Regulation of Industrial Use of Algae or Cyanobacteria in the United States (Part 2)

Introduction

This blog entry describes the possible ways in which uses of algae or cyanobacteria for fuel or chemical production might be regulated in the United States. This entry is one of several posts that provide additional information in support of a poster I’m presenting at the 2013 Algae Biomass Summit on the regulations in various countries around the world that may be applicable to the use of naturally-occurring or genetically modified algae or cyanobacteria in fuel production. These include three general categories of regulation: biotechnology or biosafety regulations, aquaculture regulations, and renewable fuel standards or volume mandates. You can access the poster on my SlideShare site, and please refer back to my September 16 introductory post for links to posts on the regulatory situation in other countries. Although this discussion centers on algae and cyanobacteria, much of the discussion (other than the section on aquaculture) would be applicable to the use of other genetically modified microorganisms for production of fuel or chemicals.

The discussion of the situation in the U.S. is in two parts. This blog entry discusses aquaculture and renewable fuels regulations, and the previous entry discussed biotechnology regulations.

Aquaculture Regulation

The following is a brief summary of aquaculture regulations in the United States  and how they may apply to industrial uses of algae or cyanobacteria. This is necessarily a very brief overview, meant to convey general guidance as to what applicants might expect in the country. More detailed information is available at the websites linked below, particularly including the very useful Fact Sheets maintained for individual countries by the U.N. Food and Agriculture Organization (FAO), which can all be accessed at http://www.fao.org/fishery/nalo/search/en.

Aquaculture in the United States is regulated both by federal and state laws. Although there are federal regulations directly relevant to aquaculture, as well as other federal statutes that might come into play depending on the end use of the aquaculture activity (e.g. covering food use of farmed fish), it is likely that proposed uses of algae for fuel or chemical production would be covered by state regulation, and only then in specific states having applicable laws. In addition, there are numerous federal and state regulations affecting different aspects of traditional aquaculture, such as pollution prevention laws affecting wastewater discharges into or out of aquaculture facilities. I won’t discuss any such regulations here, and my focus will be only on those laws or regulations directly relevant to the organisms used in aquaculture, as they might impact uses of algae.

At the federal level, the applicable law is the National Aquaculture Act of 1980, which was enacted to is intended to promote the development of private aquaculture while also ensuring coordination among those federal agencies that maintained aquaculture programs and policies at the time of its enactment. The law also called for the government to develop a national aquaculture policy. However, this law does not appear to be applicable to algae. The law defines “aquaculture” as “the propagation and rearing of aquatic species in controlled or selected environments …”, and defines “aquatic species” as any species of finfish, mollusk, crustacean, or other aquatic invertebrate, amphibian, reptile, or aquatic plant”. It is not clear if “aquatic plant” would be considered to include marine algae, but in any event, it does not appear that any binding regulations were ever issued pursuant to this law that would establish permitting requirements that would affect facilities using algae for fuel or chemical production (or for that matter, any aquaculture facility).

The following are only a few examples of states having aquaculture regulations that establish permitting requirements that may affect proposed uses of marine algae or cyanobacteria for industrial purposes. A more exhaustive survey of state requirements would be well beyond the scope of this blog entry.

Florida. Under the Florida Aquaculture Policy Act, the Division of Aquaculture of the state’s Department of Agriculture and Consumer Services has regulatory responsibility over aquaculture. This Act defines aquaculture as “the cultivation of aquatic organisms” without further elaboration. Under the Act, the Division of Aquaculture issues certificates of registration for aquculture activities. While this regulation does not seem burdensome, uses of algae and cyanobacteria are also potentially covered under Florida’s “invasive plantings” regulations that I have described in a previous blog post. However, algae or cyanobacteria can be exempted from the invasive plantings regulations if the proposed use is carried out in accordance with best management practices for aquaculture that have been issued by the Division of Aquaculture.

Illinois. Illinois maintains a regulatory structure for aquaculture regulatory that is based on specific sections of its laws and administrative codes and which is administered bythe Illinois Department of Natural Resources. Of these, the two most relevant are Chapter 515, the Illinois Fish and Aquatic Life Code, and Administrative Code 870, “Aquaculture, Transportation, Stocking, Importation, and/or Possession of Aquatic Life.” Chapter 515 defines aquatic life as “fish, reptiles, amphibians, crayfish, mussels, mollusks, crustaceans, algae, aquatic plants and invertebrates,” and this law covers the release of aquatic life to the natural environment, while also specifying permit requirements for the aquaculture industry. Administrative Code 870 addresses the approved aquatic species, the requirements for permit applications, facility requirements, operational rules, and penalties and exceptions. A valuable source of information on these requirements (along with the text of Administrative Code 870) is the Illinois Aquaculture Biosecurity Manual, issued in 2010.

California. The FAO information page for the United States includes a great deal of information about California’s aquaculture regulations, as an example of how these activities are regulated by the state. According to this site, the applicable regulations are the California Fish and Game Code, which defines aquaculture as a form of agriculture, “devoted to the propagation, cultivation, maintenance, and harvesting of aquatic plants and animals in marine, brackish, and freshwater,” and the California Public Resource Code, which defines aquaculture as “the culture and husbandry of aquatic organisms, including, but not limited to, fish, shellfish, molluscs, crustaceans, kelp, and algae.” Permits for aquaculture activities must be obtained from the  California Department of Fish and Game, a division of the California Resource Agency.

Fuels Regulation

I have described various aspects of U.S. renewable fuel regulation in several earlier posts on this blog (e.g. fuel certification requirements and the U.S. Renewable Fuel Standard), so this discussion will summarize some of the key points.

Any fuel or fuel additive that is to be sold commercially in the U.S. must first be registered with EPA under regulations specified in 40 CFR Part 79. This is required of all fuels or additives and is over and above what may be required under other federal laws (e.g. qualification as a renewable fuel under the Renewable Fuel Standards). Note that aviation fuels, as well as all fuels to be sold to military branches must follow a different, but equivalent path, that I have described in earlier entries. Although the EPA approval process for civilian motor vehicle fuels can be quite straightforward for fuels or additives that are chemically identical to existing fuels, generally speaking the pathways for aviation fuels and for the military branches will require considerably more testing.

Generally, these regulatory regimes involve oversight over at least three distinct components. These are fuel composition (chemical make-up and physical/chemical properties); engine suitability and performance testing; and health effects of the emissions from fuel combustion. A fourth criteria which comes into play for novel aviation fuels is a consideration of the production pathway used to create the fuel, to ensure consistency and quality of the manufactured fuel product. Fuel composition and properties are often ascertained through the use of standard testing protocols to confirm that the fuel meets the accepted specification. Both the standards and the test protocols are often those certified by ASTM International or the equivalent standards issued by military branches or other international organizations. Engine testing may not be required in all cases, especially where the fuel has been shown to meet the applicable chemical specifications so as to be identical to a previously approved fuel, but where it is required the needed testing is often extensive. Similarly, assessment of health effects of emissions may be required under certain laws such as the U.S. Clean Air Act, but these requirements may be waived for fuels whose composition is identical to fuels currently on the market.

Ethanol has historically been registered as a gasoline additive (i.e., originally as an oxygenate), and so all U.S. manufacturers of fuel ethanol have had their products approved by EPA as a fuel additive. This process is fairly straightforward, with a short turn-around time at EPA, although there are some additional procedures required to gain approval to have the manufacturer’s ethanol blended with gasoline above 10%. The registration process for biodiesel and other renewably-produced diesel or gasoline can involve a greater amount of testing, although some of these requirements are relaxed for small business entities. See my earlier blog for more details.

In order to gain the full economic and marketing advantages available for renewable fuels in the U.S., it is necessary for manufacturers to ensure that their fuels and production processes are in compliance with the Renewable Fuel Standard (RFS). Several earlier blog posts have described the RFS in detail, and so this will be just a brief summary.The RFS is a nationwide program, first enacted in 2005 (amended in 2007) to require increasing use of renewable fuels by 2022. The RFS is administered by the U.S. EPA under statutory authority of the Energy Policy Act of 2005, as amended by the Energy Independence and Security Act (EISA) of 2007 (because of this amended legislative authority, the current version of the law is sometimes referred to as RFS2). EPA has issued regulations to implement this law, which can be found at 40 CFR Part 80 (first published in the March 26, 2010 Federal Register).

The goal of the RFS is to directly support U.S. renewable fuels production by providing a mandatory market for qualifying fuels—fuel blenders must incorporate minimum volumes of renewable fuels in their annual transportation fuel sales. By guaranteeing a market for biofuels that is largely independent of pricing and fuel costs, RFS2 was intended to reduce the risk associated with biofuels production, and to provide an indirect subsidy for capital investment in the construction of biofuels plants.

RFS2 establishes four categories of renewable fuels and sets yearly minimum volumes for each category. Certain fuels were placed into specific categories, while fuels produced through production pathways not specified in the original law or regulations will generally need to go through a petition process in order to be qualified into one of the four categories. I’ll discuss the approved pathways and discuss how the petition process works in a subsequent blog entry. Producers of fuels qualifying for any of the four categories can issue Renewable Identification Numbers (RINs) for the fuels they produce. RINs are tradable on open markets and thus provide tangible economic value to fuel manufacturers.

However, fuel pathways not included within the original regulations must be reviewed and approved by EPA to be considered as renewable fuels under the RFS. In a previous entry, I have described in detail the petition process by which companies can propose that their fuel pathways be covered under the RFS, and how EPA makes these determinations. Instructions and guidance for filing these petitions are available on EPA’s website. EPA uses these petitions to determine whether or not the fuel is produced from feedstock(s) that qualify as “renewable” under the law’s definitions, and whether production of the fuel will meet the applicable threshold levels of greenhouse gas (GHG) emission reductions (20% for “renewable fuels”, 50% for “advanced biofuels” or “renewable biodiesel”, or 60% for “cellulosic biofuels”). EPA does this by conducting its own Life Cycle Analysis (LCA), using its preferred mathematical modeling based on information supplied by the applicant.

The portion of the regulations which lists all the approved fuels and pathways, and the information needed to generate Renewable Identification Numbers (RINs) for each fuel, is found in Part 80.1426 and is called  “Table 1 To § 80.1426—Applicable D Codes for Each Fuel Pathway for Use in Generating RINs.” This table, which can be found here,  lists for each applicable fuel, the fuel type (e.g. diesel, ethanol, etc.), the feedstock from which it is produced (e.g. corn starch, soybean oil, etc.), production process requirements (if any), and also the “D Code” which identifies the type of fuel in the RINs that each producer is entitled to generate. From time to time, after undergoing a formal rulemaking process, EPA may add generic pathways to this Table. The most recent is the decision that certain processes using grain sorghum to produce ethanol qualified either as an “advanced biofuel” or a “renewable fuel” under the regulations.

EPA created a process by which producers of renewable fuels can apply to have new pathways certified. This is done by the filing of petitions with the EPA Office of Transportation and Air Quality.

In addition to detailed information on the pathway, the proposed feedstock (described in my prior posts and on the EPA website), and estimates of the mass balance and energy balance of the process, EPA also asks that petition demonstrate the technical and commercial feasibility of the proposed pathway. The website suggests that, to do this, petitions could include copies of applications for air or construction permits, copies of blueprints of the facility, or photographs of the facility or a pilot plant. This information will help EPA prioritize action on the petition, since it is EPA’s intent to address on a priority basis petitions for products that are closest to actual production.

In practice,  applicants have a fair amount of leeway in how to provide the requested information and its supporting documentation. EPA has developed Excel spreadsheets which applicants are requested to use to report to the mass balance and energy balance information for the petition, as well as certain information about the source and production of the renewable feedstock. As is always the case in regulatory interactions, it is advisable to have presubmission meetings with agency staff to help in the preparation of petitions and the information that is needed to be included. In my experience in working with EPA to develop a petition under the RFS.

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory affairs support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ regulatory affairs consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Biofuel Policy Watch.

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