The Future of Biofuels: Environmental Innovation Fatigue for Environmental Advances?

The federal government has set bold and challenging goals for future increases in the production of energy from non-fossil fuel sources. Seeking to curb our dependence on foreign oil as well as fossil fuels in general, our nation is encouraging the development of fuels from biological sources. Biofuels, diesel and gasoline made from renewable sources such as agricultural waste, forest sources, and algae, are a top priority and are the subject of extensive government-funded research and tax credits. Biofuels are a rich source of innovation and show an explosion in patent activity in the past 3 years.

Unfortunately, biofuels are also facing daunting challenges from uncertainty in federal regulations and tax policy that threatens to bring many innovations to a halt as industry puts many developments on hold due. The uncertainty in the environment–the regulatory and tax environment created by the government–is actually hindering many biofuel projects aimed aimed at enhancing the environment in the long run. This was the sentiment from several speakers in the midst of biofuels innovation in sessions at BioPro Expo 2011, a major conference on biofuels and forest bioproducts, being held in Atlanta, Georgia, March 14-16. Concern about government barriers to commercialization of biofuels advances was a repeated theme.

One example is federal regarding the definition of “renewable” for those seeking federal incentives for the use of renewable sources of fuels. Municipal solid waste (MSW) has a large component of plant-based materials such as paper and food waste, and is one of the most available and commercially attractive biofuel sources. The technology is proven, the raw material is available and economically feasible, and projects are ready to roll–except they have largely been put on hold until the federal government rules on whether MSW can be counted as “renewable” or not. Then there are strict new rules on boiler operation (the Industrial Boiler Maximum Achievable Technology, or BI MACT, rule) throwing another wrench and major cost burden on the backs of those with boilers generating energy from biomass sources. There are a host of other rules and conflicting definitions and policies adding to uncertainty, risk, and cost in commercializing biofuels. For the innovator, it is a challenging era with the potential of innovation fatigue from external or environmental factors.

Let’s hope that the rich opportunities being uncovered in biofuels can be commercialized rapidly and that the barriers to innovation can be reduced.

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