EPA Proposed RFS Changes + Impact on VC Investments and Partnerships
In November 2013, the US Environmental Protection Agency (EPA) issued a volumetric reduction proposal for renewable fuels under the agency’s Renewable Fuel Standards (RFS) for 2014. Specifically, EPA has proposed to reduce the mandate for cellulosic biofuel from 1.75 billion gallons to 17 million gallons. The agency cited two main reasons for the drastic reduction for 2014 (click here to view EPA’s official announcement):
- Limitations in the volume of ethanol that can be blended into existing gasoline supply (currently capped at 10%), especially as new vehicles have increasing fuel efficiencies, which reduces overall liquid fuel demand.
- Technological limitations from the industry to produce sufficient volumes of renewable fuels.
Despite the announcement of the proposed policy amendment, we saw multiple events occur in the Biofuels & Biochemicals sector, predominantly in two major areas:
- Scale-up efforts: Amyris, the California-based developer of a synthetic biofuel platform, formed a joint venture with Total Energy to commercialize renewable fuels from Amyris’ technology platform.
- Shift towards biochemicals: Greenlight Biosciences, the Massachusetts-based develop of sustainable chemicals, received a follow-on Series A investment of $1 million from Khosla Ventures and Kodiak Venture Partners.
You can download our latest Biofuels & Biochemicals sector trend report for free.
EPA’s proposed change to the RFS for 2014 is currently undergoing a 60-day commenting period, and the agency is expected to make an announcement soon in the new year. What do you think the proposal, if passed, would affect the various stakeholders in this industry? Let us know on twitter @cleantechgroup your thoughts on the RFS and its impending impact on investments and partnerships for developing biofuels companies!