Thanks to POET's determined advocacy and steadfast support from our champions in the nation's capital and across the states, 2022 was an unprecedented success on the policy front, including a host of historic legislative and regulatory actions that will benefit biofuels for decades to come.
Inflation Reduction Act Incentives
The Inflation Reduction Act (IRA) marks the most significant policy framework and growth opportunity for biofuels since the creation of the Renewable Fuel Standard (RFS). POET worked with industry partners and policymakers for years to develop a selection of key incentives that were ultimately included in the IRA.
• The Clean Fuel Production Credit (45Z) will incentivize reductions in the carbon intensity of renewable fuel production up to $1 per gallon
• The credit for Carbon Capture Utilization and Sequestration (45Q) was also enhanced
• 40B will incentivize production of Sustainable Aviation Fuel
• $500 million was included for biofuel infrastructure
The IRA's combined biofuel incentives will drive new demand and investment, increase market access, and harness biofuels' enormous potential to rapidly decarbonize both transportation and agriculture.
Securing HBIIP and CARES Funding
Working alongside long-time biofuels champion Secretary Tom Vilsack and his team at USDA, POET helped secure $100 million in funding for the Higher Blends Infrastructure Incentive Program (HBIIP) to provide competitive grants for retailers and expand sales of higher biofuel blends. POET and industry partners also secured $700 million in direct payments, authorized under the Corona Virus Aid, Relief and Economic Security (CARES) Act, for biofuel producers adversely impacted by COVID-19 disruptions.
Emergency Waiver for Reid Vapor Pressure
The federal court decision reversing the Trump Administration's Reid Vapor Pressure (RVP) rule was a heavy blow to year-round E15. Undaunted, biofuels champions, including U.S. Senators John Thune (R-SD), Dick Durbin (D-IL), Debbie Stabenow (D-MI), Amy Klobuchar (D-MN), Tammy Baldwin (D-WI), Tammy Duckworth (D-IL), and U.S. Representatives Dusty Johnson (R-SD), Angie Craig (D-MN), Adrian Smith (R-NE), Cindy Axne (D-IA) and others worked across the aisle and with the Biden Administration to keep E15 flowing.
During a visit to POET Bioprocessing in Menlo, Iowa, President Biden announced an emergency RVP waiver that ensured access to E15 during the summer 2022 driving season and pledged his administration's continued support for biofuels. As the President stated in his remarks, "You cannot get to net zero in 2050 without biofuels."
2022 Renewable Volume Obligation
POET is proud to have helped lead the way in restoring integrity to the RFS. While EPA retroactively reduced the Renewable Volume Obligation (RVO) for 2020 and 2021, they also returned the 2022 RVO to 15 billion gallons for starch-based bioethanol and delivered the highest total RVO in the history of the RFS. In addition, the EPA rejected 63 pending Small Refinery Exemptions (SREs) and remanded 500 million gallons of additional blending over the next two years resulting from a federal court decision. The net result of the RVO rulemaking and elimination of SREs provide a position of strength for the industry as we move into the "Set" phase of the RFS in 2023.
Corn Kernel Fiber Bioethanol
Senator John Thune (R-SD) has been leading the charge for updated guidance from EPA on corn kernel fiber bioethanol. In September, EPA released new guidance providing pathways to accelerate stalled cellulosic fuel registrations. The EPA’s guidance represents an important path toward recognizing and accurately accounting for POET's fiber bioethanol production.
Iowa Passed Historic E15 Standard
In 2022, Governor Kim Reynolds (R-IA) signed the nation's first E15 standard into law. The bill, which passed the Iowa legislature with overwhelming bipartisan support, will guarantee access to E15 at retail locations across the state by 2026. POET Founder and CEO Jeff Broin said, "E15 is fueling freedom, and Iowa is leading the way by expanding market share for American-made biofuels that Russia and OPEC can never take away."
States Take a Stand for Year-Round Sales of E15
Last year, a bipartisan group of Midwest governors took a stand for cleaner fuels and year-round sales of E15 in their states. Governors Mike DeWine (R-OH), Tony Evers (D-WI), Kristi Noem (R-SD), JB Pritzker (D-IL), Kim Reynolds (R-IA), Pete Ricketts (R-NE), and Tim Walz (D-MN) exercised their authority under the Clean Air Act, to "provide relief, flexibility, and certainty in the fuel market." The governors' action will give E10 and E15 regulatory parity in their states and allow year-round sales of E15 starting in the summer of 2023.
Summary
2022 was a year of historic policy wins for the entire biofuels industry, and thanks are owed to all of our federal and state champions for their tremendous efforts. We also want to convey our deepest gratitude to POET team members and stakeholders for their support for POET PAC. Your contributions were pivotal to our success this year and will continue to play a critical role in 2023 and beyond.
