Bioeconomy & transportation advisory group


Key Uncertainties Describe or say None cited. Additional Benefits and Costs



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Key Uncertainties


Describe or say None cited.

Additional Benefits and Costs


1. Use numerical listing.

2. Keep the items brief – 1 or 2 sentences.

3. Include social /non-quantifiable and indirect benefits

[Okay to say if these will be analyzed at a later date.]


Feasibility Issues


Describe or say if none cited.

Status of Group Approval


Pending

Level of Group Support


TBD

Barriers to Consensus


TBD

BT-3.1: Advanced Transportation Technology Commercialization

Policy Description


Advanced transportation technologies

The Midwest has many advantages in pursuing a low carbon transportation system, including a rich agricultural land base for producing biofuels and a large existing biofuels industry, a large automotive manufacturing industry, a network of elite research universities, and a variety of other manufacturers. This policy option is designed to promote commercialization of advanced transportation technologies by taking advantage of these regional strengths.

For the purposes of this policy option, an advanced transportation technology is one that enables lower greenhouse gas emissions per mile traveled than current practice in the region, and that is not currently available due to scientific, technical, or cost hurdles. This policy option may support commercialization of low carbon fuels (e.g. advanced biofuels, electricity, hydrogen), advanced energy storage technologies suitable for transportation vehicles (e.g. batteries), advanced drivetrains (e.g. electric and fuel cell), and other vehicle technologies enabling decreased fuel consumption or adoption of lower carbon fuels.

This policy option should be designed to complement other policies supported by the MGA Bioeconomy and Transportation Advisory Group. Specifically, decisions on whether to support commercialization of specific low carbon fuels should be based on the same life cycle GHG criteria developed as part of implementing the regional Low Carbon Fuel Standard, and support should be offered to those fuels offering the greatest GHG reduction. The same should be true for advanced vehicle technologies, with policy support being given to those technologies offering the greatest GHG reduction potential.


Policy Design


    Goals:

    This policy option promotes the development of advanced transportation technology facilities throughout the Midwest region by providing, incentives, financial support, technological support, and training of the workforce.



The Advanced Conversion Technology Policy will support technology development in the following areas:

  • Commercialization of advanced biofuels including;

      • Feedstock characteristics more favorable to conversion of cellulosic biomass to fuels, with a focus on feedstocks common to the region.

      • Pre-treatment to enhance yields of sugars and other chemical intermediates from biomass.

      • Advanced biofuel conversion technologies with life cycle energy and GHG benefits.

  • Commercialization of hydrogen fuel cell vehicles, hydrogen production technologies, and hydrogen storage technologies.

  • Any other advanced transportation technologies.

  • The Advanced Conversion Technology Policy will focus development of conversion technologies through the following stages:

    • Larger scale pilot facilities.

    • Commercial demonstration plants approximate 10 percent of the size of full scale commercial production.

    • Full scale commercial production.

Timing:

Immediately

      • Training and education should begin as soon as possible

January 1, 2010

      • Funding should be made available.

      • Incentives should be in place.

      • Grants, debt financing guarantees, and tax credits should all be available.

      • Intellectual Property policies and regional regulatory policies should be in place to allow for faster tech transfer and faster project development.

Parties Involved:

The success of this policy option will depend upon a partnership between government and private industries. State and local governments will be looked upon to provide the necessary incentives, funding, and support for the development of these new technologies up to the point of commercialization. Private industry will provide additional investment and the advancements in technology necessary for the development and operation of the plants.



Other: None cited.

Implementation Mechanisms


A funding mechanism will need to be created to foster the development of advanced transportation technology up to the point of commercialization. Regional partnerships must be developed between state and local governments, universities, and private industry. These partnerships should focus on:

    • Creating a cooperative environment where intellectual property is developed in the region andremains in the region for the benefit of the region.

    • Making guaranteed loans readily available to industries developing advanced conversion technology.

    • Creating an environment where industry feels secure in making capital investments.

Select through a regional competitive proposal process up to six technologies that harness regional advantages and are likely to develop the economy in the region. To ensure full value change integration the process should:

  • Implement a competitive proposal process as funding becomes available, funding will be derived from the public and private funding mechanism detailed below.

  • Set criteria for selection carefully to enable the selection of technologies with benefits to the region in the development and utilization of regional feedstock, enhancement of the conversion technology process, and in the end product. These criteria will be developed through a public-private partnership of those in the industry to determine where enhancements that can most benefit the commercialization of these technologies can have the most impact.

  • Select across the three technology research areas (feedstock characteristics, pre-treatment, advanced biofuel conversion technologies).

Establish a public and private funding mechanism to take the targeted advanced conversion technologies from pilot plant through demonstration stage. Important elements of this mechanism include:

    • Use public funds to seed and leverage additional private capital resources;

    • Make the process ongoing;

    • Make grants available for up to 25% of the costs to move the project from a pilot plant through a demonstration stage;

    • Provide debt financing guarantees for first commercial projects to prove the technology at commercial scale;

    • Establish incentives such as tax credits (25%) for equity investments in high risk projects ;

    • Provide lease / purchase agreements that may result in certain zero emission vehicle (ZEV) manufacturing projects to be exempt from sales and use taxes, modeled after California CAEATFA incentives program;

    • Develop financial support mechanisms for clusters of farmers and conversion technology plants in the form of grants, low interest loan guarantees, tax incentives, or other forms of incentives; and

    • Create multi-year agreements to allow for appropriate feedstocks to develop and fuel production plants.

Form strategic partnerships with industry, the federal government, and investors to leverage additional sources of funding to build regional innovation clusters that take advantage of expertise in multiple locations and sectors to speed commercialization of key technologies.

Fund the development of regionally focused programs to enhance and improve targeted advanced transportation technologies.

Develop regional training programs to develop a skilled workforce capable of operating and maintaining advanced technology facilities.

Establish Intellectual Property policies which will encourage entrepreneurial activities and capital influx to targeted technologies at regional universities.

Adopt regional regulatory policies to streamline the permitting approval process for advanced conversion projects to allow for faster development of these plants

Leverage funding, as a region, made available in the American Recovery and Reinvestment Act of 2008. Specifically the $2 billion dedicated for Advanced Battery Manufacturing grants to support the manufacturing of advanced batteries and components.



Parties Involved

  • Relevant state agencies

  • Regional universities w/ relevant expertise

  • Leaders of private industry located within the Midwest

  • Investors

  • Federal agencies

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