Thus far, legislation pertaining to algae-based biofuels has not been introduced in the 113 th Congress. Among its advantages, algae has higher biomass yields per acre of cultivation than other feedstocks, leading to larger oil yields. In addition, ABB production could potentially use carbon dioxide from the flue gas of stationary sources (e.g., power plants), if ABB facilities are co-located with such facilities. Algae and the Renewable Fuel Standard

Many ABB discussions involve its limited eligibility for the RFS2—a mandate requiring that the national fuel supply contain a minimum amount of fuel produced from renewable biomass—compared to other biomass feedstocks. Although ABB is eligible to participate in the RFS2, it does not qualify as an eligible feedstock under the cellulosic biofuel subcategory because it is not defined as cellulosic in the RFS2 regulations. The RFS2 is composed of two biofuel categories: unspecified biofuel and advanced biofuels (or non-corn starch ethanol; see Figure 1 ). The cellulosic biofuels subcategory is ultimately the largest component of the RFS2. Its carve-out is set at 0.5 billion gallons for 2012 (roughly 3% of the RFS2) and ramps up to 16 billion gallons in 2022 (roughly 44% of the RFS2). The biomass-based diesel carve-out of the advanced biofuel category (the portion that algae-based biofuels do qualify for) had a 2013 mandate of 1.28 billion gallons, and EPA proposes a 2014 and 2015 mandate for the same amount. The biomass-based diesel volume for 2016 to 2022 has not been set and will be determined by the Environmental Protection Agency (EPA) in future rulemaking, but is to be no less than 1 billion gallons. Even with an RFS2 mandate and tax credits, cellulosic biofuels have yet to meet the required mandate. EPA reports that very few facilities are consistently producing cellulosic biofuels for commercial sale. As a result, the EPA lowered the 2010, 2011, 2012, and 2013 cellulosic biofuel mandates and proposes to lower the 2014 mandate. Some suggest that broadening the RFS2 to include algae as a cellulosic biofuel feedstock would boost production opportunities. Technical Background on Algae-Based Biofuel

Technology exists to convert algae (like any organic matter) into multiple forms of energy, including liquid fuels (e.g., diesel or jet fuel), electric power, and biogas. As a result, algae could potentially reuse CO 2 emitted as a waste product from stationary sources. Federal research and development funding for ABB has fluctuated over time. The Department of Energy (DOE) and the Department of Defense (DOD) are the two agencies that have spent the most money on ABB. The ARRA funding was spent on three algae-related integrated biorefinery (IBR) projects cost-shared with industry, two of which are at pilot scale (Algenol, with DOE's cost-share of $25 million and nearly $34 million in non-federal funding to construct an integrated pilot-scale biorefinery with the capacity to produce more than 100,000 gallons of fuel ethanol per year; and Solazyme, with $22 million in DOE cost-share and close to $4 million in non-federal funding to build, operate, and optimize a pilot-scale integrated biorefinery with the capacity to produce 300,000 gallons of purified algal oil per year) and one at demo scale (Sapphire, with $50 million in DOE cost-share and roughly $85 million in non-federal funding to construct an integrated algal biorefinery with the capacity to produce 1,000,000 gallons of jet fuel and diesel per year). While Congress has created a policy that mandates the use of alternative fuels for transportation (e.g., RFS2) and set up tax credits that support alternative fuel production, much of the legislation and tax provisions for alternative transportation fuel is constrained to a set of feedstock types (e.g., cellulosic) and fuel types as defined in the statute (e.g., ethanol, biodiesel). For example, in the past the American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240 ) amended both the cellulosic biofuel production tax credit and the cellulosic biofuel depreciation allowance to include algae-based biofuels. Both tax incentives expired at the end of 2013 and it is not known if the incentives will be extended. ABB advocates also assert that Congress could encourage the growth of the U.S. algae industry by providing tax parity with other biofuels, appropriating additional federal funds for algae-related programs, and modifying the RFS2 to be feedstock-neutral so that algae-based biofuels can be more broadly included. Congress did select certain feedstock types for biofuel production under the RFS2. In general, proposed legislation either would have expanded the cellulosic biofuels definition for the RFS2 to include algae by amending the Clean Air Act (codified as 42 U.S.C. ), and/or would have expanded the definition in the tax code for select tax incentives to incorporate algae—which Congress did with ATRA. H.R. The potential benefits of ABB include per-acre yields reported to be significantly larger than those for other biofuel feedstocks (e.g., soybean, jatropha), and the potential for algae to grow in water not traditionally used for other purposes. Federal support for ABB has occurred through general agency programs and specific projects. ABB is less developed than established biofuels industries such as corn-starch ethanol.
Congress continues to debate the federal role in biofuel research, biofuel tax incentives, and renewable fuel mandates. The debate touches on topics such as fuel imports and security, job creation, and environmental benefits, and is particularly significant for advanced biofuels, such as those produced by algae.
Congress established the Renewable Fuel Standard (RFS2), a mandate requiring that the national fuel supply contain a minimum amount of fuel produced from renewable biomass. The RFS2 is essentially composed of two biofuel mandates—one for unspecified biofuel, which is being met largely with corn-starch ethanol, and one for advanced biofuels (or non-corn starch ethanol), which may not be met in coming years due to a lack of production. Within the advanced biofuels category, the RFS2 requirements for the cellulosic biofuels subcategory (e.g., ethanol from switchgrass) have not been met for the last few years, which could cause alarm among those required to purchase fuel or credits to satisfy the mandate, as this subcategory is slated to ramp up from roughly 3% of the requirement in the standard in 2012 to roughly 44% of the standard in 2022. Limited cellulosic biofuel production has occurred to date. As a result, as allowed under the RFS2, the Environmental Protection Agency (EPA) has lowered the required cellulosic biofuels volume for 2010, 2011, 2012, and 2013 and has proposed to do the same for 2014.
Currently, algae-based biofuel qualifies as an advanced biofuel under the RFS2, but not as a cellulosic biofuel. If algae were added as an eligible feedstock type under the RFS2 cellulosic biofuels mandate, and if an increase in production resulted, then a larger portion of the requirement might be achieved, although current production is minimal. Algae does qualify as a feedstock for the biomass-based diesel subcategory of the RFS2 advanced biofuel mandate. The RFS2 does not mandate rapid growth of biomass-based diesel, as it does for cellulosic biofuels.
Algae can be converted into various types of energy for transportation, including biodiesel, jet fuel, electric power, and ethanol. The potential advantages of algae-based biofuel over other biofuel pathways include higher biomass yields per acre of cultivation, little to no competition for arable land, use of a wide variety of water sources, the opportunity to use carbon dioxide from stationary sources, and the potential to produce "drop-in" ready-to-use fuels. Potential drawbacks include the anticipated cost of production, the amount of resources (e.g., water and land) required to produce the biofuel, and the lack of commercial-scale production facilities. Algae-based biofuel research and development are in their infancy, although work has been conducted in this area for decades. At present, published research efforts offer policymakers little guidance on what algae types or conversion methods could be the front-runner for commercial production, or on when and for which biofuel.
Congressional support for algae-based biofuel has consisted of congressionally directed projects and funding of programs and studies by the Departments of Energy (DOE) and Defense (DOD). Some algae industry advocates contend that Congress should encourage advances in algae-based biofuel production by extending the expiration date for eligible tax credits, appropriating additional federal funds for algae-related programs, and modifying the RFS2 to include algae in the cellulosic biofuels mandate, as was done recently for the cellulosic biofuels production tax credit. In contrast, some argue that Congress should reconsider its investment in biofuels because of the current federal budget crisis and the lack of any measurable progress in cellulosic biofuels production.
Thus far in the 113th Congress, legislation pertaining to algae-based biofuels has not been introduced. Proposed legislation in the 112th Congress would have either expanded the cellulosic biofuels definition for the RFS2 to include algae by amending the Clean Air Act, and/or expanded the definition in the tax code for select tax credits to incorporate algae (e.g., H.R. 1149, S. 1185). The American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240) amended both the cellulosic biofuel production tax credit and the cellulosic biofuel depreciation allowance to include algae-based biofuels. Both tax incentives expired at the end of 2013, and it is not known if they will be extended.