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November 2, 2012

BP Cancels Plans to Build Cellulosic Ethanol Plant in Florida

Lynn L. Bergeson

BP announced on October 25, 2012, that it canceled its plans to build a commercial-scale cellulosic ethanol plant in Highlands County, Florida, and would instead refocus its U.S. biofuels strategy on research and development and licensing its biofuels technology. BP states that when it announced its plans to build the facility, in 2008, it intended to turn “thousands of acres of energy crops into 36 million gallons per year of cellulosic ethanol.” BP intends to continue to invest in and operate its biofuels research facility in San Diego, California, and a demonstration plant in Jennings, Louisiana, to develop next generation cellulosic biofuel technologies and license them for commercial use.  Under the Energy Independence and Security Act of 2007, one billion gallons of cellulosic biofuel must be included in the U.S. fuel supply in 2013, and 16 billion gallons must be produced by 2022. The statute requires EPA to set the cellulosic biofuel standard each year based on the volume projected to be available during the following year, using Energy Information Administration projections and assessments of production capability from industry. For 2012, EPA projected there would be only 8.65 million gallons of cellulosic biofuel available, short of the 500 million gallons required. EPA has not yet set the standard for 2013.