BioFuels Journal

Myke's Biofuels Blog: Domestic Ethanol Producers Penalized for Foreigners Who Tear Down Rainforests ... What's Wrong With This Picture?

by Myke Feinman, BioFuels Journal Editor

The renewable fuels standard (RFS) signed into law by President Bush on Dec. 19 includes a new regulation that penalizes each new ethanol plant who cannot meet a lifecycle analysis (LCA) of at least 20% less greenhouse gas (GHG) emissions than petroleum gasoline.

This new 20% LCA requirement could pose a problem for the ethanol industry.

According to the regulation, an ethanol plant's LCA includes all the energy and emissions involved with the production of ethanol from planting the corn, processing the ethanol, to shipping and distribution to the consumer.

On the surface, that 20% GHG comparison to petroleum gasoline sounds fine since starch-based ethanol produced at dry corn mill plants utilizing natural gas as an energy source have a net LCA of between 18 and 29% less GHG than a typical gasoline refinery, according to the Regulated Emissions and Energy use in Transportation (GREET) model developed by Dr. Wang of the U.S. Department of Energy, Argonne National Laboratory.

However, the RFS defines GHG in a "manner that unfairly penalizes domestic grain-based ethanol, based on dubious linkages to land clearing and agricultural practices in some developing countries," according to the American Coalition for Ethanol (ACE) Executive Vice President Brian Jennings who testified before Congress Feb. 7.

So why are American ethanol producers being punished for actions taken by people in a sovereign foreign country?

Reason for the Penalty

Here’s the theory for the penalty built into the RFS according to Jennings testimony:

• The penalty incorrectly assumes that the rise in U.S. corn prices is "caused entirely by the demand for corn-based ethanol." Jennings countered that the main factor driving up grain prices in any given year is weather, according to the Food and Agricultural Policy Research Institute (FAPRI).

• It also assumes that "increased demand for corn in the United States is causing land in previously undeveloped nations, for instance, the rainforest in Brazil, to be cleared for agricultural production." Jennings countered that in a global economy, "virtually all economic activity in the United States will have direct and indirect economic and environmental impacts around the world."

Clearing land for agricultural is called "indirect land use change."

Jennings testified that this is the only industry in the world that would be held to such a penalty.

"Ascribing GHG, emissions from land clearing in developing countries to biofuels production in the United States would hold the domestic ethanol industry to a uniquely punitive standard, one that no other U.S. industry would face under a national cap and trade program to limit GHG emissions," Jennings said.

ACE Legislative Counsel Eric Washburn told me Feb. 21 that this penalty is frustrating for the ethanol industry.

"Are you going to make U.S. consumers ultimately responsible for GHG emissions caused by the production of goods in other countries?" Washburn asked. "That's the question that indirect land use raises."

The existing plants and plants under construction as of Dec. 19, 2007, would be exempt from the LCA requirement, Washburn said.

However, Washburn added that it is unlikely that going forward, new ethanol plants would be able to meet the LCA standard if they are using a starch-based feedstock.

Washburn added that the indirect land use provision comparison with gasoline does not include the indirect costs associated with gasoline—such as the multi-billion dollar military cost to keep the shipping lanes safe for transporting oil in such regions as the Middle East.

"We're not comparing apples to apples with indirect land use," Washburn said.

Solution

Washburn believes the RFS needs to be adjusted, eliminating the "indirect land use" provision.

He stated that utilizing the standards set by scientists like Dr. Wang with his GREET model takes into account all the GHG emissions for the production, and distribution of corn ethanol.

"We want to make it fair, a direct comparison (LCA of GHG emissions) of petroleum and ethanol," Washburn said. "Look at the process of growing corn, processing the corn at the ethanol plant, and transporting the fuel to the consumer. We agree with all of that."

Jennings agrees, too.

"ACE is going on record today to state it will vigorously work to oppose any proposed Low Carbon Fuels Standard (LCFS) legislation that attempts to use indirect land use changes in foreign countries in determining the LCA GHG emissions of grain-based ethanol."

Good for you, Brian and ACE.

I agree. Let's change the RFS to eliminate the "indirect land use changes" portion of the law and compare apples to apples with ethanol vs. petroleum gasoline utilizing a fair, actual lifecycle analysis for both fuels.

Thanks for reading, biofuels buffs.