EPA Public Hearing on Carbon Pollution Emission Guidelines for Existing Sources Testimony of Matt Carr, Executive Director, Algae Biomass Organization July 29, 2014 On behalf of the Algae Biomass Organization (ABO), I greatly appreciate the opportunity to comment on EPA's proposed Carbon Pollution Emission Guidelines for Existing Sources. ABO is the trade association for the algae industry, representing the leading developers of renewable, sustainable products from algae. Our membership includes producer companies, research institutions, utilities, airlines and other end users, and a range of other partners throughout the algae supply chain. ABO appreciates and supports EPA's efforts to reduce emissions of carbon dioxide (CO2) from power plants and other industrial sources. Appropriate regulation can help mitigate the rise in atmospheric CO2 concentrations. It also represents a tremendous opportunity to foster the growth of technologies that utilize CO2 as an input for renewable, sustainable products. This is particularly true for algae. ABO members are developing a wide range of algae technology platforms to convert CO2 to renewable fuels, chemicals, fertilizer, plastics, feed ingredients and other products. Photosynthetic algae thrive on concentrated sources of CO2. To provide the optimal environment for growth, today's algae developers must purchase commercial CO2 — at great expense — as a feedstock. ABO members would welcome the opportunity to participate in reducing emissions of CO2 from the power sector by partnering with utilities to utilize captured carbon as a feedstock, transforming CO2 from an expensive waste disposal issue into a resource that will benefit industry, the environment and ratepayers. ABO members are, in fact, in active negotiations with utilities to do just that. ABO has serious concerns, however, that this proposed rule, as written, could have a profound chilling effect on the development of algae and other CO2 utilization technologies. The proposed rule offers states flexibility in developing compliance plans. But by making no mention of carbon capture and utilization (CCU) while affirmatively recognizing other compliance options, including carbon capture and sequestration/storage (CCS), the proposed rule risks sendingthe signal to states — and to investors — that carbon utilization is not a preferred mitigation strategy.

This would be a profound missed opportunity. Algae CCU is adequately demonstrated and technically feasible. It can be implemented at reasonable cost, provide meaningful emission reductions, and will serve to promote further development and deployment of the technology. Since 2010, the Department of Energy has helped to advance algae CO2 utilization by funding a dozen projects. Carbon utilization is being demonstrated at projects in Florida, New Mexico, lowa, Hawaii, Kentucky, and elsewhere, and is ready for commercial deployment. ABO members are in negotiations with partners in China and several other nations to deploy algae CCU technology. CO2 utilization has now advanced to the point where it can and should be available to states to help meet their greenhouse gas goals. By creating a market for captured carbon, carbon utilization can mitigate, offset, or even negate the cost of carbon capture, providing a CO2 reduction mechanism that minimizes the cost to ratepayers. Algae producers need CO2 and will pay power producers to get it. As you know, the greatest concern about carbon regulation is the cost of compliance. Absent technologies that can reuse waste carbon, compliance is a sunk cost. Currently, some projects are seeking to offset the cost of compliance by selling the CO2 for enhanced oil recovery. In contrast, algae CCU offers a way to offset the cost of compliance while reducing the use of petroleum. This seems to me a much better approach to comprehensive CO2 reductions. Even when subsequently combusted as a transportation fuel, CO2 utilization produces meaningful emissions reductions by displacing additional fossil fuel combustion. Peer reviewed lifecycle analyses of two of the largest commercial demonstration algae production facilities show

CO2 reductions of 68' to 80 2percent. Every barrel of algae biofuel produced through carbon

' Xiaowei Liu, et al., Life Cycle Assessment of Transportation Fuel Productionfrom Hydrothermal Liquefaction ofAlgae Grown in Open Ponds, 146 BIORESOURCE TECH. 163 (Nov. 2013) ' Dexin Luo, et al., Life Cycle Energy and Greenhouse Gas Emissions for an Ethanol Production Process Based on Blue-Green Algae, ENVIRON. SCI. TECHNOL. 2010, 44, 8670-8677capture replaces a barrel of petroleum that would otherwise have been extracted and combusted.

Through this substitution, CO2 remains permanently stored underground as petroleum. We understand that the proposed rule does not mandate any single method for meeting the CO2 reduction targets. It does, however, include a discussion of CCS as a method that states can use to meet its target. 

### "The imp/ementation of partial CCS may be a viable GHG mitigation option at

some facilities, and as a resu/t, emission reductions achieved through use of the technology could be used to he/p meet the emission performance level required under a state plan." The preamble also specifically asks for the public to comment on the application of CCS for existing utilities, but

makes no mention of utilization. We are concerned and believe that EPA is missing an important opportunity by failing to recognize or even solicit comments on CO2 utilization as a method that states can use to meet their targets. We are concerned the proposed rule's silence on CO2 utilization will effectively discourage states from including utilization in their state plans, thereby slowing progress in technology development with great potential for monetizing CO2 and reducing atmospheric CO2 in a productive

way. The Pollution Prevention Act waste management hierarchy lists waste treatment options in the following order: 1. Prevention or reduction of waste; 2. Fiecycling; 3. Treatment; 4. Disposal. Disposal is the least preferred option for handling waste under the statute. We encourage the EPA to apply this hierarchy to CO2 and encourage the utilization of CO2 as a preferred method to sequestration. We encourage the EPA to include language in the final rule indicating that carbon utilization would be an acceptable component in state emissions reduction plans. Such affirmative recognition would provide states and sources of private capital with the confidence to invest in this highly promising CO2 solution while helping to create a market for CO2 that reduces the cost of compliance. Thank you for your consideration of these remarks. We look forward to submitting further, comprehensive formal comments prior to the comment deadline.

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