Midwest Low-Carbon Biofuels Standard Pitched

A coalition assembled by the Great Plains Institute is working to bring a policy like California’s Low Carbon Fuel Standard to the Midwest. With an inclusive approach, the group asks states to support credit generation for an array of clean fuels.
By Matt Thompson | May 02, 2020

It just makes sense to keep more ethanol in the Midwest, says Brendan Jordan, vice president of transportation and fuels for the Great Plains Institute. Jordan emphasizes that while California’s Low Carbon Fuel Standard has benefited Midwestern ethanol producers who are able to transport their product to the state, a Midwestern version of the LCFS would keep that fuel—and its economic impacts—closer to where it’s produced.

 That’s the mindset behind the Midwestern Clean Fuels Policy Initiative’s push to produce a similar standard. The initiative is a coalition of groups from various industries, brought together by the Great Plains Institute, intent on promoting climate-healthy goals. It’s this approach—collaboration among agencies with potentially disparate goals—that Jordan sees as critical to enacting such a policy. “I think you need to build that broader coalition and I think doing it around something like a clean-fuel policy is a way that we can get more people to the table,” he says. More organizations bring more ways to win, he adds.

In January, the Great Plains Institute and the Midwestern Clean Fuels Policy Initiative released a white paper, “A Clean Fuels Policy for the Midwest,” outlining recommendations for implementation. The white paper recommends including fair life cycle assessment for all fuel types, using the GREET model, and considerations for expanding clean fuels infrastructure. “Broad consumer access to cleaner fuels should increase and accelerate the benefits of a clean-fuel policy,” the paper says. “States should consider allowing credit generation for underutilized infrastructure for fuels with under-served passenger car populations, including E85 and mid-level blends, [electric vehicle] charging stations, and hydrogen fueling.”

In addition, Jordan says, the Great Plains Institute recognizes that many states and municipalities already have policies in place. “I think this clean-fuel policy is really intended not to replace any of those things, but to build on them and keep us moving forward as a region; and continue to assert Midwestern leadership in the biofuels sector,” he says.

‘Technology-Neutral’
A key tenant of the white paper is that the policy shouldn’t favor a specific technology or fuel, Jordan says. “There is certainly a perception that California has picked their favorite technologies and has taken some steps to favor them in life cycle assessment and rules of the program,” he says. That approach is something stakeholders involved in contributing to a Midwest LCFS have avoided. “[That’s] been really important for our stakeholders,” Jordan says.

Donna Funk, principal at K-Coe Isom, agrees. “CARB (California Air Resources Board) has not really necessarily made it a secret that their long-term goal is no liquid fuels, period,” she says. “I don’t think the Midwest will go to that extreme, but will look at it more from a total fuel option mix of what makes the most sense given the industry, given the economics, given just the population factor and what does that really mean from an infrastructure standpoint.” That could include electric and hydrogen, she says. “But what’s the right whole blend and mix, versus 100 percent liquid fuel with a goal of zero percent liquid fuel?”

David Ripplinger, assistant professor at North Dakota State University’s Department of Agribusiness and Applied Economics, and North Dakota’s bioenergy and bioproducts economist, agrees. “If your goal is lower carbon emissions, if that’s corn ethanol, great. If that is hydrogen, great,” he says. “If that is still gasoline to some extent, great.”

Funk says producers are increasingly interested in taking part in California’s LCFS in recent years, and there’s interest in a Midwestern version, too. “From the producers’ standpoint, I think there is support for a Midwest low-carbon standard.” But producers want to proceed with caution, she adds, to ensure the policy is right and doesn’t create a rush to overproduction or fail to entice the market as it’s intended to.

A Midwest LCFS-type program could also give growers credit for their carbon reductions. Ripplinger says California and CARB are only interested in accounting for farms’ carbon if CARB has a field-level understanding of carbon sequestration or carbon release. “And the science isn’t there yet,” he says.

Growers’ Perspectives
While Ripplinger says a Midwestern LCFS would strive to give benefits to farmers who are able to lower the carbon intensity of their operations, a standard, and the lack of a reliable way to measure carbon on farms is a barrier. Measuring diesel consumption, fertilizer and yield are straightforward, but determining metrics such as how much carbon is stored in the soil are much more difficult. “The actual long-term sequestration or carbon release, in any particular real-world situation is tough to measure,” Ripplinger says. “That’s why you’re seeing a lot of investment and interest in this by USDA, Department of Energy, CARB—because, at least in California, they want to see the same type of precision that they get from a corn ethanol refinery, which is different.”

Ripplinger says once a metric for agricultural carbon measurement is determined, the logistics of rewarding farmers for practices like no- or low-till, precision fertilizer application and yield increases should be decided. Research on how to do that is ongoing, he adds. “When you introduce a low-carbon fuel standard, it’s anything and everything that could be on the table,” Ripplinger says. “And again, nobody’s dictating what that might be. You essentially add that carbon price to every input and every operation, and you’ll see farmers will react to that.”

Funk agrees that rewarding farmers should be a key component of Midwestern policy. She says it will be important to look at the entire transportation impact, the real indirect land-use component, and assess whether farmers are getting credit for sustainable practices they’ve implemented. “It’s really more about looking at what I would call the total picture of what really all plays into that.”

Ripplinger says tillage practices and fertilizer applications are areas where farmers stand to benefit the most under clean-fuels policies and carbon reduction. “Farmers are already incentivized to efficiently use nitrogen because it’s expensive,” he says. “Tillage is by far the biggest opportunity to reduce greenhouse gas emissions. You can sequester a massive amount of carbon over time by having those practices, and so that’s clearly the biggest opportunity.”


‘Education and Outreach’
Following the release of the white paper, Jordan says reaching out to other stakeholders and policy makers will be the next step. “The real key right now is education and outreach,” Ripplinger says. “Not everybody’s well-informed on this policy, so we’re going to have a lot of work to do just on the stakeholder side, but also starting to educate policy makers and build support. And we’re going to be working in multiple states and at the federal level to just create more awareness about this approach.”

Part of that outreach will be releasing modeling information, Jordan says. When Jordan spoke with Ethanol Producer Magazine in February, modeling information hadn’t been released yet, but he offered a preview. “We modeled a 20 percent carbon intensity reduction over a 10-year period in the Midwestern states, and that resulted in an average ethanol blend in 10 years reaching 20 percent,” he says. “I just think it’s really notable that increasing blending has been a goal for the industry for a long time, but we’ve demonstrated that if you achieve those blending increases through a clean-fuels policy, you can build strong environmental community support.”

While farms stand to benefit from a Midwestern LCFS, Ripplinger says biofuels policy in general isn’t top of mind for growers right now. “I would say most are probably unfamiliar with California’s LCFS, as important as it is to the corn ethanol industry as a whole,” he says. “In general, they’re not familiar with what its impacts are on fuel markets, and then pushing back to them.” He adds that factors such as trade disputes, as well as poor growing, planting and harvesting conditions are the important issues for farmers in the near-term.

But, he says, farmers’ knowledge of biofuels policy isn’t a roadblock for a Midwestern LCFS. “I frame it as an opportunity,” he says. “I think that farmers can and will be assembled and educated on this and when they are, I think they’ll be a powerful force and will complement other stakeholders in getting policy enacted at the state level in the Midwest.”

He also adds that there are many farmers who have ownership in ethanol plants and those groups likely recognize how important the LCFS is for some plants, and what a Midwestern version could mean for others. “The ethanol industry’s clearly under a bit of financial duress with overcapacity, and for those folks who can supply that California market, it’s a really great opportunity,” he says. “Adding that extra incentive might be the thing that keeps their corn ethanol refinery continuing to produce.”

Jordan says the ethanol industry has already provided crucial support for a Midwestern policy, and he expects it will continue to do so. “I think there’s been so much leadership in the ethanol industry and so much innovation on technologies that lower the carbon intensity of ethanol and there’s just a lot of great ideas out there,” he says. “So, it’s just really clear to me that if we set up the right policy signals, this industry will deliver.”

Author: Matt Thompson
Associate Editor, Ethanol Produce Magazine
701.738.4922
mthompson@bbiinternational.com