EPA proposes anticipated RFS2 rule

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The U.S. Environmental Protection Agency released its long-awaited proposed rule to revise the federal renewable fuel standard (known as RFS2) to conform to the Energy Independence & Security Act of 2007.

The rule includes EPA's effort to compare the carbon footprints of various renewable fuels — cellulosic biofuels, biomass-based diesel, advanced biofuels and total renewable fuel — with those of average petroleum fuels.

According to the 2007 law, renewable fuels must meet specific greenhouse gas (GHG) emission thresholds in order to qualify for the RFS program. All fuels, including corn ethanol, are required to meet a 20% reduction in lifecycle GHG emissions, while biodiesel must meet a 50% reduction threshold and cellulosic ethanol must meet a 60% reduction threshold.

EPA's notice of proposed rulemaking on the RFS2 concludes that grain-based ethanol reduces direct GHG emissions by more than 60% compared to gasoline. However, this number does not incorporate indirect emissions.

Science based

The biggest concern to the ethanol industry is EPA's inclusion of indirect land use in its lifecycle GHG emission requirements.

EPA's current methodology for calculating penalties for indirect land use change of biofuels equates to carbon footprints that do not meet the 20% and 50% reduction thresholds for ethanol and biodiesel, respectively. This analysis is not done for baseline petroleum fuels, which ethanol supporters say is wrong.

EPA will conduct scientific peer reviews on the lifecycle analysis of the four renewable fuel categories — a positive sign for those who want the rule to better reflect what ethanol supporters hope is a more scientific basis for countering the current indirect land use change penalty applied to ethanol.

In a hearing on the RFS implementation nearly all the members of the House Agriculture Committee were highly skeptical of EPA's decision to move forward with the indirect land use change component.

House Agriculture Subcommittee on Conservation, Credit, Energy, and Research Chairman Tim Holden of Pennsylvania said the committee was "very upset with the path EPA has taken." Holden stated, "If we continue with these provisions in EISA, we will not only harm the biofuels industry but also shortchange a large part of the country before we even get started. We need to expand the reach of biofuels, not hamper the farmer and forest owner."

In testimony before the House Agriculture Committee last week, Margo Oge, director of EPA's Office of Transportation & Air Quality, recognized the ethanol industry's concerns for using science to assess GHG emissions related to international land changes.

She testified that disregarding or de-emphasizing such emissions and calculating renewable fuel lifecycle GHG emissions with the assumption that no GHG emissions are associated with international land use changes "would introduce far more error into a lifecycle GHG assessment than the EPA proposal, which is based on reasoned application of the best available science and data. The result of disregarding land use changes would be to ignore the developing science in this area and to overstate, perhaps dramatically, the GHG benefits of renewable fuels."

U.S. Department of Agriculture chief economist Joe Glauber also testified to the committee that while the effects of biofuel production on GHG emissions are expected to increase land under cultivation, existing estimates of the magnitude due to land use conversion vary.

Modeling the change in land use resulting from an expansion in production of corn-based ethanol requires making projections about future values of parameters that cannot be known with certainty.

Some of these unknowns include yields on converted lands, shifts between different land uses, yield growth over time and substitutability of dried distillers grains, Glauber outlined.

Industry concerns

Bob Dickey, National Corn Growers Assn. (NCGA) president, said, "In our conversations with (EPA), we understand that a great deal of work needs to be done on modeling and a great effort needs to be put into using current and correct data regarding indirect land use. NCGA will be working closely with (USDA) and EPA to ensure scientific data are used."

Growth Energy chief executive officer Tom Buis said it is especially important to further study the theory of indirect land use change before finalizing GHG emissions scores for biofuels.

"Indirect land use change theory uses speculative models and incorrect assumptions in an attempt to blame American farmers for deforestation in Brazil," Buis said. "As the European Union discovered while developing their biofuel regulations, the science on indirect land use is unsettled, and the theory is not ready for regulatory usage."

Buis added that indirect land use change, as currently proposed, doesn't allow for an accurate comparison of fuels because it doesn't include the indirect effects of other fuels.

"To include indirect effects in regulations without even considering the indirect effects of other fuels would unfairly bias those regulations against biofuels," Buis said.

The American Soybean Assn. called the proposed rule "significantly flawed" and added that it "could make the (RFS2) goals unattainable and harms the competitive position of the U.S. soy biodiesel industry."

The organization said an initial review of EPA's proposed rule suggests that it used land conversions to cropland that occurred from 2001 to 2004 and extrapolated those data into the future to estimate potential cropland expansions.

The fact that little U.S. soy biodiesel was produced in 2001-04 should provide an indication that soy biodiesel does not drive land use changes, yet the proposed rule would extrapolate these international land use changes and attribute future land use changes to U.S. biodiesel, the group added.

The 60-day comment period on this proposal will begin upon publication in the Federal Register. During the comment period, EPA will hold a two-day public workshop on lifecycle analysis to ensure that there is a full understanding of the analysis, the issues addressed and the options discussed.

In addition to indirect land use, EPA also is seeking updated information that may result in a change for the 100 million gal. requirement for cellulosic biofuel in 2010.

Sen. John Thune (R., S.D.) introduced a bill April 30 that directs EPA to focus on direct lifecycle GHG emissions, which would level the playing field between ethanol and regular gasoline and bring more regulatory certainty to the ethanol industry.