EBI Personnel Directory Paulson, Nicholas

ESE Impacts

Nicholas Paulson





Alternative Programs to Incentivize Investment in U.S. Cellulosic Biofuel Refining Infrastructure

Investors in cellulosic biofuel processing face high capital and start-up costs, particularly the early entrants to the industry. These costs are expected to decline significantly after production begins and the technology matures through learning and resulting knowledge spillovers. Moving towards commercialization of cellulosic fuel production will require providing the necessary economic, legal, and/or political incentives for fuel producers to make significant capital investments in building processing facilities, and farmers to begin growing feedstocks to supply the processing facilities. This project is analyzing loan guarantee programs, designing innovative insurance programs, and evaluating the potential for private market derivatives which would provide potential refiners with funding sources and risk management tools to encourage investment in cellulosic processing capacity. Government loan guarantees, insurance programs, and private market derivative instruments are being studied as options to achieve targeted production capacity levels for the industry to meet RFS2 mandate levels within the next 5 years.