Proactively Leveraging Ethanol’s Low-Carbon Value

Merely playing defense on the RFS does not constitute a plan to expand ethanol demand. We need to go on offense because it is a matter of when, not if, Congress takes up climate legislation that will impact the transportation fuel market.
By Brian Jennings | August 24, 2020

The COVID-19 pandemic has caused an unprecedented economic downturn for ethanol producers, so ACE has been prioritizing our members’ survival and recovery from the historic crisis. As I write this column in late July , we have helped convince members of Congress to introduce bipartisan legislation to reimburse ethanol producers either on gallons produced or on bushels processed, and we are urging them to include some form of direct economic relief in the phase-four stimulus package.

Given the fact that ethanol use is not expected to recover to pre-COVID-19 levels for a long time, we will continue to prioritize economic relief for the biofuel sector. However, we have not allowed the coronavirus or the U.S. EPA’s ongoing mismanagement of the Renewable Fuels Standard to distract us from also strategically paving the way to leverage ethanol’s low-carbon value in the marketplace.

Prior to the outbreak of COVID-19, ACE helped lead a diverse coalition of Midwestern organizations in developing a policy blueprint to encourage new low-carbon fuel markets, resulting in “A Clean Fuels Policy for the Midwest” report we released in January of this year. Our report describes how properly crafted policy at the state level can spur low-carbon fuels and provide meaningful economic benefits to farmers and biofuel producers—nearly $1 billion annually in the Midwest. Following the release of our report, stakeholders in several Midwestern states have contacted ACE to learn more about how to push for new clean fuel legislation in their upcoming legislative sessions.

At the federal level, we have engaged key congressional offices to position agriculture and ethanol as part of the solution to their policy efforts designed to reduce greenhouse gas (GHG) emissions. Our engagement has paid dividends because it helped convince the U.S. House of Representatives Select Committee on the Climate Crisis to include a recommendation for a new technology-neutral Low Carbon Fuel Standard, in addition to the existing RFS, in a report they released this summer.

Properly crafted low-carbon fuel policy built on top of the RFS’s success in beginning to break our country’s reliance on petroleum is one of the most meaningful things Congress can do to address climate change.

The Select Committee’s report not only cites our Midwest Clean Fuel Policy blueprint as a positive example of progress, it also echoes our recommendations to reflect the best available science for life cycle assessments and reward farmers and biofuel producers using climate-smart practices that reduce carbon emissions, store soil carbon and reduce nitrous oxide emissions.

Had ACE stood on the sidelines or merely focused on the RFS or pandemic response, our opponents may have been able to convince Congress that ethanol is part of the climate problem. But we did not allow ethanol opponents to define us. We did not stand on the sidelines. ACE proactively engaged Congress, explaining how modern-day farming and ethanol production practices reduce GHG emissions, and that increasing ethanol use is part of the climate solution.

One of the reasons we have become more proactive about new federal clean fuel policy is because EPA’s ongoing and brazen mismanagement of the RFS has effectively turned the keys of the program over to the refiners and suppressed Congress’ stated goal to increase renewable fuel use. ACE will continue to apply pressure on EPA to follow the statute and participate in lawsuits to protect and support the RFS, but these activities take time and have not resulted in a timely restoration of domestic ethanol demand. Throw in the pandemic and ethanol use this year is likely to fall at least 2 billion gallons short of 2019 levels.

These are extraordinary times. Merely playing defense on the RFS does not constitute a plan to expand ethanol demand. We need to go on offense because it is a matter of when, not if, Congress takes up climate legislation that will impact the transportation fuel market. That is why ACE will continue to proactively engage Congress on the need for new clean fuel policy built on top of the RFS that can further expand the domestic marketplace.

Author: Brian Jennings
Executive Vice President,
American Coalition for Ethanol
605.334.3381
bjennings@ethanol.org