon-neutral concrete turning some infrastructure 
projects into net carbon sinks.
3.2.3  Developing Lower-Carbon Products
    If humanity is to successfully avoid the worst impacts of climate 
change, it will have to find lower-carbon substitutes for many of its 
most important products. No product exemplifies this challenge better 
than transportation fuel. The ready availability of reliable, high-
speed transportation is a foundational element of life in the U.S.; it 
is the lifeblood of modern supply chains and personal lifestyle. The 
U.S. is by far the biggest consumer of oil in the world, consuming 
almost 20 million barrels of crude oil per day, and processing it 
through more than 130 refineries into a wide range of fuels and 
petrochemical products, most importantly gasoline and diesel.\188\ The 
emissions from vehicle tailpipes, plus the production and refining of 
petroleum total over 1,900 million metric tons of carbon dioxide 
equivalent each year, almost 30% of the U.S. total or about as much as 
Germany and Japan, combined.\189\
    Neither the U.S. nor any other nation can halt climate change while 
depending on petroleum to fuel its transportation system. There is no 
single solution to this problem, a full portfolio of tools is needed. 
Light-duty vehicles, like cars, trucks, and SUVs consume the majority 
of petroleum in the U.S.; there is consensus within the transportation 
research community that replacing these with battery electric vehicles, 
charged on a grid dominated by renewables or other carbon-free sources, 
will by the primary way of reducing these emissions, with mass transit 
and other measures also playing a role. Many of the medium and heavy 
duty vehicles, like box trucks, delivery vans and some tractor-trailers 
will also be powered by electricity from batteries, or possibly 
hydrogen fuel cells.\190\ There are some types of transportation, 
however, for which energy-dense liquid fuels will be much harder to 
replace. Aviation is the biggest of these; the U.S. consumed over 18 
billion gallons of jet fuel in 2019,\191\ and while the industry will 
take some time to recover from the ravages of COVID-19, commercial air 
travel will continue to factor in global transportation. Some marine 
applications, long-haul trucking, military operations, backup and 
emergency power, and specialized vehicles may also need liquid fuels. 
The U.S. currently consumes around 15 billion gallons of ethanol per 
year, and around 2.5 billion gallons of biomass-based diesel 
substitutes including biodiesel and renewable diesel. The vast majority 
of ethanol is made from corn, while around [] of U.S. biomass-based 
diesel is made from soybean or canola oil, with the rest coming from 
waste oil or byproducts.\192\
    Most of the biofuels currently used in the U.S. reduce carbon 
emissions when they displace petroleum fuels. Typical corn ethanol 
emits about 30% less carbon than gasoline, when the full life cycle of 
both products are considered, and typical biodiesel or renewable diesel 
from soybean oil reduces carbon by 40-50% over the full life 
cycle.\193\ With domestic consumption of these fuels measured in the 
billions of gallons each year, these emission reductions represent 
millions of tons of avoided carbon. The use of biofuels is estimated to 
have reduced U.S. transportation sector GHG emissions by 980 MMT 
CO2 from 2009-2020.\194\ This is equivalent to taking 
roughly 16 million vehicles off the road, or 19 coal-fired power plants 
offline, forthat 13 year period.\195\
    First-generation biofuels alone cannot meet the challenge of near-
complete de-carbonization by mid-century, but have achieved critical 
near-term reductions as other low-carbon transportation solutions are 
being developed; and they form an important technological foundation 
for the next generation of low-carbon fuels. The biotech industry can 
leverage its capacity to innovate to help advance biofuels in two main 
ways, reducing emissions from current production and developing zero, 
or near-zero carbon fuels.

    Reducing Emissions From Existing Fuels

    The U.S. fuel ethanol industry operates around 200 production 
facilities spread across the U.S., representing tens of billions of 
dollars in capital investment and thousands of jobs.\196\ While corn-
based ethanol may struggle to achieve the very low-carbon levels needed 
in the long-term future, it has a critical role to play over the next 
few decades. As long as there is petroleum-based gasoline being 
consumed in the world, there will be value in producing a substitute 
that is 30% less carbon intensive; and the evidence suggests that the 
industry can reduce emissions even further. Driven in large part by the 
adoption of carbon intensity standards like California's LCFS, the 
ethanol industry has improved the efficiency of its facilities and 
found new ways to recover valuable co-products. Doubling down on these 
processes can continue to reduce emissions.
    Improved efficiency of ethanol production facilities has reduced 
the energy inputs needed per gallon of output by a few percent per 
year,\197\ and the industry has begun to utilize cellulosic processing 
technology to convert the previously indigestible corn kernel fiber 
into ethanol, increasing the yield from each bushel of corn by 3-4%. 
Improved crop yields and strains optimized for fuel production also 
help reduce the emissions associated with each unit of fuel. 
Incremental improvements like these seldom grab headlines, but on the 
scale of U.S. ethanol production, they add up. Each 1% improvement in 
average carbon intensity, across the entire U.S. ethanol industry 
results in around 800,000 metric tons of avoided carbon dioxide 
emissions each year.\198\ Similarly, there are opportunities to improve 
the efficiency of biodiesel and renewable diesel production, the latter 
of which anticipates almost a six-fold increase in U.S. production 
capacity over the next 5 years.\199\ More efficient catalysts and 
purification systems can reduce the need for energy or reagent inputs, 
driving GHG emissions down even further. If the U.S. renewable diesel 
industry grows as anticipated, each 1% improvement in efficiency yields 
around 170,000 metric tons of avoided emissions each year.\200\
Figure 2: Each 100 million gallons of advanced, low-carbon biofuel has 
        the potential to displace as much as 1 million tonnes of 
        carbon, if it displaces petroleum fuels, or over 200,000 tonnes 
        if it displaces current-generation biofuels.
Potential Emissions Reductions From 100 Million Gal. of Advanced 
        Biofuel 
        
        
          Source: California Air Resources Board.

    Developing Zero or Near-Zero Carbon Fuels

    Decarbonizing transportation will require a new generation of 
fuels. Cellulosic biofuels, which use inedible plant matter as their 
feedstock, offer the potential for much deeper reductions in carbon 
emissions.\201\ Cellulosic biofuels have been on the horizon for many 
years, but technological and supply chain challenges sank several early 
projects. A new wave of cellulosic production facilities, promising 60-
80% lower emissions than conventional fuels are under development and 
if early projects are successful, could be the start of a new, multi-
billion gallon per year industry. One key difference between the first 
wave of cellulosic production facilities and this one is that rather 
than breaking down cellulose into sugars and fermenting them into 
ethanol like you would with starch, these facilities use heat to 
convert biomass into a gas, or light oils, then process those into 
finished fuels. There are numerous opportunities to further refine the 
process, however, by making more selective and durable catalysts, or 
providing feedstock which improves yields, is more easily handled or 
requires less pre-treatment.
    Algae or other microbes may offer the greatest potential to deliver 
fuels that approach or achieve carbon neutrality. Algae can be grown 
using wastewater or even exhaust gas as their primary source of 
nutrients and can be tailored to produce highly desirable oils or 
carbohydrates at extremely high theoretical yields. Attempts to scale 
these systems up have run into problems with pathogens, competition 
from wild microbes and finding efficient methods to separate desired 
products from water and cell mass. If algal fuels, or other advanced 
synthetic fuels could be commercialized, they offer the potential for 
billions of gallons of a product that is compatible with existing 
vehicles and infrastructure. Figure 2, shows the potential emissions 
reductions from 100 million gallons of a hypothetical advanced fuel, at 
various carbon intensities.\202\ Depending on what it displaces, the 
emissions benefits could be a few hundred thousand to over 1 million 
metric tons each year[.]
3.2.4 Enhancing Carbon Sequestration
    Enhancing Carbon Sequestration

    Drastically reducing carbon emissions is necessary if humanity is 
to avoid the worst effects of climate change, but more will be needed. 
Almost every model of a successful stabilization of temperatures 
includes a large amount of carbon dioxide removal from the atmosphere, 
through enhanced plant growth and CCS. Figure 3 shows results from the 
IPCC 5th assessment report regarding global carbon emissions 
trajectories that preserve a hospitable climate. Each line represents 
one simulation of the future in which average temperature increase is 
kept below 1.5 C (the graph for a 2 C outcome looks quite similar). 
In every case, net emissions must not only be reduced to zero, but the 
world will need to rapidly remove carbon from the atmosphere over the 
second half of this century.\203\ Biotech can provide crucial tools to 
help this effort.
    It is difficult to estimate how much of an impact carbon capture 
might have on the climate system of the future; in some ways the sky is 
really the limit since there is certainly no shortage of carbon dioxide 
in the atmosphere to remove. Accelerated R&D and rapid deployment of 
demonstration projects will be necessary to identify and prove the 
capabilities of the many technological options which could contribute.
Figure 3


          Source: IPCC 5th Assessment Report.

    Bioenergy with Carbon Capture and Sequestration (BECCS)

    Many of the most promising concepts for scalable carbon 
sequestration rely on photosynthesis to do the actual capturing of 
carbon dioxide, which can then be used or stored. One of the most 
promising is BECCS, which uses the biomass from plants to produce fuels 
or energy, storing carbon along the way. There are many proposed models 
for BECCS, from burning biomass in conventional power plants and 
capturing carbon from the exhaust, to gasification systems which leave 
behind carbon-dense biochar that can be used as a carbon-sequestering 
soil amendment. The energy or fuels produced by these systems would 
also help displace fossil fuels, providing a double climate benefit. A 
recent analysis estimated that, by 2040, BECCS could cost effectively 
remove over 700 million metric tons of carbon per year,\204\ or more 
than half the emissions from all U.S. coal power plants, though doing 
so would require a massive amount of sustainable biomass feedstock to 
be produced.

    Sequestration in Natural and Working Lands

    Natural ecosystems have been sequestering carbon for millennia 
without human assistance and should not be overlooked as a method of 
removing carbon from the atmosphere. The main mechanism of 
sequestration is through the growth of roots in the soil, accumulation 
of fallen organic matter, or the accumulation of organic matter at the 
bottom of oxygen-poor bodies of water. Most biomass decomposes or is 
consumed by animals but some, especially the hard-to-digest fibrous 
parts of plants composed of lignin and cellulose, remains in solid form 
for decades or more and is integrated into soil. Human encroachment on 
natural lands and climate change are affecting most natural ecosystems, 
often disrupting this process; but careful intervention, through things 
like managed replanting, selective breeding for sequestration 
potential, soil amendments such as compost or biochar, selective 
harvest and prescribed fire can increase the rate of carbon 
sequestration and build healthy, resilient ecosystems. The National 
Academies concluded that enhanced management of forests could sequester 
anywhere from a few hundred pounds to over a ton of carbon per hectare 
annually; \205\ widely deployed this could result in sequestration of 
100 million metric tons of carbon per year, with an additional 150 
million metric tons possible through expanding forested areas, this 
would be like taking 20 to 50 million cars off the road.

    Enhanced Weathering

    While the majority of carbon removal from the atmosphere is done by 
plants, it is not the only mechanism. Certain types of mineral like 
olivine, serpentine and basalt will react with carbon dioxide to form 
stable carbonate minerals in a process known as ``weathering''. This 
mechanism has been largely responsible for mitigation of high 
atmospheric CO2 concentrations in prehistoric times. 
Unfortunately, it is naturally quite slow, suited for geological rather 
than human time scales; but there are ways that it might be accelerated 
and scaled to help address the climate crisis. Olivine and serpentine 
are often found in discarded mine tailings or asbestos formations; 
basalt can often be found in geologically active areas, where 
geothermal power plants may be active. By managing air flow, moisture 
and pH levels in these sites, the rate of carbon uptake could be 
substantially increased. Adding catalysts, or microbial agents could 
increase the potential even further.

    Direct Air Capture

    Most carbon capture systems rely on natural processes to remove 
carbon from the atmosphere, but new innovative approaches may offer the 
opportunity to cut out the intermediate step. Several processes are 
being tested that use chemical solvents, such as amine or carbonate 
solutions, to absorb CO2 from the atmosphere, and release it 
into a containment system, resulting in pure CO2 that can 
then be sequestered underground or used to make products. Since 
CO2 is only a few hundred parts per million in the 
atmosphere, this process requires a lot of surface area and usually 
uses heat to regenerate the solvent solution. This can make these 
systems bulky and energy-intensive. By developing more effective and 
durable solvents, or lower-energy regeneration processes, these systems 
could be made cheaper and more scalable. The upper limit of potential 
for these systems depends on how optimistic one is about the rate at 
which they will improve their energy and cost efficiency. Studies have 
projected the impact of direct air capture at anywhere from a few 
hundred million tons to more than half of today's global CO2 
emissions.\206\
4  Barriers to Adoption and Policy Proposals
4.1  Financing Barriers
    Biofuels and bioproducts have historically faced a major 
commercialization hurdle in the form of access to financing. 
Biotechnology products that are intended to reduce GHG emissions must 
necessarily compete with fossil fuels that supply a well-established 
refining and petrochemicals production infrastructure. Whereas this 
fossil infrastructure is often decades old and has often been fully 
paid off by its owners, biotechnology products require investment in 
either new infrastructure or large-scale retrofits of existing 
infrastructure. These investments can be very expensive, with one 
review of announced commercial-scale cellulosic biofuel projects 
finding capital costs to be approximately $11/gallon of installed 
production capacity.\207\ With the exception of large, established 
companies, few new producers have ready access to this amount of 
capital, necessitating that they access the capital markets through 
lenders and/or investors.
    Private sources of capital generally require a demonstration that a 
biotechnology project can achieve certain levels of profitability in 
the form of a ``hurdle rate'' before providing access to financing. 
Biobased fuels and products compete with fossil fuels and products for 
market share, and the market value of the former operates as a function 
of the latter as a result. On occasion this has been advantageous for 
biotechnology products, such as when fossil fuel prices rose sharply in 
2007-08. The steady decline of fossil fuel prices that has occurred 
over the last decade in response to increased unconventional production 
of natural gas and petroleum in the U.S. has made it more difficult for 
biotechnology products to obtain the necessary hurdle rates for 
financing, however, even as climate change has become an important 
concern for American consumers.\208\ Likewise, the immediate financial 
incentive to make investments in energy efficiency and other marginal 
reductions to GHG emissions is limited when energy costs are low.
    A challenge faced by biofuels and bioproducts is that many of the 
advantages that they offer over fossil fuels are not reflected in their 
market value. For example, in addition to the GHG emissions reductions 
discussed above, many biotechnology products achieve low levels of 
other types of pollution such as particulate matter emissions, sulfur 
emissions, water contamination, and toxic waste production compared to 
fossil fuels. These reduced impacts on human health and the environment 
have a clear monetary benefit in the form of reduced spending on 
medical services, environmental remediation, recovery from extreme 
weather events, etc.\209\ Moreover, biotechnology provides the ability 
to reduce GHG emissions and other forms of pollution across a variety 
of economic sectors, including agriculture, manufacturing, and 
transportation. Such benefits are not reflected in the market value of 
the biotechnology products, however, placing them at a competitive 
price disadvantage to fossil fuels.
    Governments have sometimes enacted policies that cause the benefits 
of biofuels and bioproducts to be reflected on the marketplace, either 
by subsidizing those biotechnology products that have reduced impacts 
on human health and the environment or by increasing the cost of fossil 
fuels (see Section 4.3). Some, such as California's LCFS, have prompted 
rapid growth in the use of biofuels by subsidizing biofuels, especially 
those from second-generation feedstocks, based on the degree to which 
they reduce transportation GHG emissions.\210\ The LCFS recently 
expanded to provide support for CCS; when combined with Federal 45Q tax 
credits, this can offer over $150/tonne of total incentive for project 
developers.211-212 Government incentives in the U.S. have 
not always been sufficient to make biotechnology products competitive 
with inexpensive fossil fuels, though: one recent analysis calculated 
that new cellulosic biorefineries would struggle to be financially 
viable despite the presence of supporting Federal policies because of 
the low fossil fuel prices that have prevailed since 2014.\213\ 
Producers of biotechnology non-fuel products, for which government 
support mechanisms are fewer, have also faced high hurdles to private 
financing.
    Some producers of U.S. biofuels and bioproducts have been able to 
obtain public financing in the form of loans, loan guarantees, and 
grants from the Federal and state governments. The U.S. Department of 
Agriculture offers loan guarantees of up to $250 million for the 
building of capacity for the production of specific biotechnology 
products including advanced biofuels and biobased chemicals.\214\ The 
loan guarantee program was started in 2008 to enable financing of 
advanced biofuels and was expanded in 2014 to cover other bioproducts 
as well. The loan guarantee reduces the barriers to obtaining private 
financing by having the U.S. Government backstop qualifying loans to 
producers. While this backstop does not guarantee private financing for 
the facility, it substantially reduces the producer's financing hurdle 
rate by reducing the risk of default on any loan covered by the 
guarantee. Several states operate their own direct loan and loan 
guarantee programs for biorefineries, albeit on a smaller scale.\215\
    Grants are another public finance mechanism that has supported the 
commercialization of biotechnology. Unlike direct loans and loan 
guarantees, grants are one-time awards of financing that are not 
repaid. The awards generally involve smaller amounts of financing than 
are provided via direct loans and loan guarantees, and they have often 
been used to support R&D or make improvements to existing facilities 
rather than to build a new commercial-scale facility. One example is 
the Value-Added Producer Grants program administered by the U.S. 
Department of Agriculture, which ``helps agricultural producers enter 
into value-added activities related to the processing and marketing of 
new products.'' \216\ Other grants indirectly support the establishment 
and commercialization of biofuels by being directed toward the 
upgrading of infrastructure that is downstream of production facilities 
and improving consumer access.
    The private and public capital that has been invested into biobased 
fuels and products has spurred the commercialization of low-carbon 
technologies since the turn of the century. Investments have fallen far 
short of what is necessary to avert catastrophic climate change, 
however, reflecting the major hurdles to financing that still exist 
within the biotechnology industry. The IPCC estimates that $2.4 
trillion in annual investment is needed globally in the energy sector 
alone until 2035 to limit temperatures to no more than 1.5 C above 
pre-industrial levels.\217\ This number is larger still if the de-
carbonization of non-energy sectors such as agriculture and materials 
are accounted for. Actual global low-carbon energy investment in 2019 
was only $0.6 trillion, or 25% of what is needed.\218\ Additional 
policy mechanisms will be required to rapidly reduce existing hurdles 
to the financing of biobased projects. Governments will also need to 
reduce the regulatory barriers that these projects face, as unfavorable 
regulatory environments increase the financial risks that they bear and 
their hurdles to financing.
4.2  Regulatory Barriers
    The biotechnology industry plays an important role in developing 
and commercializing novel products that are not always directly 
compatible with the existing infrastructure in the sectors into which 
they are introduced. Moreover, many of these products are manufactured 
using technologies such as gene editing that are closely regulated by 
national governments. These factors have resulted in the formation of 
multiple regulatory barriers that hinder the adoption of low-carbon 
biofuels and bioproducts and constrain the biotechnology industry's 
ability to reduce emissions of GHGs and other pollutants.

    Biotechnology Regulation

    GMOs have had a long and contentious regulatory history in the U.S. 
Since 1986, biotech products in the U.S. have been regulated under the 
Coordinated Framework for the Regulation of Biotechnology (Coordinated 
Framework).\219\ The framework has been updated several times since its 
introduction, including a comprehensive revision in May 2020, known as 
the Sustainable, Ecological, Consistent, Uniform, Responsible, 
Efficient (SECURE) rule, or Part 340 rule, which significantly 
streamlined and modernized the regulatory framework.\220\ While U.S. 
regulators and consumers are relatively accepting of GMO products, 
societal opposition to the use of GMOs in the agriculture sector in 
particular has, on occasion, prompted a cautious response to new GMO 
products by regulators that has slowed the introduction of biotech 
products to the market.
    Regulations in other regions, such as Europe, are more 
hostile,\221\ hampering the ability of the U.S. biotechnology market's 
products to make an outsized contribution to global GHG emission 
reductions. For example, as discussed in Section 1.4, GMO food crops 
have enhanced resiliency under the types of extreme weather conditions 
that are becoming more common as the climate changes, thereby reducing 
the amount of land required by agriculture and reducing the incentive 
to increase GHG emissions via land-use change.
    Studies have found that Americans, including those residing in 
states with large agricultural sectors, have concerns about the 
production of bioenergy from GMO feedstocks as well.\222\ Some second-
generation bioenergy feedstocks have attracted opposition due to their 
use of fast-growing and potentially invasive forms of biomass. These 
feedstocks, especially those that have been genetically engineered to 
expand rapidly, have prompted concerns that they could expand into and 
damage the surrounding ecosystem.\223\ Notably, though, biotechnology 
has also provided a means of potentially overcoming this barrier. In 
one recent research breakthrough, microalgae grown as a biofuels 
feedstock has been genetically engineered to be unable to survive 
outside of the production facility, thereby preventing its uncontrolled 
growth.\224\
    Genetically engineering microorganisms used in the production of 
fuels, chemicals and other products are also subject to Federal 
regulation, but their place in the Coordinated Framework has long been 
unclear, and GE microbes were not clearly addressed in the SECURE rule. 
This regulatory uncertainty is likely to present a significant barrier 
to the development and commercialization of biotech climate innovation.

    Regulation of Fuels and Products

    A second major regulatory barrier is posed by conflicting state 
policies on certain biotechnology products. While the U.S. has a 
comparatively more integrated common market than the European Union, 
individual state governments sometimes have policies in place that 
discourage the introduction of biotechnology products into entire 
regions, let alone individual markets. This situation can prevent the 
adoption of products that have interstate supply chains. One example 
that is already occurring involves the transport of renewable diesel 
through existing refined fuels pipelines. Renewable diesel is a drop-in 
biofuel that can utilize cost-effective distribution infrastructure 
such as the refined fuels pipelines that connect refineries to multiple 
states' markets (e.g., the Colonial Pipeline in the Southeastern U.S.). 
Many states require that the biofuels content of fuels retailed within 
their borders be stated on a fuel pump label, but this is not easily 
known if the renewable diesel is being pipelined in a blended form with 
diesel fuel. The result is that having even a single state on an 
interstate pipeline with strict pump labeling requirements can 
discourage the movement of a drop-in biofuel such as renewable diesel 
through it. The biofuel must instead be transported by rail, ship, or 
truck, all of which are more expensive and polluting options than 
pipeline.\225\
    Biotechnology products that are not compatible with unmodified 
existing infrastructure often face a heightened regulatory barrier. 
U.S. ethanol consumption has historically been constrained by the so-
called ``ethanol blend wall'', which refers to the maximum blend that 
can be used in existing infrastructure. Ethanol is a hydrophilic fuel 
that is miscible with water, and this trait prevents its movement 
through pipelines at any blend rate and use in unmodified engines above 
specific blend rates due to the potential for water contamination. 
Ethanol blends for use in unmodified engines were limited to 10% by 
volume (E10) until 2011, when the U.S. Government began to allow blends 
of up to 15% by volume (E15) during certain seasons of the year.\226\ 
The unrestricted sale of E15 was not permitted until 2019.\227\ The 
blend limits apply to ethanol whether produced from corn or 
lignocellulosic biomass, and the blend wall sharply constrained fuel 
ethanol demand from all feedstocks beginning in 2013 as a result.\228\
    The U.S. Government has also used regulatory changes to restrain 
demand for all biofuels since 2017. National biofuels demand over the 
last decade has been driven by the revised Renewable Fuel Standard 
(RFS2), which mandates the annual consumption of specific volumes of 
different types of biofuels. Petroleum refiners are tasked with 
ensuring that sufficient quantities of biofuels are blended with 
refined fuels to comply with the mandate, and a refiner's individual 
blending quota is determined by its market share. Between 2017 and 2019 
the Federal Government greatly increased the number of hardship waivers 
that it awarded to refiners, reducing their blending quotas and overall 
demand for biofuels under the mandate.\229\ One analysis calculates 
that the increased number of hardship waivers awarded caused demand for 
advanced biofuels under the mandate to be up to 1 billion gallons lower 
per year, and that the amount of the annual reduction has equaled as 
much as 50% of U.S. production.\230\
    Regulatory barriers can be particularly high for truly novel 
biotechnology products due to a lack of suitable regulatory frameworks. 
Cultured meat, for example, has been identified as one product for 
which existing U.S. regulations are inadequate due to the existence of 
myriad production techniques and the potential for genetic modification 
as part of the production process.\231\ Regulatory uncertainty is as 
much of a barrier as adverse regulation is, inasmuch as both discourage 
financiers from providing the capital necessary for commercialization. 
The lack of an adequate regulatory framework also raises the 
possibility that adverse regulation could result from a regulatory 
rulemaking process.
    The future growth of the U.S. biotechnology industry will be 
heavily affected by existing and potential regulatory barriers. One 
recent analysis estimated that 50% of the total economic impact of 
biotechnology over the next decade ``could hinge on consumer, societal, 
and regulatory acceptance'' of the industry's products.\232\ The 
analysis further calculated that this amount increases to 70% over the 
next 2 decades. This has important implications for the ability of 
biotechnology to provide climate solutions given that early emissions 
reductions are more valuable than later reductions. The continued 
presence of regulatory hurdles is an especially pressing issue given 
the major shortfall of de-carbonization investments (see Section 4.1).
4.3  Policy Proposals
    The growing recognition by many U.S. policymakers that existing 
efforts to de-carbonize the country's economy are falling short of its 
commitments under the 2015 Paris Climate Agreement has led to the 
unveiling of a variety of climate policy proposals at the Federal, 
state, and local levels of government. These proposals fall into two 
broad categories: the first category focuses on the de-carbonization of 
individual sectors while the second category instead takes an economy-
wide approach. The sector-based proposals are similar to policies 
already in place in states such as California, whereas the economy-wide 
proposals are more novel and less well established. An aggressive 
combination of sector-based and economy-wide policies is needed to 
rapidly realize the full potential of biotechnology to combat climate 
change.
4.3.1  De-carbonizing Transportation
    The first 2 decades of the 21st century saw the introduction of 
several policies to reduce the carbon intensity and GHG emissions of 
the transportation sector. Some, such as Federal RFS2 and California 
LCFS, were successfully implemented and have resulted in the partial 
de-carbonization of the on-road transportation sectors in their 
respective jurisdictions through the increased use of biofuels. But 
regulatory implementation of these policies has, particularly in the 
case of RFS2, limited their impact. Barriers to the full implementation 
of existing Federal renewable fuels policies should be removed and 
aggressive follow-on transportation sector climate policies adopted to 
achieve the maximum near-term and longer-term GHG reductions.

    Renewable Fuel Standard

    The continued presence of the RFS2 as the centerpiece of U.S. 
transportation sector de-carbonization efforts has had an important 
impact on the development of intermediate-term GHG emission reduction 
strategies, with cumulative reductions of 980 MMT CO2 since 
RFS2 was enacted.\233\ But a series of EPA regulatory actions has 
substantially limited the program's climate gains. The agency has 
repeatedly reduced RFS volume obligations and has issued a growing 
number of small refinery waivers, further reducing the market for 
biofuels in the U.S.\234\
    EPA has taken some steps to expand U.S. biofuels markets. The 
ongoing effort to expand the volume of ethanol permitted by the ethanol 
blend wall is one example of this trend (see Section 3.2). Following on 
earlier efforts to ease restrictions on E15 consumption, in 2020 the 
Trump Administration announced that the Federal Government would not 
block the use of E15 in fuel pumps that were compatible with E10 
(although state governments are still able to do so).\235\ The complete 
replacement of E10 consumption by E15 would increase the amount of fuel 
ethanol consumed in the U.S. by 50%. While the magnitude of the 
associated transportation sector emissions reduction would depend on 
the feedstocks being used, any increase to E15 consumption would 
contribute to the sector's de-carbonization. Additional actions to 
expand U.S. biofuel markets and establish greater RFS program certainty 
are needed to maximize near-term climate gains.

    Low Carbon Fuel Standard

    The success of California's LCFS and a lack of Federal action on 
climate policy after 2016 has prompted similar policies to be proposed 
in other states. Oregon adopted a LCFS under its Oregon Clean Fuels 
Program that mandates a 10% reduction to the carbon intensity of its 
transportation sector from 2015 levels by 2025.\236\ Efforts to 
implement a statewide LCFS in neighboring Washington are ongoing 
despite the failure of an earlier attempt.\237\ Similar regional 
initiatives have been proposed in the Midwest \238\ and East 
Coast,\239\ although legislative action on these proposals has yet to 
occur.
    Efforts to implement a national LCFS date to 2007, when then-U.S. 
senator Barack Obama introduced a bill to require future reductions to 
the carbon intensity of the U.S. transportation sector.\240\ While that 
proposal was ultimately discarded in favor of legislation that created 
the RFS2, the U.S. House Select Committee on the Climate Crisis 
recently recommended that the RFS2 be transformed into a national 
LCFS.\241\ That recommendation also included a provision to expand the 
remit of the RFS2 to include shipping and aviation fuels, in addition 
to on-road transportation fuels, as part of the transformation. The 
success of California's LCFS and steps by other states to adopt similar 
programs suggests the time has come for a Federal low-carbon fuel 
standard.

    Other Fuel Policies

    In addition to market-driving programs such as the RFS and LCFS, 
ongoing Federal and state investments in the improvement of existing 
biofuels and the development of next-generation biofuels are 
recommended to achieve the greatest near-term climate benefit. Robust 
Federal investment in biofuel research and development at the U.S. 
Department of Energy and USDA and long-term tax credits or other 
incentives for private-sector biofuel research and development and 
facility construction are recommended to help drive additional private-
sector investment in low-carbon fuels.
    The development of a long-term sustainable aviation fuel specific 
blender's tax credit will attract significant investment to the sector, 
address existing structural and policy disincentives, and ramp up 
domestic SAF production to meaningful levels.. Further continuation of 
the Second Generation Biofuel Producer Tax Credit is incredibly 
important to companies that are making significant investments to 
create new agricultural supply chains, build infrastructure for liquid 
biofuels, and develop innovative new technologies.
4.3.2  De-carbonizing Industry
    Policy has historically favored the production of biofuels over 
other forms of biobased products. Renewable chemicals and other non-
fuel biobased products that achieve GHG emission reductions, such as 
those described in Section 2, will need to be supported if sectors 
outside of transportation are also to be successfully Dearborn. Several 
potential mechanisms exist for achieving this result, some of which 
build upon existing policy frameworks and others that employ more novel 
approaches.

    Renewable Chemical and Biobased Product Programs

    The U.S. Government operates two important farm bill energy title 
programs, the BioPreferred Program and the Biorefinery, Renewable 
Chemical, and Biobased Product Manufacturing Assistance Program, that 
support the commercial development of renewable chemical and biobased 
product manufacturers. These producers continue to face substantial 
hurdles to commercialization due to the lack of an even playing field 
with producers of competing products from fossil fuels.
    The BioPreferred Program, originally authorized under the 2002 Farm 
Bill and reauthorized and expanded under the 2018 Farm Bill, includes a 
Federal biobased product procurement preference program and a voluntary 
USDA labeling program for biobased products.\242\ These programs have 
significantly increased both consumer awareness and market demand for 
biobased products. The 2018 Farm Bill provided increased funding for 
BioPreferred and, among other provisions, directed USDA and the 
Department of Commerce to develop North American Industry 
Classification System (NAICS) codes for renewable chemicals and 
biobased products.\243\ The 2020 National Academies of Science report 
on ``Safeguarding the Bioeconomy'' cites the lack of an industry 
classification system for biotech products as a significant roadblock 
to investment and broader adoption, and recommends a series of actions 
to fill this gap.\244\
    The Biorefinery, Renewable Chemical, and Biobased Product 
Manufacturing Assistance Program (BAP) provides loan guarantees for the 
development, construction, and retrofitting of commercial-scale 
biorefineries.\245\ The 2018 farm significantly expanded and 
streamlined the BAP loan program.
    The Commerce Department and USDA should move swiftly to implement 
biobased product classification systems, and Congress should fully fund 
BioPreferred and the BAP loan program.

    Tax Policy

    Tax policy has been a vital early driver of biofuel and other 
renewable energy development. Several recent policy proposals seek to 
provide a similar push to non-fuel biobased products. A proposed change 
to Federal tax law would enable producers of biobased products to 
utilize the Master Limited Partnership pass-through tax structure that 
is widely employed by fossil fuel producers to improve access to 
capital and reduce tax burdens.\246\ Such an expansion has been 
employed in the past in the U.S. to support the development of 
renewable electricity and biofuels logistics infrastructure, making its 
absence in the biobased products sector particularly notable. Federal 
legislation to expand existing business-related and investment tax 
credits to include renewable chemicals production has also attracted 
bipartisan support in Congress,\247\ although it has yet to become law.
    U.S. tax policy should be updated to extend renewable energy tax 
incentives to renewable chemicals and biobased products.
4.3.3  De-carbonizing Agriculture
    One of the most important mechanisms available to leverage 
biotechnology for climate mitigation is agriculture policy. As 
discussed in section 2, the carbon intensity of industrial products is 
highly dependent on the carbon intensity of feedstocks. Substitution of 
biobased feedstocks for fossil feedstocks is an essential step, but the 
greatest gains are achieved when climate objectives are integrated into 
the production of the feedstocks themselves, internalizing the 
environmental benefits that are provided by producers of biobased 
products, especially those that operate within the agricultural sector.
    One such proposal would expand farm bill programs such as the 
Conservation Stewardship Program, which encourages producers to 
undertake conservation activities on working lands,\248\ to include 
practices that decrease the carbon intensity of agricultural production 
while increasing crop yields. Likewise, the existing section 45Q tax 
credit for certain CC&S technologies could be expanded to encompass the 
building of soil carbon in the U.S. agriculture sector.
    The agriculture sector faces high barriers of entry to voluntary 
carbon credit programs that prevent their full carbon sequestration 
potential from being recognized. Federal legislation such as the 
Growing Climate Solutions Act of 2021 has been introduced as a means of 
enabling the private-sector to overcome these hurdles,\249\ but Federal 
agencies could also provide additional support by expanding existing 
agricultural conservation programs and creating agricultural 
sequestration certification programs.
    Congress and the White House should move swiftly to implement 
programs to reward farmers for reducing the carbon footprint of 
feedstock production and for capturing and sequestering carbon.
4.3.4  Negative-Carbon Technologies
    To achieve agreed upon climate mitigation objectives, a major focus 
of climate policy must be investment in negative-carbon technologies. 
This will require policies that drive carbon capture, use and storage 
throughout the economy, including in agriculture and manufacturing. 
This should include sector-specific programs in each of these areas. 
Climate policy should drive investment in agricultural biologicals, 
plant biotechnology and other biotechnologies to increase soil carbon 
sequestration and should reward microbial carbon capture and other 
biotechnologies for carbon removal and recycling. Provisions for 
biological carbon capture and use in the section 45Q tax credit provide 
a template for inclusion of these technologies in future climate 
policy.
4.3.5  Economy-Wide Climate Programs
    The U.S. transportation and power sectors have been the primary 
focus of policymakers due to their large share of total U.S. GHG 
emissions (28% and 27%, respectively, in 2018).\250\ Several states 
have adopted more ambitious long-term policies that require the full 
de-carbonization of their economies by 2050, however, and the remaining 
sectors (industry, commercial/residential, and agriculture) will need 
to achieve future carbon intensity reductions greater than those that 
have been achieved by the power and transportation sectors to date if 
these policies are to be successful.
    The first such state policy to be implemented was California's 
Global Warming Solutions Act of 2006, which mandated an economy-wide 
emission reduction of 80% by 2050.\251\ In 2018 California's governor 
issued an Executive Order that changed this target to 100% on a net 
basis by 2045.\252\ Equally ambitious is the New York Climate 
Leadership and Community Protection Act (CLCPA). Passed in 2019, the 
CLCPA requires that the state's economy-wide emissions by reduced by 
100% by 2050,\253\ although up to 15% of the reduction can take the 
form of offsets such as those described in Section 2.2. Colorado, 
Connecticut, Maine, Massachusetts, Minnesota, Nevada, Rhode Island, and 
Washington also all have statutory targets requiring statewide GHG 
emission reductions of at least 80% by 2050.\254\
    A notable aspect of the deep economy-wide de-carbonization targets 
is that they will likely require the widespread deployment of carbon-
negative technologies and non-fuel bioproducts in order to be 
successful. Policy language referring to ``net zero'' emissions targets 
or, in the case of New York, explicit carbon offset thresholds reflects 
the recognition of this probable outcome by policymakers. Existing 
state de-carbonization requirements also identify varying degrees of 
de-carbonization difficulty for different economic sectors. New York's 
statutory target, for example, imposes an absolute zero-emission target 
on its power sector by 2040 through language that explicitly excludes 
the use of carbon offsets by that sector. The reason for this 
distinction is the expectation that zero-emission technologies such as 
solar PV and wind will enable an absolute zero requirement to be 
achieved. Those sectors such as transportation and manufacturing that 
utilize more energy-intensive systems, by contrast, will need to rely 
upon biomass and biotechnology to achieve net-zero emissions, sometimes 
via carbon-negative technologies, while supplying close substitutes for 
the fossil fuels and products that modern economies rely upon.
    Existing government efforts in the U.S. to incentivize de-
carbonization have largely been limited to the transportation sector, 
whereas the implementation of performance-based de-carbonization 
standards in manufacturing would enable the broad scope of 
biotechnology's benefits to be recognized by the market. Such standards 
include, but are not limited to, financing R&D, promoting alternatives 
to non-fuel fossil products, supporting and expanding sustainable 
procurement policies, and incentivizing the development of green 
manufacturing and sustainable agriculture practices.
    Recent years have seen only limited action at the Federal level to 
encourage the utilization of biotechnology's de-carbonization 
potential. Several states have adopted more ambitious long-term 
economy-wide de-carbonization targets, however. While the policy 
mechanisms to achieve these targets have yet to be established, their 
success will likely depend on the extent to which the policies properly 
value the de-carbonization, including net carbon sequestration, 
abilities of both fuel *
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    * Editor's note: the paragraph is not completed in the submitted 
report. It has been reproduced herein as submitted.
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Summary and Conclusion
          ``Climate change will affect every person, nation, industry, 
        and culture on Earth.''

    Avoiding its worst effects will require an equally universal 
response. The biotechnology industry is uniquely positioned to play a 
leading role in the effort to reduce emissions, adapt to new climate 
conditions, and address the needs of the 21st century and beyond. In 
this report, three key themes have emerged. These themes should guide 
policymakers--and the biotech industry itself--if we are to achieve the 
full potential of biotechnology to address climate change.
    Biotechnology is an essential climate mitigation tool. Biotech has 
already delivered vital climate solutions and holds the potential to 
provide transformative climate technologies across a broad spectrum of 
industrial sectors.
    Biotech can achieve at least 3 billion tons of CO2 
equivalent mitigation annually by 2030 using existing technologies. The 
biotechnologies with the greatest potential impact include:

   Biotech solutions have the potential to reduce agriculture 
        sector GHG emissions by nearly 1 billion metric tons (1 
        gigaton) annually--or the equivalent of GHG emissions from more 
        than 100 million U.S. homes. This includes reducing nitrous 
        oxide emissions from agriculture by over 150 million metric 
        tons of carbon equivalent and enhancing soil carbon 
        sequestration by up to 600 million metric tons per year through 
        a combination of agriculture biotechnology and agricultural 
        biologicals.

   The transition to next-generation biofuels enabled by 
        biotechnology will double the per-gallon emissions reductions 
        of biofuels versus petroleum. Doubling biofuel use through 
        broad adoption of next-generation biofuels in aviation and 
        other transportation sectors would increase the contribution of 
        biofuels to U.S. transportation sector GHG emissions reductions 
        from 980 million tons over the past thirteen years to over 1.8 
        billion tons for the decade 2020-2030, a reduction equivalent 
        to taking more than 45 coal-fired power plants offline.

   Broad adoption of algal and microbial feed ingredients that 
        reduce enteric methane emissions from ruminant animals can 
        avoid the equivalent of up to 140 million metric tons of carbon 
        annually.

   Broad adoption of anaerobic digestion for animal waste would 
        reduce U.S. GHG emissions by over 150 million metric tons 
        annually using current technology.

   Bioenergy with Carbon Capture and Sequestration (BECCS) 
        could cost-effectively remove over 700 million metric tons of 
        carbon per year, or more than half the emissions from all U.S. 
        coal power plants.

   Suitable land and other infrastructure exists to deploy 
        algae-based carbon capture systems at more than 500 power 
        plants and ethanol facilities in the U.S. These systems would 
        have a potential to capture more than 200 million tons of 
        CO2 annually.

    Emerging biotechnologies could have transformative GHG benefits in 
a range of industrial sectors. Among the most promising applications 
are:

   Biobased plastics and polymers, such as PLA, PHA, and BDO 
        have achieved lifecycle GHG reductions of up to 80% versus 
        their petroleum-based counterparts. A rapidly growing list of 
        new biobased chemical building blocks is now in development.

   Plant-based and cultured meats are providing new consumer 
        choices and up to 89% lower lifecycle emissions for a global 
        food sector responsible for more than \1/3\ of total GHG 
        emissions.

   Biology-based parallel computing and DNA data storage have 
        the potential to cut the energy and carbon footprints of 
        computing and data storage--sectors expected to account for 14% 
        or more of global GHG emissions by 2040--by 99% or more versus 
        current technology.

    Biotechnology offers vital contributions to near-term GHG 
reductions and revolutionary tools to combat climate change in the 
longer term. To successfully address the challenge of climate change, 
humanity will need to predominantly de-carbonize the global economy by 
mid-century and begin significantly drawing down concentrations of 
atmospheric carbon shortly thereafter. The struggle against climate 
change must be viewed as a multi-decade process, which needs to begin 
immediately. A ton of carbon emissions avoided now matters more than a 
ton avoided next year, but every step needs to be evaluated from the 
perspective of maintaining a trajectory towards success.
    An aggressive combination of sector-based and economy-wide policies 
is needed to rapidly realize the full potential of biotechnology to 
combat climate change. The future growth of the U.S. biotechnology 
industry will be heavily affected by both existing and potential 
regulatory barriers, and by the degree to which governments invest in 
the development and deployment of biotech solutions. Biotechnology is a 
vital component of the national and global infrastructure needed to 
combat catastrophic climate change. The economy-wide scope of this 
challenge will require the adoption of policies that reflect the 
ability of biotechnology products to achieve de-carbonization across 
all major sectors of the U.S. economy. Biotechnology companies will 
need to speak up not only to ensure that new policy provides 
opportunities for success, but to make it clear that prosperity is not 
threatened by sustainability. There is ample evidence that reducing 
emissions is, in fact, essential in supporting a thriving economy.
    The biotechnology industry has a tremendous opportunity to build 
upon decades of success, and provide critical tools and expertise for 
the decades to come. Like every other industry, change will be profound 
and lasting, but if any industry can demonstrate that change can be an 
opportunity for growth, it is this one.

 
 
 
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                                 ______
                                 
Submitted Letter by Donnell Rehagen, Chief Executive Officer, National 
                            Biodiesel Board
November 16, 2021

    Dear Chairman Delgado, Ranking Member Fischbach, and Honorable 
Subcommittee Members,

    Thank you for considering the testimony of America's clean fuel 
producers, who play a pivotal role in the U.S. bioeconomy.
    The National Biodiesel Board (NBB) represents the cleanest, lowest 
carbon fuels available at a commercial scale today for use in existing 
diesel engines and in many of the hardest-to-de-carbonize 
transportation sectors. Our members include biodiesel, renewable 
diesel, Bioheat' fuel, and sustainable aviation fuel (SAF) 
producers as well as soybean growers and waste fats and oil processors. 
NBB is the industry's central coordinating entity for technical, 
environmental, and quality assurance programs and the strongest voice 
for its advocacy, communications, and market development.
Jobs and Economic Growth
    The U.S. market today uses more than 3 billion gallons of these 
clean fuels--which supports more than 65,000 jobs across the country 
and generates more than $17 billion in economic opportunity. Our 
industry is on a path to sustainably grow domestic production to 6 
billion gallons annually by 2030, which can eliminate more than 35 
million metric tons of greenhouse gas emissions each year. Every 100-
million-gallon increase in U.S. production supports an additional 3,200 
jobs and $780 million in economic activity and can eliminate an 
additional metric ton of greenhouse gas emissions each year.
    With advancements in feedstock, the market can reach 15 billion 
gallons by 2050. The United States will need these fuels in the future 
to meet the nation's clean air, energy, and agriculture goals--which 
are also the goals of the bioeconomy.
    Our industry includes many small biodiesel producers in addition to 
large, integrated companies. In many rural areas of the country, small 
biodiesel plants are a driving force of the local economy, supporting 
the employment of plant operators, technicians and engineers as well as 
local construction workers, truck drivers and farmers. The economic 
opportunities and rural community development demonstrate biodiesel's 
potential to contribute to the rural, renewable economy.
Value Added to Other Bioeconomy Sectors
    Our industry's clean fuels are made from an increasingly diverse 
mix of resources, including recycled cooking oil and animal fats as 
well as surplus soybean, canola and distillers corn oils. Our fuels add 
value to fats, oils and greases that might otherwise lead to costs for 
other sectors of the bioeconomy.
    For example, soybean oil is separated from soybean meal through 
oilseed crushing. Demand for the meal as a high protein animal feed 
drives growth in soybean production, which reached 4.4 billion bushels 
in the current marketing year. This growth creates an ever-increasing 
surplus of oil.
    About 60 percent of the separated oil is currently used in U.S. 
food production, with some additional exports. However, the volume of 
oil for food and exports has been stable over the past decade without 
any growth. Biodiesel and renewable diesel producers are currently the 
only commercial-scale industry capable of absorbing the growing surplus 
of soybean oil. Approximately half of the biodiesel produced in the 
U.S. comes from soybean oil.
    Traditionally, roughly half of all U.S.-grown soybeans have been 
exported each year--and crushed overseas--to meet animal feed demand. 
Instability in these markets--including trade wars--combined with 
growing markets for renewable fuels in the United States are 
encouraging investment in more U.S. crush capacity to keep the value of 
soybean oil here at home.
    StoneX estimates that without biodiesel and renewable diesel 
production, the value of every bushel of soybeans grown in the United 
States could fall as much as 13 percent. Growth in biodiesel and 
renewable diesel production is enhancing the value of soybean oil to an 
increasing share of the value of the overall bushel. The bottom line is 
that farmers receive better value for their soybeans thanks to their 
partnerships with biodiesel and renewable diesel producers.
    Rural livestock producers also benefit from increased biodiesel 
production. By boosting the value of surplus soybean oil--which would 
otherwise represent a loss to crushers--biodiesel production provides a 
counterweight to the price of soybean meal and the cost of raising 
poultry and livestock. As more surplus soybean oil is processed for 
biodiesel production, farmers can grow and crushers can process more 
soybean meal for animal feed at a lower price. Informa Economics has 
estimated livestock producers pay $21 per ton less for soybean meal due 
to increased biodiesel production and use.
    Approximately \1/4\ of all animal fats produced in the U.S. now go 
into biodiesel. Higher demand has led to increased value for those 
fats. While the price of animal fats are not primary drivers in 
determining the prices paid for fed cattle and market hogs, they do 
affect the profit margins in these industries.
    Similarly, restaurants and other businesses must engage 
environmental service firms to handle used cooking oil, which is 
designated by the Environmental Protection Agency as a hazardous waste. 
By adding value to recycled cooking oil, biodiesel and renewable diesel 
production provides a counterweight to the costs for restaurants and 
environmental service companies to meet these regulations.
Environmental Health Contributions
    Clean fuel production contributes to the bioeconomy by reducing the 
impacts and costs of carbon and particulate emissions. Biodiesel and 
renewable diesel reduce greenhouse gas emissions on average by 74% 
compared to petroleum diesel. In difficult-to-de-carbonize 
transportation applications--the majority of diesel end-uses--these 
clean fuels immediately and substantially reduce greenhouse gas 
emissions. Additionally, they significantly reduce criteria pollutants 
from diesel transportation and other end-uses, which can have direct 
benefits for both rural and urban communities.
    Biodiesel and renewable diesel have reduced U.S. emissions by 143.8 
million metric tons since 2010, when the Renewable Fuel Standard first 
included biomass-based diesel obligations. These fuels have also made 
significant contributions to the carbon reduction goals of many states. 
For instance, California's total biodiesel and renewable diesel volume 
grew to 855 million gallons in 2020, meeting nearly 24% of California's 
total diesel demand for the year. These fuels have reduced the state's 
greenhouse gas emissions by 32.3 million metric tons since 2011.
    In the Northeast, biodiesel and Bioheat' fuel will be 
required to meet the states' carbon reduction goals. Currently, one in 
five existing homes in the Northeast (around 4.5 million) rely on oil 
heat, using more than 2.3 billion gallons yearly. The region's 
biodiesel and Bioheat' fuel use annually avoids more than 
1.5 million tons of CO2 emissions, equivalent to removing 
320,000 vehicles from the road or the emissions from annual energy use 
by 180,000 homes.
    In addition to having one of the lowest carbon intensities of any 
liquid fuel, biodiesel also significantly reduces criteria pollutants 
from diesel transportation and other end uses. Major trucking 
corridors, warehouse distribution centers and other diesel hot spots 
close to population centers (often rural communities) can inflict 
serious harms to human health and often highlight disparities in the 
impacts of transportation pollution burdens as a result of emissions 
from petroleum fuel. Since biodiesel and renewable diesel cut these 
harmful emissions by half, their use can generate immediate health 
benefits for rural and disadvantaged communities.
    A recent study, conducted by Trinity Consultants for NBB, shows 
that converting from petroleum-based diesel to 100 percent biodiesel 
(B100) results in a multitude of health benefits at the neighborhood 
level, including lowering cancer risk, reducing premature deaths, and 
decreasing asthma attacks. The study quantifies public health benefits 
and corresponding economic savings of converting from petroleum-based 
diesel to B100 for 13 disadvantaged communities in the U.S. currently 
exposed to some of the highest rates of petroleum diesel pollution.
    The study found that switching to B100 in the home heating oil and 
transportation sectors would provide immediate community health 
improvements that can be measured in reduced medical costs and health 
care benefits, including approximately 50,000 fewer sick days in the 
study demographics.
    In the transportation sector, benefits included a potential 44 
percent reduction in cancer risk when heavy-duty trucks use B100, 
resulting in 203,000 fewer or lessened asthma attacks for the 
communities studied. When biodiesel is used for home heating oil, the 
study found an 86 percent reduced cancer risk and 17,000 fewer lung 
problems for the communities studied.
    These are benefits that can be achieved today with available 
production of biodiesel, renewable diesel and Bioheat' fuel. 
Since the study focused on only 13 communities, it represents the tip 
of the iceberg in what can be accomplished this decade through growth 
of the clean fuels industry.
Supportive Federal Policies
    As Congress develops legislation to address the nation's 
infrastructure, climate and economic priorities, we ask that you 
support continued growth of the biodiesel and renewable diesel industry 
as a pivotal driver of economic opportunities for rural America. The 
Renewable Fuel Standard and biodiesel tax incentive have supported the 
growth of our industry to 3 billion gallons. Extension and optimization 
of policies will support the rural bioeconomy in the future.
    Our industry grows and creates jobs and economic opportunities in 
rural communities when the biodiesel tax incentive is stable and 
forward-looking. For example, in 2020 the U.S. market for biodiesel and 
renewable diesel increased by nearly 200 million gallons even while the 
coronavirus pandemic reduced overall demand for transportation. We 
applaud Congress' proposal to provide a straightforward, multiyear 
extension of the biodiesel tax incentive.
    NBB and its members appreciate the leadership of Rep. Cindy Axne 
(D-IA) and many others for advocating a long-term extension of the 
biodiesel tax incentive in the Build Back Better Act. This provision 
grew out of bipartisan legislation--H.R. 3472--that she cosponsored 
with Rep. Mike Kelly (R-PA) and 41 other Members of the House. The 
policy enjoys bicameral support with companion legislation, introduced 
by Senators Grassley and Cantwell and cosponsored by 12 other Senators. 
We ask that Congress maintain an equitable balance in duration and 
value for the policy in relation to other renewable energy incentives.
    NBB and its members also applaud efforts to continue the Federal 
matching grant program supporting higher blends of biodiesel. USDA's 1 
year Higher Blends Infrastructure program was a huge success, providing 
a tremendous return at a very low-cost. To date, \1/3\ of the program's 
announced grants have been awarded to 24 biodiesel projects, which 
received a combined $23.2 million. Completion of these projects will 
increase consumer access to 910.7 million gallons of biodiesel while 
eliminating 8.5 million metric tons of greenhouse gas emissions every 
year at a 1 year cost of $2.83 per ton. Continuing the program will 
help the industry build or retrofit terminals, storage, and rail 
capacity to extend access to these clean, low-carbon fuels.
    We thank Reps Angie Craig (D-MN) and Axne for championing a 10 year 
authorization and funding of this grant program and support its 
inclusion in the Build Back Better Act. The proposal evolved from 
bipartisan, bicameral legislation cosponsored by Reps. Rodney Davis (R-
IL) and Dusty Johnson (R-SD) as well as Sens. Amy Klobuchar (D-MN) and 
Joni Ernst (R-IA). It promises to be an effective way to expand 
consumer access to cleaner, low-carbon transportation options.
    Additionally, Congress can work with the Environmental Protection 
Agency to optimize the Renewable Fuel Standard to achieve carbon 
emission reductions. It is clear that 2021 will end without EPA 
establishing an RFS rule for the year. It is also clear that EPA cannot 
meet its statutory deadline to set a 2022 rule and 2023 volumes before 
next year. And EPA must still consider more than 60 small refinery 
exemption petitions for 2019, 2020 and 2021.
    EPA's delays in rulemaking create uncertainty for the biodiesel and 
renewable diesel industry, which hampers growth and opportunities 
within the rural economy. The delays allow refiners to manipulate the 
RFS rules and create uncertainty for renewable fuel producers. And 
uncertainty among biodiesel producers could undercut the value of this 
year's soybean harvest and impact jobs and economic growth 
opportunities throughout rural America.
    Congress must encourage EPA and the Administration to support 
reasonable, sustainable growth in biodiesel volumes, issue annual rules 
in a timely manner, and increase the transparency of the small refinery 
exemption process.
Conclusion
    NBB and its members thank the Committee for holding this hearing 
and considering this written testimony. The clean fuels industry is a 
pivotal contributor to rural economies across the country, creating 
jobs and value-added markets for agricultural partners. Moreover, 
biodiesel and renewable diesel use can improve environmental health and 
reduce associated costs for both rural and urban communities. Cleaner, 
better fuels highlight the contribution that rural economies can make 
to the nation's overall climate and carbon reduction goals. We look 
forward to working with Congress on policies that maximize these 
benefits.


Donnell Rehagen, CEO,
National Biodiesel Board.
                                 ______
                                 
   Submitted Letter by Rina Singh, Ph.D., Executive Vice President, 
            Policy, Alternative Fuels & Chemicals Coalition
November 16, 2021

 
 
 
Hon. Antonio Delgado,                Hon. Michelle Fischbach,
Chairman,                            Ranking Minority Member,
Subcommittee on Commodity            Subcommittee on Commodity
 Exchanges, Energy, and Credit,       Exchanges, Energy, and Credit,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.;
 
Hon. David Scott,                    Hon. Glenn Thompson,
Chairman,                            Ranking Minority Member,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairman Delgado, Chairman Scott , Ranking Member Thompson, 
Ranking Member [Fischbach], and Members of the Subcommittee:

    Alternative Fuels and Chemicals Coalition (AFCC) appreciates the 
opportunity to submit statement for the record to the United States 
House Subcommittee and House Agriculture Committee on the hearing, ``A 
Look at the Renewable Economy in Rural America'' being held on November 
16, 2021.
    AFCC and its member companies applaud the House Subcommittee on 
Commodity Exchange, Energy and Credit in addressing both short term and 
long term goals [from] which rural America would flourish, and prosper 
through new jobs.
Introduction
    AFCC is a collaborative government affairs effort organized by the 
Kilpatrick Townsend & Stockton law firm and American Diversified 
Energy. AFCC was created to address policy and advocacy gaps at the 
Federal and state levels in renewable chemicals, bioplastics/
biomaterials, cell-cultured food ingredients, single cell protein for 
food and feed, enzymes, alternative fuels, biobased products and 
sustainable aviation fuels (SAF) sectors. AFCC member companies work on 
feedstocks, renewable chemicals, food, feed, fiber, bioplastics and 
biomaterials, and biofuels impacting the biobased economy.
Modernizing USDA BioPreferred' Program
Tracking Renewable Chemicals and Biobased Products: NAICS Codes
    The 2018 Farm Bill directs the Secretary of Agriculture and the 
Secretary of Commerce to jointly develop NAICS codes for renewable 
chemicals and biobased products manufacturers. Biobased product 
specific codes would greatly enhance the ability to track and report on 
the biobased products industry. While there is no single, centralized 
Federal reporting system for collecting data on Federal renewable 
chemicals and biobased product procurement, the requirement for the 
development of standardized NAICS codes for renewable chemicals and 
biobased products will provide a unique opportunity for standardizing 
reporting.
    AFCC and its member companies strongly urge that OMB and the ECPC 
work with United States Department of Agriculture and Department of 
[Commerce] to develop the NAICS codes for renewable chemicals and 
biobased products as Congress directed in the 2018 Farm Bill. The NAICS 
codes for renewable chemicals and biobased products manufacturers are a 
requirement now since the specific NAICS codes would greatly enhance 
the ability to track and report on the renewable chemicals and biobased 
products industry, determine the funding requirements from Federal and 
state governments, track innovative activities in the sector, mitigate 
climate change, and capture the jobs created.
USDA Federal Biobased Procurement
    The USDA Federal biobased procurement program, the 
BioPreferred' Program, encourages purchasing ``green.'' 
While the program has been successful in certifying (labeling) products 
over the years, Federal agencies have not been required to buy 
BioPreferred' options where available. There is a lack of 
transparency with all stakeholders in the procurement process and sales 
data. Moreover, when advocates for the BioPreferred' Program 
try to tap into the additional discretionary funding approved for the 
program in the 2018 Farm Bill, they are asked by Congress: ``How well 
is the program doing?'' Without sound sales numbers, it is very 
difficult for program advocates to answer this question and for 
Congress to continue supporting the growth of the program. If the 
program were operating properly, it would be very successful. The 
failings of this program need to be addressed immediately, and more 
time needs to be spent by USDA and its contractors developing the 
procurement side of the program, determining what these sales numbers 
are in reality, and operating the program as Congress intended. The 
appropriate steps need to be taken in the implementation of the 
program. There are contractors assigned by Federal agencies to 
facilitate the procurement of biobased products.
Develop Sustainability Parameters: Carbon Footprint
    At a time of increased pressures on retailers, brands and 
manufacturers to reduce the carbon footprint of their products there 
exists the opportunity to create and implement a carbon intensity label 
or seal of biobased products for renewable chemicals and biobased 
products which are in the USDA BioPreferred' catalog. The 
carbon intensity score will be determined through the development of an 
American Standard Test Method (ASTM). A carbon intensity label would be 
of increased interest and importance to all consumers providing 
purchasing choices. Currently, the BioPreferred' Program 
does not have sustainability parameters, instead only has a biocontent 
which is focused on beginning of life and not end of life for the 
consumer product.
Smart Climate Practices for Rural America: Development of ASTM Seal
Regenerative Agriculture Practices
    It is imperative that the USDA enables American producers to 
participate in climate conscious initiatives, including the promotion 
of healthy soils, carbon markets and alternative fuels, that are being 
demanded by consumers worldwide. American agriculture has the unique 
opportunity to model to the world best-in-class regenerative 
agriculture practices and value-added products backed by a traceable, 
verifiable data. This must be implemented by meeting producers where 
they are today, incentivizing the sound regenerative practices used 
across the United States, and providing the tools needed to realize the 
opportunities such as precision agriculture technologies and e-
connectivity. The measure of carbon in the soil through standard 
practices developed in an ASTM will help farmers obtain tax incentives 
such as 45Q using a standardized test method for determining carbon 
capture in soil.
    Creating an ASTM standard based on good science practices that 
utilizes baseline soil carbon storage, annual carbon sequestration 
level along with classical life cycle analysis to provide a standard 
for certifying a carbon intensity (CI) score across a broad diversity 
of product categories.
    The ASTM standard would assist in developing standard used in:

   45Q for carbon capture in soil[.]

   The Growing Climate Solutions Act would create a voluntary, 
        producer-led carbon sequestration certification program at the 
        U.S. Department of Agriculture (USDA) and provide farmers with 
        technical resources to participate in carbon markets.

   USDA BioPreferred' Program with sustainable 
        parameters or carbon footprint, thus providing consumers 
        choices to purchase biobased products with a carbon intensity 
        (CI) score.
New Grant Program: The Bioeconomy Development Opportunity (BDO) Zone 
        Program
BDO Zone Supports Energy Infrastructure in Rural & Distressed 
        Communities
    The Bioeconomy Development Opportunity Zone Program is a 
certification and regional designation grant program that enables 
economic development agencies and communities to more effectively and 
credibly disclose feedstock-related risks and promote biobased 
development opportunities to developers and investors around the world.
    The BDO Zone Program will leverage up to $50,000,000 to facilitate 
the awarding of regional feedstock and infrastructure risk ratings for 
communities in U.S. Federal Opportunity Zones to support the 
development, scale-up and investment in new facilities that produce 
renewable chemicals, sustainable aviation and ground transportation 
fuels, and other biobased manufacturing in low income rural and urban 
areas.
    The BDO Zone Program will match investments from state economic 
development agencies with grants of up to $1,000,000; it will match 
investments from local economic development agencies, communities, 
nonprofits, and the private-sector with grants of up to $100,000. The 
program will be funded by $25,000,000 from mandatory Federal funds. 
Support a national rollout of the Bioeconomy Development Opportunity 
(BDO) Zone Initiative to drive biobased jobs and infrastructure 
development in economically distressed communities
Background
    The BDO Zone Initiative supports clean energy infrastructure 
development, equitable clean energy transition and social justice, by 
leveraging the New Market Tax Credit and Opportunity Zone tax 
incentives to drive new biofuel, biochemical, biogas and biomaterial 
production facilities in economically distressed regions.
    Fifty-two million Americans live in economically distressed 
communities. These communities are plagued by a lack of investment 
capital--but many of them have substantial biomass assets in the form 
of corn stover, wood fiber, and food and farm waste. These are 
essential supply chain components for plants that produce ground and 
aviation biofuel, renewable chemicals and bioproducts. The problem is 
that these communities do not have the budget, the platform, or the 
credibility to communicate this to biobased investors and developers 
around the world.
    The BDO Zone Initiative solves the problem by enabling communities 
to powerfully leverage biomass assets to serve as anchors for clean 
energy-based economic development.
    The BDO Zone Initiative awards ``AA'' or ``A'' ratings to areas 
that have undergone rigorous and extensive due diligence studies, using 
an analysis framework comprised of more than 100 standardized, 
transparent and validated risk indicators. BDO Zone Ratings enable 
developers and investors to identify areas that qualify for powerful 
tax incentives and that present the low feedstock risk characteristics 
essential for financing biobased development. In short, BDO Zone 
Ratings identify the regions best positioned to locate new plants that 
produce biogas, biofuels, renewable chemicals, and biomaterials.
    BDO Zone designations are force-multipliers for Federal, state and 
local incentive programs like the New Market Tax Credit and Opportunity 
Zone tax incentive, and other incentives designed to support renewable 
energy investment in economically distressed areas. Where BDO Zones 
overlap with these tax incentives, they supercharge the ability of 
these programs to unlock billions of dollars into biobased economic 
development and to create renewable energy jobs in economically 
challenged areas across the country.
    Thank you for the opportunity to provide statement for the record.
            Sincerely,
            
            
Rina Singh, Ph.D.,
Executive Vice President, Policy,
Alternative Fuels & Chemicals Coalition.
                                 ______
                                 
                          Submitted Questions
Question Submitted by Hon. J. Luis Correa, a Representative in Congress 
        from California
Response from Nan C. Stolzenburg, Principal Planner and Founder, 
        Community Planning & Environmental Associates
    Question. Renewable natural gas (RNG) is naturally occurring 
biomethane captured above the Earth's surface from sources such as 
dairies, poultry operations, and hog farms. When it is cleaned up, it 
is put into our existing natural gas infrastructure and can be used as 
a carbon neutral or carbon negative transportation fuel.
    In 2020, California fleets fueled with California-produced RNG were 
carbon-negative, based on an annual average carbon intensity score of 
^5.845 gCO2e/MJ, the lowest of any motor fuel in use 
including renewable electricity. New York State, another dairy state, 
is also leading in RNG production and use of clean-burning RNG in heavy 
duty vehicles.
    Ms. Stolzenburg, what incentives do you think are needed in order 
to continue investments in rural America, so that we can capture this 
waste liability and turn it into a clean transportation fuel?
    Answer. February 7, 2022

    Thank you for reaching out to me requesting additional information 
regarding the excellent question posed by Representative Correa. I am 
pleased to be able to provide additional information for consideration.
    Indeed, capturing biogas from farms is an important renewable 
energy source that benefits the environment, contributes to farm 
sustainability and profitability, provides new fuel sources, and that 
benefits our rural communities. In this memo, I have addressed several 
types of incentives that I feel are important. One group of incentives 
is oriented to communities to enhance planning for and acceptance of 
renewable energy facilities, and the other is oriented towards 
enhancing both profitability and support for participating in biogas 
technologies.
    On the farm side, financial viability is paramount in order for 
this to be successful. Adequate incentives need to be in place to 
enable agricultural producers to reduce greenhouse gas emissions, to 
reward quality environmental performance, and ultimately, to produce 
renewable energy. At the same time, it is important to also view 
provision of education and ongoing support as a needed incentive to 
help farmers learn about and implement these technologies. Another area 
out of my expertise for you to consider are incentives to utilities.
    Some of the incentives could include:

  1.  Expand the California program (Cap-and-Trade Program) to become a 
            national program.

        In 2006, California passed the Global Warming Solutions Act, 
            which called for the state to reduce its greenhouse gas 
            (GHG) emissions to 1990 levels by 2020. A key component of 
            this act is the Cap-and-Trade program, which created one of 
            the largest carbon markets in the world. This was 
            accomplished by setting a declining permissible level of 
            GHG emissions (the ``cap'') for entities in California and 
            requiring emitters to stay below the cap by either reducing 
            their emissions, or by purchasing and redeeming carbon 
            offset credits, which represent a real reduction of 1 
            metric ton of carbon dioxide equivalent emissions. Carbon 
            offset credits are valuable fungible commodities that can 
            be generated by registered compliance offset projects, 
            which are awarded credits based on GHG emission reductions 
            that are monitored and verified. A key component of the 
            compliance offset program is the livestock protocol, which 
            allows livestock operations such as dairy, cattle and swine 
            farms to generate carbon offset credits by installing 
            manure biogas control systems to reduce methane emissions 
            from their facilities. After undergoing monitoring and 
            verification, the livestock operators are awarded carbon 
            offset credits and can sell these credits to covered 
            entities in the Cap-and-Trade program. This not only 
            provides a valuable additional revenue stream for farmers, 
            but also allows them to transition their farms toward net-
            zero operations by significantly reducing the emission of 
            methane, which is a powerful greenhouse gas that is twenty-
            five times stronger than carbon dioxide.

  2.  Expand the California Low Carbon Fuel Standard (LCFS) program to 
            become a national program.

        In 2011 the California Air Resource Board (CARB) began 
            implementation of the LCFS regulation, which was designed 
            to incentivize the use of low-carbon fuels in the 
            transportation sector of California, and to incentivize the 
            production of such fuels. A key component of the LCFS 
            program is the production of renewable natural gas (RNG) 
            through livestock anaerobic digestion projects, which 
            allows farmers to produce RNG from biogas generated from 
            the digestion of manure at their facilities. The farmer is 
            awarded LCFS credits (which are fungible commodities 
            similar to carbon offset credits from the Cap-and-Trade 
            program) when the fuel is used in the transportation sector 
            in California. The number of credits awarded is based on 
            the carbon intensity (CI) of the fuel that is generated. 
            The lower the carbon intensity of the fuel, the more 
            credits can be awarded. Other states are already beginning 
            to adopt a legislation similar to the Low Carbon Fuel 
            Standard, to incentivize the de-carbonization of the 
            transportation sector, which is one of the biggest 
            contributors to climate change.
        Both the Cap-and-Trade program and the Low Carbon Fuel Standard 
            have paved the way to further incentivize the 
            implementation of anaerobic digesters at livestock farms, 
            by awarding farmers with valuable commodities that add a 
            significant additional revenue stream for farmers, as well 
            as providing a structured and scientifically defensible 
            protocol for drastically reducing methane emissions from 
            the agricultural sector. Other states should use these two 
            programs as a template for creating their own legislation 
            that incentivizes anaerobic digestion projects at livestock 
            farms, to create important sources of revenue for local 
            farmers, bolster rural economies, and significantly reduce 
            methane emissions from the agricultural sector, which has 
            been identified as a major contributor to climate change.

  3.  Expand USDA C-Change grants, other grants, and loan programs. Tax 
            incentives, tax credits to offset up-front costs associated 
            with building biodigester systems, cost sharing, cost 
            reimbursement, loan guarantees, and other funding sources 
            must be in place, but also must be easy for the farmer to 
            access, and easy to administer in order for them to take 
            advantage of. Adequate incentives in these forms should be 
            readily available to both farmers and utilities. Financial 
            incentives should facilitate private financing, carbon 
            pricing, and clean fuel standards.

        California created the Dairy Digester Research and Development 
            Program (DDRDP) which awards competitive grants to 
            implement dairy projects that result in methane emission 
            reductions and minimize or mitigate adverse environmental 
            impacts. As per EPA's AgStar, this program has been 
            ``instrumental in transforming the agricultural-based AD 
            industry. Most of these projects are focused on the 
            generation of RNG to be utilized in California and are 
            sourced from clusters of multiple farms.'' This is an 
            example of an incentive program that should be expanded 
            beyond California.

  4.  Increase awareness of and support to expand outreach to farmers 
            through such programs as the EPA AgStar program and other 
            educational efforts. There must be educational 
            opportunities and advocacy in place so that the farm 
            community learns about and understands the financial, 
            technical, agricultural, and community implications. Many 
            farmers are unaware of any of these programs, their 
            benefits, or how to get involved. Once involved, they need 
            a variety of technical support to implement and manage the 
            program. To expand the reach to all farms who are already 
            eligible for digester technology (such as those with more 
            than 500 cows, or 2,000 swine), there needs to be a 
            concerted effort to `get the word' out to fully support 
            these efforts. In addition to the AgStar program, an 
            additional incentive would be to ensure that farmers have 
            full support throughout the process. Enabling such 
            additional support through agencies such as Cooperative 
            Extension and our land-grant universities would be most 
            helpful. This is an area that Cooperative Extension can be 
            extremely helpful to work hand-in-hand with farmers on the 
            local level.

  5.  Many rural communities react negatively to renewable energy 
            facilities and activities and local plans and land use 
            regulations often place barriers to this and other types of 
            renewable energy facilities. Examples of `NIMBY' related to 
            renewables (especially solar) are extremely prevalent. 
            While currently there are many challenges solar and wind 
            facilities face, it is also relevant to the discussion of 
            biomethane production and transportation when local 
            residents become concerned about pipelines, truck traffic, 
            noise, smells, fear of pollution, and industrial 
            development in their community. This is a community 
            planning issue and one that we cannot ignore.

        In order to integrate renewable energy into local landscapes 
            and economies at a scale and design that also meets the 
            many other needs and goals a community might have, there is 
            a large need for adequate community planning. Many rural 
            communities, especially, feel that the burden of hosting 
            such facilities and negative consequences that may result 
            from that fall disproportionately on them to serve urban 
            areas. Communities need to be able to understand, evaluate, 
            and find mechanisms to include and balance a variety of 
            land uses. This is usually accomplished through long-term 
            comprehensive or strategic planning, followed by updating 
            local regulations. Many communities have neither the funds 
            nor the expertise to develop these plans. Incentives to 
            promote these activities include providing technical 
            support and planning grants to local governments to improve 
            their planning and zoning. These grants should require 
            evaluation of and planning for expanded renewable energy 
            facilities, as well as smart growth, transportation- and 
            transit-oriented development, and farmland protection 
            measures. Few states and even fewer local municipalities 
            have actually gone through a concerted planning process to 
            identify locations that would be acceptable and suitable 
            for renewable facilities.
        Good planning would involve identifying both natural resources 
            and critical local features that need to be protected and 
            identifying locations that have the right conditions for 
            the renewable facility, such as proximity to transmission 
            lines. Through use of Geographic Information System 
            technology, these criteria for siting solar and other 
            renewables can be easily applied and mapped. Communities 
            could collectively make choices about where they can accept 
            such facilities. Local policies can be fashioned to 
            facilitate this. Such planning would give both renewable 
            energy developers and local communities guidance as to 
            where to focus efforts and this will lead to more efficient 
            and better approval outcomes. It would eliminate the 
            perspective that renewable facilities are being `foisted' 
            on them but that benefit others.

    I also reiterate information from my oral testimony that offers 
additional details on several community-level incentives that I 
recommended:

   Provide assistance in the form of technology and staff to 
        help communities navigate myriad sources of information. Fund 
        agencies such as Cooperative Extension or others to serve as 
        information clearinghouses to aid rural communities.

   Establish policies that incentivize use of disturbed sites 
        first, as well as rooftop, parking lot, and building-integrated 
        solar facilities in all locations--rural and urban--first 
        instead of green locations. Do not put rural areas in the 
        position of having to supply all renewable energy to urban and 
        suburban areas.

   Provide funding to support farmland protection. Without 
        farms, we will not be able to have farm-related biodigesters.

    Thank you for the opportunity to provide these answers for the 
record.
Response from Randy Aberle, Executive Vice President of Agribusiness 
        and Capital Markets, AgCountry Farm Credit Services
    Question. Renewable natural gas (RNG) is a renewable fuel source 
driving huge clean energy investments in rural America. Turning 
agricultural waste into renewable natural gas (RNG) is a win-win for 
farms: it generates an additional source of income and also mitigates 
the methane emissions from livestock manure. The process of building 
digesters and processing biogas, however, can be a daunting endeavor.
    Companies like Clean Energy Fuels, based in California, invest 
millions in dairy farms throughout the state, providing needed capital 
investments and guidance for farms as they install anaerobic digesters 
for capturing RNG for use in transportation.
    Mr. Aberle, how do you think the Federal Government can continue to 
incentivize private investment in this digester technology in the rural 
communities where your organization operates?
    Answer. January 28, 2022

    To the Honorable Rep. Correa,

    AgCountry Farm Credit Services and the Farm Credit System support 
private investment in digester technology to capture renewable biogas 
by financing eligible borrowers investing in this technology. Please 
see the linked published articles below:

          https://farmcredit.com/story/dairy-goes-green-california
          http://biomassmagazine.com/articles/17805/amp-americas-
        brings-minnesota-rng-project-online

    AgCountry and the Farm Credit System understand the value of this 
renewable energy source that reduces methane gas emissions from 
livestock manure. Consumers and businesses can utilize this renewable 
source of energy to heat their homes and run their businesses. Many of 
these private digester technology providers do not meet the eligibility 
and scope for Farm Credit System financing, which is subject to 
constraints around ownership structure and requirements for owners to 
have some feedstock throughput to the project.
    From a Lender's perspective, the Federal Government could encourage 
more private investment in this industry by:

  1.  Broadening and modernizing the eligibility authorities and scope 
            of financing so AgCountry and the Farm Credit System could 
            provide financing to credit worthy rural entrepreneurs to 
            make these technology investments in rural America.

  2.  Providing direct grants and/or tax credits directly to both the 
            digester technology providers and the agricultural 
            producers providing the manure. This would encourage more 
            investment in this technology and more ag producers willing 
            to consider digester projects.

  3.  Providing 100% loan guarantees for lenders to finance the 
            construction and installation of the digester projects. 
            Most of these installations are large projects and do not 
            fit the Guaranteed Loans and Grants under the Rural Energy 
            for America Programs for Renewable Energy Systems (REAP). 
            Increased government loan guarantee levels would allow 
            entrepreneurs' private investment dollars to be leveraged 
            with lender funds with limited lender risk.

    The Federal Government should continue to support and incentivize 
private investment in renewable energy in rural communities through 
USDA and other bioenergy programs. These Federal incentives supplement 
the private investment to accelerate the renewable energy 
infrastructure build-out for the benefit of agriculture, rural America 
and the environment. The government support of these projects provides 
a better foundation towards a successful bioenergy project.
    Please reach out directly with any additional questions. Thank you 
for the opportunity to respond.
            Sincerely,

Randy Aberle,
EVP Agribusiness and Capital Markets.
                              attachment 1




[https://farmcredit.com/story/dairy-goes-green-california]
Dairy Goes Green in California
Southern San Joaquin Valley, California
          Farm Credit West \1\ supports the dairy industry, the 
        environment and local communities by financing a methane 
        converter project in California.
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    \1\ https://www.farmcreditwest.com/.

    In less than a decade, California's dairy industry--the nation's 
leader in milk production and the state's largest agricultural 
commodity-faces a daunting requirement: reduce greenhouse gas emissions 
from manure storage by 40 percent. Considering the industry's 1.7 
million dairy cows are the state's largest agricultural methane 
producer, it's an imposing task to accomplish by 2030--but given the 
economic stakes, a crucial one.
Farm Credit: financing the future
    Deeply committed to its customers, Farm Credit West has taken bold 
action and become the principle financier of a solution to this 
challenge. It's a solution that simultaneously helps dairy producers 
reduce their emissions and meet the state mandate, while also providing 
cleaner air and economic vitality to some of California's most under-
served areas.
    Farm Credit West has partnered with California Bioenergy (CalBio), 
a dairy digester developer, Chevron U.S.A. and California dairy farmers 
to build three clusters of methane digesters and upgraders across 
California's southern Central Valley.
    The digesters and upgraders, built by CalBio, repurpose methane 
released from dairy manure by first capturing, then converting it to 
renewable natural gas (RNG). The methane captured in digesters at the 
dairy farms is sent to a centralized processing facility where it is 
upgraded to RNG and injected into local utility SoCalGas and PG&E's 
pipelines. The RNG is then marketed as an alternative fuel for heavy-
duty trucks and buses, many of which regularly travel the Central 
Valley corridor.
A win-win-win
    Farm Credit West's plan moving forward comprises 17 digester sites 
in three different clusters across Kern, Tulare and Kings counties. 
Dairy owners provide the manure and the site on which to build the 
digester. The farmers then receive a percentage of the profits from the 
sale of RNG, as well as renewable energy credits from California's cap-
and-trade energy market and the National Renewable Fuel Standards 
program.
    In addition to providing an elegant solution to the dairy 
industry's looming emissions-reduction mandate, this project attracts 
numerous construction and engineering jobs to the state's Central 
Valley, an area that struggles with high rates of poverty and 
joblessness.
    Farm Credit West Senior Vice President Jonathan Kennedy has been 
working on the project for more than a year. He describes it a win-win-
win for California.
    ``This project is good for all the stakeholders involved,'' 
Jonathan said. ``Cleaner air benefits not just agriculture, but the 
whole community. In terms of the dairy industry, it provides additional 
viable income. And the communities where these will be built-some are 
the most impoverished in the state--will benefit from well paid, stable 
jobs.''
Farm Credit stepped up to the challenge
    Jonathan, who has worked for Farm Credit West for 31 years, says 
the deal was the most complex he'd ever worked on. Since they had never 
financed a digester project this large, the underwriting process 
involved numerous meetings with attorneys and real estate 
professionals; drawing up land leases and pipeline easements; drafting 
agreements between dairy farmers and CalBio; and determining the value 
of fuel and how it will be paid for, among other steps.
    In the end, Farm Credit West's history of supporting local 
producers and experience with the dairy sector made the decision to 
finance a forward-thinking project with numerous benefits to the dairy 
industry, the environment and community an easy one.
    ``Our commitment to agriculture and to the dairy industry in all of 
California, and also the personal relationships we have with dairy 
producers, made it clear this is something we needed to be a part of,'' 
Jonathan said. ``Other banks may not have looked at it from that 
perspective.''
    The project is owned by individual dairy farmers, Chevron, and 
California Bioenergy, LLC, whom all contributed significant equity. 
Farm Credit West, in conjunction with CoBank, provided $50 million in 
loan funding. Additional agencies provided support and capital too, 
including the California Air Resource Control Board, the California 
Department of Food and Agriculture, the California Energy Commission, 
the California Public Utilities Commission and the Natural Resources 
Conservation Service.
A perfect fit for Farm Credit's mission
    Farm Credit West President and CEO Mark Littlefield echoed 
Jonathan's sentiments. In a video recorded for a virtual ribbon cutting 
in September 2020, Mark said providing the economic engine for this 
project fulfills Farm Credit West's mission to support agricultural 
producers and the communities they serve.
    ``The California Bioenergy project allows our customers to meet 
their business goals, strengthens rural economies, improves local air 
quality and contributes to a healthy, sustainable future,'' Mark said. 
``For more than a century, Farm Credit West has supported rural 
communities and agriculture with consistent, reliable credit and 
financial services. As a member-owned cooperative, we are intimately 
connected to the pressures and opportunities facing dairy producers 
today, and it is our mission to develop unique solutions to help these 
growers thrive. We've been adapting and innovating with our customer-
owners for the last one hundred years; we won't stop now.''

          A version of this article first appeared in Farm Credit 
        West's Spotlight Magazine,\2\ titled, ``Financing the Future,'' 
        by Sarah Kearbey.
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    \2\ https://issuu.com/farmcreditwest/docs/
fcw_spotlight_winter_2020_web.
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                              attachment 2


          http://biomassmagazine.com/articles/17805/amp-americas-
        brings-minnesota-rng-project-online
Amp Americas brings Minnesota RNG project online
By Amp Americas D March 16, 2021


          Amp Americas on March 10 announced that its fourth biogas 
        facility producing renewable natural gas (RNG) from dairy waste 
        is now operational and delivering RNG to the pipeline. The 
        facility is located in Morris, Minnesota. Source: Amp Americas.

    Amp Americas, a pioneer in the renewable transportation fuel 
industry, on March 10 announced that its fourth biogas facility 
producing renewable natural gas (RNG) from dairy waste is now 
operational and has begun delivering RNG into the Alliance natural gas 
pipeline to be used as transportation fuel. Located in Morris, 
Minnesota near the state's western border, the new plant is Amp 
Americas' largest dairy RNG project to date and the state's first on-
farm biogas-to-vehicle fuel facility. With this project, Amp Americas 
has now developed dairy RNG production on 12 dairies with over 66,000 
cows.
    Working with Riverview LLP, a dairy operation based in Minnesota, 
the project captures over 700,000 gallons of manure per day from three 
different sites, converts it into renewable methane, purifies it into 
RNG, and compresses it to inject into the pipeline. Along with two RNG 
projects in Indiana and another in Arizona, Amp Americas is now 
operating four of the largest dairy biogas-to-transportation fuel 
projects in the country, producing a total of over 10 million gallons 
of RNG annually. Amp Americas markets its dairy RNG to fleets in 
California along with gas from a number of other dairy, landfill, and 
wastewater projects developed by others through its Amp Americas 
Marketing arm.
    ``We're thrilled to partner with Riverview and to launch our 
largest project to date,'' said Grant Zimmerman, CEO of Amp Americas. 
``We installed pipelines connecting three of Riverview's dairies, 
restarted mothballed digesters, and built our RNG plant and the 
pipeline injection station. This project will produce millions of 
gallons of 100% renewable transportation fuel and will prevent 100,000 
tons of greenhouse emissions each year, the equivalent of taking over 
20,000 cars off the road annually.''
    Brad Fehr, partner of Riverview LLP explained, ``We were skeptical 
of digester projects and developers before we decided to work with Amp 
Americas. They built an important project for our community, and we 
look forward to our long-term partnership.''
    During construction, the project employed 140 people, and now in 
operations, Amp Americas has added six permanent full-time jobs in 
Morris, Minnesota bringing the company's team to a total of 60 across 
six states. Amp Americas will operate the Riverview RNG facilities 
under its Amp Americas Services business, a unit of Amp Americas that 
leverages its 9 years of unique experience, expertise, and leadership 
in biogas operations. Amp Services also operates other dairy RNG 
projects such as the company's Indiana projects now owned by Generate 
Capital, and another dairy RNG project located in Arizona.
    Amp Americas recently expanded its ongoing relationship with EIV 
Capital, LLC, to provide the required equity investment needed for 
continued buildout of the business. David Finan, partner of EIV 
Capital, LLC stated, ``Amp's growing platform provides true value to 
the communities in which it operates and also to its employees and 
investors. We are grateful to work with a team that can leverage its 
decade-plus experience of continuous operations in the dairy RNG space 
to build a leading business in the development and management of these 
assets.''