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Forget “Policy Reform”, “Messaging” Says Industry: Surprises Abound in the 2015 Bioeconomy Agenda Poll Results

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by Jim Lane (Biofuels Digest)  … Instead, you pointed to “bolt-ons”, “policy stability”, “financing”, “supply chain” and  “focusing on winners” as the advanced bioeconomy imperatives for 2015.

You’ve told us, in many communications, that the industry needs focus — and needs, specifically, to focus in on key areas for development

Seeking highly-feasible, high-impact strategies

Your top five strategies were:

Settling the controversy around the Renewable Fuel Standard (and comparable mechanisms)
Accelerating the development of sustainable, affordable, reliable, available feedstocks and their supply chains.
Focus on winning technologies
New structures for affordable project finance capital
Shift to bolt ons, incremental add-on

For impact, your top five were:

1. Settling the controversy around the Renewable Fuel Standard (and comparable mechanisms)
2. Policy reform
3. Delivering on promises
4. Accelerating the development of sustainable, affordable, reliable, available feedstocks and their supply chains.
5. (tie) Focus on winning technologies
5. (tie) New structures for affordable project finance capital

When it came to feasibility, you were less optimistic — your average rating was almost a full point behind the ratings for “impact” — and there were substantial differences in how you viewed potential strategies in terms of their feasibility, given today’s market conditions.

Your top five were:

1. Settling the controversy around the Renewable Fuel Standard (and comparable mechanisms)
2. Shift to bolt ons, incremental add-on
3. New, improved, or more widely-used tools for assessing technical readiness
4. New technologies or strategies to move past the E10 ethanol saturation point
5. Accelerating the development of sustainable, affordable, reliable, available feedstocks and their supply chains.

Your views are relentlessly practical — though not always well-aligned with trade associations, lobbyists, and policymakers.

1. You want less emphasis on developing pilots, or marginal technologies that require subsidies or long-term mandates, more on commercializing winners, pushing them “over the line”.

2. You want to settle the mandates controversy — seeing policy instability as an evil in itself. It is interesting that you placed so much less emphasis on overall “policy reform”, which you see as far less “feasible”. It suggests that you may, as an industry, be open to stability imposed by regulators, as opposed to the reform that generally requires legislation. But you see, for sure, “settling the controversy” as more important than “reform”.

3. You want to develop supply chains, now. You see developing feedstocks as more important than developing processing technologies, at this stage.

Solutions included the rise of intermediates, with one reader pointing to “technologies such as onsite sugar production near the biomass feedstocks, and biomass sugar concentration and rail transport by tank car. Make nonfood sugars a new commodity, shipped by rail. Creating a fungible, tradable intermediate like concentrated nonfood sugar syrup opens the field to normal commerce as seen in the food industry. Dunkin Donuts does not have wheat fields in their parking lots. They buy a standardized commodity: flour.”

4. You see creative project finance structures as critical to deployment. Having set “policy reforms” such as “master limited partnerships” on the back burner because of “feasibility” concerns, it may be that you see opportunities with loan guarantees and bonds, or direct investment by regional development funds. That could be an opportunity for states and communities, as well — similar to municipal and state bonds for infrastructure projects.

One reader wrote that an imperative was “improving industry wide financial sophistication’ while a third warned that “There is a ton of money sitting on the sidelines waiting for a global investment opportunities in the clean teach sector, but with the volatility in governmental policies and crude oil prices, we are going to be paralyzed for years unless we can change the way this industry is funded.

5. You see an imperative in shifting to more bolt-on, co-located, upgraded technologies, vs greenfield projects.   READ MORE


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