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Q&A

Biofuels Group Says Trump Has Industry In Standstill

A conversation with Geoff Cooper, head of the Renewable Fuels Association

Geoff Cooper
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Today’s conversation is with Geoff Cooper, head of the Renewable Fuels Association, the most powerful biofuels trade organization in D.C. And he’s not happy.

In Cooper’s view, the Biden administration left the IRA’s tax credit supporting lower-carbon jet fuel unfinished despite releasing guidance days before Trump entered office (here’s an explainer on that problem). Not to mention the chaos of Trump’s early days has, as Cooper put it, thrown the brakes on the American biofuels sector’s foray into aviation. Cooper and I have a history going back years, and almost a month into Trump 2.0, I thought it was time we had a chat about how solar and wind aren’t the only sectors left out in the cold right now.

The following conversation was lightly edited and abridged for clarity.

We’ve been telling our readers what’s happening in the renewable energy space under Trump. But what’s happening in the renewable fuels space?

I think what we’re seeing right now is lots of businesses hitting the pause button and waiting for more certainty, waiting for more clarity on where everything is headed. There is, of course, always uncertainty and unpredictability at the beginning of any new administration. But this one in particular there has been more than usual because we were sort of in the middle of getting rules finalized on some of those key tax credits from the Inflation Reduction Act. We had good clarity, and I’d say understanding of where some of those programs were going, like 45Q, but on others like 45Z, literally, it was the last week of the Biden administration that we began to see the necessary pieces of that program we’d been waiting on, and what the administration put out was incomplete and unfinished, so now it falls to the Trump administration to decide whether and how to move forward with that. So all of that uncertainty and confusion and the timing of all of that has resulted in many companies in the renewable fuels space just calling a time out on any investment plans and strategies that they have been considering to lower carbon intensity. I think there’s a real hesitancy to dive head first into some of those investments right now when it just isn’t clear where the bottom is.

What do you mean by a pause on investment? Can you give some examples?

Under 45Z and under the initial modeling the Biden administration put out in early January, I’d say probably three-quarters of the ethanol industry is just barely on the outside of generating 45Z credit, so the carbon intensity of their ethanol is just above that threshold that would be required to generate that credit on the low end of that scale.

There are a number of technologies that producers could adopt to get them on the other side of that threshold into the position where they can begin claiming some value from 45Z — combined heat and power, installing wind or solar behind the meter at these facilities so they can enjoy the benefit of renewable electricity, using biogas in lieu of natural gas. These are all things most producers were considering, and had in some cases had deals ready to go and projects ready to go. But they’re on hold now because again, nobody’s quite sure what the future looks like for 45Z.

Are any companies saying this out loud, or is this mostly private board room chatter?

This is mostly internal conversations during board meetings and other meetings we’ve had as an association. But there have been public statements.

Is the uncertainty surrounding government funding also a factor here?

It has been. If you look at USDA — for example, the [Rural Energy for America Program] REAP program — funding was paused for that program. And it isn’t just for on-farm renewable projects. There’s some ethanol plants that had successfully applied and received commitments for REAP funding for projects they were doing and that’s been put on hold. More broadly, things have slowed down in terms of making investments and commitments to efficiency and lower carbon intensity in the industry as a result of just the broader freeze and slowdown on all of these programs at the federal level.

And again, you expect some of that is going to occur any time there’s a new administration and you go through a transition like this. But this one has been, I would say, particularly acute so far.

Do you believe that given his history supporting biofuel infrastructure in North Dakota as governor, Interior Secretary Doug Burgum will be more deferential to your members when it comes to permitting?

I should say the industry is confident that everything that’s paused right now — or, not everything, but a lot of the important programs that have been frozen or paused right now — will eventually be unstuck and the door will open back up. Certainly we see carbon capture and sequestration projects in that way, permitting for those projects. Obviously there’s a couple of carbon pipeline projects that we do expect will move forward, and the 45Q tax credit seems to be on firmer ground than 45Z at this moment. So we do expect that those things will move forward.

It’s just a matter of how long things are delayed and how long things are frozen as the new administration is reviewing things and formulating their own strategy and plans for how they want to move forward.

Do you have any idea how that’ll shake out?

I don’t think there is any indication of how it’ll shake out at this point.

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Hotspots

Judge, Siding With Trump, Saves Solar From NEPA

And more on the week’s biggest conflicts around renewable energy projects.

The United States.
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1. Jackson County, Kansas – A judge has rejected a Hail Mary lawsuit to kill a single solar farm over it benefiting from the Inflation Reduction Act, siding with arguments from a somewhat unexpected source — the Trump administration’s Justice Department — which argued that projects qualifying for tax credits do not require federal environmental reviews.

  • We previously reported that this lawsuit filed by frustrated Kansans targeted implementation of the IRA when it first was filed in February. That was true then, but afterwards an amended complaint was filed that focused entirely on the solar farm at the heart of the case: NextEra’s Jeffrey Solar. The case focuses now on whether Jeffrey benefiting from IRA credits means it should’ve gotten reviewed under the National Environmental Policy Act.
  • Perhaps surprisingly to some, the Trump Justice Department argued against these NEPA reviews – a posture that jibes with the administration’s approach to streamlining the overall environmental analysis process but works in favor of companies using IRA credits.
  • In a ruling that came down on Tuesday, District Judge Holly Teeter ruled the landowners lacked standing to sue because “there is a mismatch between their environmental concerns tied to construction of the Jeffrey Solar Project and the tax credits and regulations,” and they did not “plausibly allege the substantial federal control and responsibility necessary to trigger NEPA review.”
  • “Plaintiffs’ claims, arguments, and requested relief have been difficult to analyze,” Teeter wrote in her opinion. “They are trying to use the procedural requirements of NEPA as a roadblock because they do not like what Congress has chosen to incentivize and what regulations Jackson County is considering. But those challenges must be made to the legislative branch, not to the judiciary.”

2. Portage County, Wisconsin – The largest solar project in the Badger State is now one step closer to construction after settling with environmentalists concerned about impacts to the Greater Prairie Chicken, an imperiled bird species beloved in wildlife conservation circles.

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Spotlight

Renewables Swept Up in Data Center Backlash

Just look at Virginia.

A data center.
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Solar and wind projects are getting swept up in the blowback to data center construction, presenting a risk to renewable energy companies who are hoping to ride the rise of AI in an otherwise difficult moment for the industry.

The American data center boom is going to demand an enormous amount of electricity and renewables developers believe much of it will come from solar and wind. But while these types of energy generation may be more easily constructed than, say, a fossil power plant, it doesn’t necessarily mean a connection to a data center will make a renewable project more popular. Not to mention data centers in rural areas face complaints that overlap with prominent arguments against solar and wind – like noise and impacts to water and farmland – which is leading to unfavorable outcomes for renewable energy developers more broadly when a community turns against a data center.

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Q&A

How the Wind Industry Can Fight Back

A conversation with Chris Moyer of Echo Communications

The Q&A subject.
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Today’s conversation is with Chris Moyer of Echo Communications, a D.C.-based communications firm that focuses on defending zero- and low-carbon energy and federal investments in climate action. Moyer, a veteran communications adviser who previously worked on Capitol Hill, has some hot takes as of late about how he believes industry and political leaders have in his view failed to properly rebut attacks on solar and wind energy, in addition to the Inflation Reduction Act. On Tuesday he sent an email blast out to his listserv – which I am on – that boldly declared: “The Wind Industry’s Strategy is Failing.”

Of course after getting that email, it shouldn’t surprise readers of The Fight to hear I had to understand what he meant by that, and share it with all of you. So here goes. The following conversation has been abridged and lightly edited for clarity.

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