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EPA publishes final RFSII rule: a tool to move biofuels forward

Nathanael Greene

Posted February 3, 2010 in Moving Beyond Oil, Solving Global Warming

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Today EPA Administrator, Lisa Jackson, sign the final regulations to implement the renewable fuel standard as amended in the Energy Independence and Security Act of 2007 (a.k.a. RFSII). With the tools that EPA has developed, we can finally start to hold biofuels corporations accountable.

The final rule came out Just before a White House release of a package of efforts intended to speed up the development of advanced biofuels. More on this package later.

The final RFSII rule confirms that there are major differences between different types of biofuels. Some reduce global warming and some pollute more than gasoline and diesel. The RFSII rule builds on a robust, science based process and lays out a clear plan to further refine these tools through an NAS study that EPA has requested.

With EPA’s tools, we can have greater energy independence, create good American jobs, and we don’t have to sacrifice our health, climate or the environment.

The lower cellulosic volumes (6.5 million gallons instead of the original 100 million target set for 2010) and the significant public health and air quality impacts identified in the rule reinforce the urgency of starting to hold the industry accountable and moving beyond the dirty, old corn ethanol that dominate today’s markets. The RFSII is not enough; we need to reform the biofuel tax credits so that tax payers get real clean energy for their money, we need to focus government incentives on American innovation and jobs so we get the first billion gallons of the best biofuels into the market, and ultimately we need to evolve to a Low Carbon Fuel Standard like the one adopted in California.

A. What does the final rule say about indirect land-use?

EPA’s final rule confirms that for some biofuels, emissions from chopping down forests and plowing up wild places—so called “indirect land-use change”—are still the most significant source of emissions. And EPA’s rule holds businesses that cause these emissions accountable.

Through the incorporation of new data, EPA’s central value for emissions from land-use change has actually gone down since the proposed rule, but if the high end of the range is considered several fuels would not qualify for the RFS and would come close to having higher GHG emissions than petroleum fuels.

So the question is not whether this is a significant impact of certain biofuels, but how significant. Building on a peer-review process and extensive stakeholder comments, EPA’s methodology has held up. More data was incorporated into that existing methodology to get more accurate answers and further review including the proposed NAS study will further refine it over time.

Despite the uncertainty, the analysis confirms that advanced biofuels are the path to greater energy independence, better protecting our health and deep GHG reductions. That’s why we need to go build on the RFSII through reforming the biofuel tax credits, focusing incentives on the first billion gallons of the best biofuels, and eventually adopting an LCFS. These measures will move us beyond uncertainty and controversy if they are designed to develop biofuels of indisputable environmental merit.

B. How do EPA’s results compare to CA’s?

EPA and California Air Resource Board analyzed different things, but once you dig into the numbers, EPA’s findings reinforce CARB’s findings. This convergence further confirms the idea that there are good biofuels and bad biofuels, we have the tools to hold the industry accountable, and we need to be focused on getting the good biofuels into the market.

EPA focused on very optimistic assumptions about what biofuels will look like in 2022. CARB asked what biofuels are like today. EPA also had the advantage of almost a year of additional data and findings.

Digging into EPA’s analysis, their findings on the critical issue of emissions from land-use change are very close to California’s even though they used different methods, and CARB’s land use change results are well within the range of values EPA found in its uncertainty analysis for almost all biofuels.

C. Why did EPA’s numbers change so significantly from the NPRM?

EPA’s numbers changed because they got better data. The three most important updates were to the economics of yields, the value of coproducts that are produced along with biofuels, and higher definition satellite data.

The final GHG emissions numbers still make it clear that emissions from indirect land-use change is a hugely important issue that we cannot afford to ignore.

D. What does EPA’s regulatory impact assessment show?

EPA’s impact assessment (see page 6 for a summary table) shows that rushing blindly forward with the RFS threatens our health and water. Achieving the mandated future renewable fuel requirements will increase the risk of premature mortality in portions of the U.S as well as increase water pollution unless we move beyond corn ethanol and take steps to avoid these impacts. The biggest public health impact is from particulate matter emissions associated with the production of biofuels to achieve the mandated future renewable fuel requirements. More ethanol will also mean using more water and polluting more water.

Fortunately, these impacts can be avoided or at least minimized. EPA should implement the anti-backsliding requirements in EISA to address these impacts. These are exactly the sort of unintended consequences that provision was intended to address.

Clamping down on the air pollution from ethanol refineries is a critical first step that EPA can take on its own. Congress should follow up by reforming the biofuel tax credits so that they reward cleaner, greener biofuels and hold the dirty, old refiners accountable. Getting refineries to reduce their air pollution and water consumption is easy technologically; it’s just a matter of providing the right regulations and incentives.

Congress, California and tax payers that are subsiding the biofuels industry should not be swayed by the efforts of the dirty, old corn ethanol to shirk responsibility for threatening our health, destroying the rainforests, and polluting the climate. We can create better jobs, greater energy independence, and protect the climate if we start holding the industry accountable. EPA’s RFSII rule is a good start.

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Comments

Nathanael GreeneFeb 3 2010 04:05 PM

Just noticing the industry's response to the final rule. This statement http://bit.ly/aCIHil is modestly helpful. This attempt to crunch the numbers http://bit.ly/bt3sxk misuses them by suggesting you can just take out the international ILUC emissions.

Geoff CooperFeb 3 2010 05:46 PM

Hello Nathanael,

Thanks for the link to our statement and I guess "modestly helpful" is a somewhat flattering characterization of our position (at least in light of some of your previous responses on this blog to our earlier comments on RFSII developments and ILUC!).

However, as you might expect, I'd like to point out a few places where we disagree with your re-cap of the final rule. You say: "The final RFSII rule confirms that there are major differences between different types of biofuels. Some reduce global warming and some pollute more than gasoline and diesel."

While I'll be the first to agree that there are differences among different types of biofuels and feedstocks, I think the second sentence is misleading and mischaracterizes EPA's results.

EPA found that *ALL* corn ethanol generated using natural gas results in GHG reductions. (see pages 482-483 of RIA) And this finding is not based on "...very optimistic assumptions about what biofuels will look like in 2022." Rather, most of the natural gas corn ethanol pathways anayzed by EPA are based on curretly deployed technologies that are in wide use by today's industry. Bear in mind, natural gas provides the energy for about 90% of today's ethanol production capacity. Even some coal-fired ethanol plants (which today represent only ~8-9% of capacity) were found by EPA to reduce GHG emissions compared to gasoline. Of the 51 corn ethanol pathways analyzed by EPA, 46 were found to reduce GHGs compared to gasoline(and if the lower bound of the range is used, it's 49 out of 51). The few pathways found by EPA to marginally increase GHGs represent less than a handful of today's ~200 plants.

My point is, to say that "some pollute more than gasoline" is deceiving. The truth is,the *overwhelming majority* of corn ethanol--from the plants operating today as well as the plants that will be built in the future--reduces GHGs considerably according to EPA's analysis released today(even with ILUC).

You also say: "Digging into EPA’s analysis, their findings on the critical issue of emissions from land-use change are very close to California’s even though they used different methods..."

While the net emissions from ILUC in EPA's and CARB's analyses are indeed closer now, it's likely to be a matter of pure coincidence. The methodologies used by the two agencies remain substantially different. Different models, different LCA approaches, and many different input assumptions were used. I think any modeler who has taken the time to understand both analyses would agree that the two agencies take significantly different approaches. If, for instance, EPA's assumptions regarding corn ethanol co-products, crop yields, and the productivity of converted lands were used in CARB's GTAP analysis, the CARB ILUC results would change dramatically (and would probably be 8-10 g/MJ or less vs. their current 30 g/MJ).

In any case, we can agree on one thing and that is the fact that EPA's final rule analysis benefited greatly from better data and information. And as more and better data become available moving forward, the understanding of the impacts of biofuels expansion will only improve and the ILUC emissions estimates will continue to fall. I'm sure someday soon the world will look at the first widely-known ILUC estimates (Searchinger et al) in the same way that it now looks at the widely discredited and roundly rejected early ethanol energy balance estimates of Dr. David Pimentel.

Thanks for the opportunity to comment.

Geoff Cooper
RFA

Larry FarmerFeb 15 2010 11:21 PM

Polluting water to make ethanol? No, no no! That's industrial, open-loop system thinking. That is what's gotten us into this mess in the first place. We need to abolish this line of reasoning from our thoughts and words.

The notion of ILUC has gotten out of hand. Certainly, it is a previously unrecognized consequence of biofuel policy, but it does not need to stifle our progress on biofuels. The unintended consequences of our fuel policies must be carefully considered, but how is that different from any other policy? We will make mistakes, we just need to be willing to fix them.

Ultimately, we need to reward thoughtful, sustainable, closed-loop production of biofuels. Plants using using coal to produce ethanol from corn need to be discouraged. The EPA's policy, imperfect though it may be, is a positive step forward.

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