With the exit of Scott Pruitt from the Environmental Protection Agency (EPA), an already tense debate over the future of U.S. biofuels policy has become even more contentious. Ethanol, still the nation's predominant biofuel, continues to carry political cachet even as market conditions fluctuate, and remains at the middle of a debate between the conflicting interests of agriculture and petrochemicals, both of which continue to wield significant lobbying power.
Despite ambitious mandates in place for the past decade, advanced biofuels have failed to proliferate in the U.S. because of insufficient infrastructure, high costs, and technological limitations. Despite advanced biofuels' weak showing in the U.S., there are signs of progress that may lead to a significant expansion of the market in the next several years.
While next generation biofuels, such as biodiesel,renewable diesel,and cellulosic ethanol, are currently cost prohibitive, certain markets have strengthened subsidies and incentives that could result in the economic viability of increased production and more widespread use
Major technological risks remain, complicating the construction process and potentially affecting credit quality.