Archive for February, 2008
The Hidden Costs of the Renewable Fuels Standard
The Hidden Costs of the Renewable Fuels Standard
Author: Clayton McMartin
From the February 2008 Ethanol Producer Magazine
Millions of dollars in operating capital are being wasted as the ethanol industry struggles to comply with the renewable fuels standard. A survey conducted during an Oct. 30 web conference attended by 234 industry stakeholders indicates that as many as 61 percent of renewable fuel suppliers are out of compliance.
Each of these facts are directly attributable to the requirements set forth in the RFS regulations requiring new documentation for product transfers throughout the renewable fuel supply chain. Many players have attempted to satisfy these requirements by modifying their existing production account systems, resulting in a short-term solution with long-term consequences.
Although the threat of $32,500-per-day fines for Clean Air Act violations is significant, even greater daily costs have come to bear upon the entire industry by those mixing business systems with regulatory compliance systems. Millions of dollars in extra operating capital are required for those who have adopted this ill-advised operating practice, which comes at a time when most in the biofuels business are experiencing painfully low profit margins. Read the rest of this entry »
Tags: Biodiesel, Biomass, Clayton, Compliance Report, Diesel, EPA, Ethanol, Ethanol-Producer Magazine, Fuel, Gasoline, Hidden Cost of Renewable Fuel, McMartin, Policy Act, Refueling America, Regulations, Renewable Fuel Credits, Renewable Fuel Registry, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN, RINSTAR