ICYMI: The Biobased Economy After Trump

ICYMI: The Biobased Economy After Trump

Brent Erickson, Executive Vice President of the Industrial and Environmental Section at BIO, recently contributed a piece to Biofuels Digest which looks at what the new Administration and Congress may have in store for the industrial biotech industry. In his piece, Erickson argues that the Federal government may want to take a look at the states first before enacting certain policies to help grow the biobased economy. A brief blurb from his piece, The Biobased Economy after Trump: the States May Lead the Way, can be found below:

Some of those initiatives may touch the biobased economy but only at the margins. Renewable chemical and biofuel producer CEOs, who make business decisions with a longer time horizon, can gain more certainty by looking at state policies. In the absence of federal activity early in 2017, state initiatives will continue to provide some stable policy and to lead in creating the right business climate to support emerging technologies and businesses that create jobs.

The clues from the Trump administration on the federal Renewable Fuel Standard (RFS) are generally positive; the recent rule on the 2017 RVOs are also a positive sign. Trump articulated his support for biofuels on the campaign trail …The new administration should have no sympathy for Carl Icahn’s campaign to change the point of obligation for merchant refiners, because it would create new and unwelcome uncertainty about the future of the RFS. But the jury is still out on how Trump will handle this position by his longtime supporter Icahn.

The incoming Trump administration is expected to at least partially unravel the presidential directives and regulatory rules of the past eight years that aimed at reducing carbon emissions throughout our economy. But many businesses have already made large investments to adopt low carbon technologies, energy efficiency, and cleaner production processes…Many states have adopted market-based policy portfolios that encourage carbon reduction in transportation fuels and energy. California’s Low Carbon Fuel Standard, established a decade ago, served as a model for Oregon’s. Eleven states in the Northeast are discussing similar region wide legislation. States can continue to lead in creating policies to support businesses that use renewable energy and renewable resources in manufacturing.

One of Donald Trump’s key campaign pledges is to redress trade imbalances in order to preserve U.S. manufacturing. Biobased production can revitalize U.S. manufacturing, generate jobs and economic growth and provide new markets for U.S. agriculture. But there is an imbalance that needs to be rectified. Countries such as China, Malaysia and Brazil have for years offered tax credits to attract construction of biorefineries. Technology researched and developed in the United States is being commercialized overseas because the United States does not offer a competitive tax credit to this industry. Iowa and Minnesota have recognized the need to compete for biobased manufacturing jobs and have been forward leaning in enacting tax credits for biorefineries and biobased products.

In 2015, Minnesota passed the Bioeconomy Production Incentive Program, which is enabling the commercial scale-up of advanced biofuel, renewable chemical, and biomass thermal production in Minnesota using the state’s agricultural and forestry resources. In 2016, BIO worked closely with IowaBIO and the Iowa Economic Development Authority in helping the State of Iowa develop and enact a new five-year production tax credit for renewable chemicals. Nebraska’s biorefining industry is promoting similar policies in that state…

Donald Trump vowed during the campaign to renew economic growth in the United States. That will require innovative technologies and a highly educated workforce. Here again, states have been leading the way. Florida, North Carolina, Pennsylvania, Wisconsin, Ohio and numerous other states support research, development and education in the biosciences. Nationwide, 1.53 million Americans are employed in biobased product manufacturing, and the industry generates $127 billion in economic activity. The industry’s impact creates an additional 2.7 million employment opportunities…

The incoming Trump administration should recognize that its federal agenda works hand-in-glove with the state level efforts to support emerging technologies and businesses and do what it can to help them. Companies that have been building the biobased economy and those starting up to commercialize innovative technology can look to the states for the stable, supportive policies that create the environment needed for them to succeed. States can continue to take the lead in adopting local policies that create the right economic environment for the biobased economy to grow while the new Trump administration gets it sea legs.

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