Tackling Indirect Land Use

If a tree falls in the Amazon should American biofuels be held responsible?
By Susanne Retka Schill | February 04, 2009
For years, ethanol producers have endured the criticism about ethanol's energy balance—whether more energy is produced than is used to produce the renewable fuel. Just as that discussion began to settle in ethanol's favor, the food-versus-fuel debate erupted. The collapse of commodity markets and lack of a corresponding drop in food prices have taken the steam out of that debate. In late 2008, just when it seemed like the industry might get a much-deserved reprieve from negative publicity, a far more complex challenge arose from an attempt to evaluate indirect land-use impacts of biofuels.

The indirect land-use concept goes far beyond estimating greenhouse gas (GHG) emissions through a life-cycle analysis (LCA) of the supply chain. A supply-chain LCA includes such things as the carbon emissions involved in raising the crop and transporting it to market, the energy used in the biofuel conversion process and transporting the fuel to the end user. Some want to take that analysis further and include estimated GHG emissions from indirect land-use change. For example, an increase in demand for corn in Iowa to make ethanol leads to higher corn prices, which results in more acres of corn planted and a reduction in soybean acres. The ripple effect concludes with new land being converted to take advantage of the increased prices and to meet increased global demand. Some argue that the GHG impacts of that conversion, whether it happens in the United States or in an equatorial rainforest on the other side of the globe, should be assessed to that Iowa ethanol.

U.S. ethanol producers might be tempted to shrug off the debate as another wearisome public relations problem or perhaps as an interesting, but not that relevant, academic debate. Unfortunately, this winter two important regulatory agencies have indicated they will incorporate the impacts of indirect land-use change into their standards. When Congress wrote the renewable fuels standard (RFS) section of the Energy Independence & Security Act of 2007 new GHG reduction targets were set for different categories of biofuels. The statute includes "significant indirect emissions such as significant emissions from land use changes" in its definition of life-cycle greenhouse gas emissions. The U.S. EPA is charged with using that definition as it writes the rules for implementing the new RFS. Furthermore, the California Air Resources Board has included a measurement of indirect land-use impact in its low-carbon plan.

For the biofuels industry, indirect land-use is no longer a debate being waged in academic journals and on the editorial pages of major newspapers, but in precedent-setting public policy. The scientific community, nonprofits and industry representatives have been marshalling their facts and sending volleys of letters to the agencies involved and writing journal articles and white papers critiquing the indirect land-use assessments models that are being developed. The criticisms center on the inadequacies of the models to quantify indirect land use and underlying assumptions.

Faulty Models
The Renewable Fuels Association dug into the details of the data used in the models in a paper it released in November titled "Understanding Land Use Change and U.S. Ethanol Expansion." The report discusses historical agricultural land use and crop utilization trends, the role of increased productivity, the contributions of ethanol feed coproducts, and global agricultural land-use projections. Bob Dinneen, RFA president and chief executive officer, drew on the report to defend U.S. ethanol. "The impressive productivity advancements of American farmers have largely mitigated the need for additional arable acres to be brought into production here in the U.S.," he said. "Land exists around the globe, should it be needed, that can be responsibly and sustainably brought into agricultural production. … A team of researchers from Stanford University estimates that an area of abandoned agricultural land half the size of the continental U.S. could be brought into production with minimal impact on the environment."

RFA also probed the details of the model California is proposing to use. In a letter to CARB, the RFA questioned the capacity of the Global Trade Analysis Project model to reliably predict land-use change impacts. The RFA said the model underestimates the productivity of marginal lands in the U.S. that could be converted to crops, as well as the gain in average grain yields over time, and the model does not account for an incremental expansion of ethanol production. "Because the model is ‘shocked' with 13.25 billion gallons of new ethanol production instantaneously, and yield values do not take into account the improvement in yields between 2000 and 2015, the model is converting too much land to crops as a result," the letter stated. In addition, the RFA said the model underestimates the credit provided by distillers grains and appears to omit Conservation Reserve Program land and idled cropland from its land inventory.

The American Coalition for Ethanol weighed in with its own white paper "Lifecycle Analysis of Greenhouse Gas Emissions Associated with Starch-Based Ethanol." The ACE paper addressed other problems with the model methodology, particularly that there was not enough ground-based verification of land-use estimates based on satellite data in developing countries. It can be difficult to distinguish deforested areas from fallow agricultural areas and pastures, the report said. It also pointed out that while both EPA and CARB are proposing to assign indirect GHG emissions to corn ethanol, there appears to be no such inclusion of indirect GHG emissions for petroleum. For example, the report cited a study by the Congressional Research Service that estimated the indirect military costs associated with securing petroleum from foreign regions, which in 1992 was estimated at $56 billion to $73 billion. However, there were no estimates of the GHG emissions associated with that military support.

The ACE report also argued that the single GHG value assigned to petroleum is inadequate. GHG reduction targets are expressed relative to the GHG emissions standards for fossil-based fuels. Thus, the RFS requirement for ethanol is a 20 percent reduction in GHG emissions when compared with gasoline. Cellulosic ethanol is required to meet a 60 percent reduction target. ACE suggested that the GHG emissions from increased ethanol production be compared with the GHG contributions from new crude oil sources. The lead author of the ACE report, John Kruse, director of agricultural services for IHS Global Insight Inc., says while they weren't able to find data on deep-sea oil drilling, the GHG emissions associated with tar sands production is well documented. Depending on the source of energy used in the process, the mining of tar sands can increase GHG emissions over 300 percent compared with conventional crude oil.

There are other problems with the models, according to Kruse, including the use of data from a period of stable, low commodity prices, with predictable supply/demand relationships. The experience of the past couple of years has been quite different. According to the models, the impact of last year's high prices should have resulted in a reduction in exports, Kruse says. "In 2007, we'd have to say that didn't happen," he says. "We had record exports for corn, soybean exports were respectable and wheat exports were near record." Calculating indirect impacts is a reach, Kruse adds. "There is not the scientific data, nor the accuracy in measurements nor robustness in economic models."

Flaws in the Premise
There are two parts to the critique of the indirect land-use effect, says Bruce Dale, professor of chemical engineering and developer of cellulosic ethanol technology at Michigan State University. One is the technical—the science and the data used to make the assessment—and the other is philosophical. On the technical side, Dale says a group of about 30 scientists and other interested parties from around the world debated the issue while developing principles and criteria for the Roundtable for Sustainable Biofuels, for which Dale chairs the technical committee on GHG emissions. "After arguing among ourselves for six months we came to the conclusion you can't reliably measure indirect impacts."

Dale's concerns go beyond the technical issues, however, to the philosophical. "Is it a good idea to make the U.S. responsible for indirect effects around the world?" he asks. The concept goes beyond supply-chain analysis to market effects, he says. "No one person is responsible for the market," Dale adds. The logic would hold U.S. biofuels producers responsible not only for their own GHG emissions, but for the GHG emissions of their competitors. Bruce supports the efforts to encourage sustainability goals, but he cautions, "We make progress by holding people responsible for their own actions. In holding people responsible for actions of people elsewhere in the world, you can stifle innovation."

Furthermore, the argument doesn't hold up, Dale says. If it is indeed right to hold the U.S. responsible for indirect effects around the world, "we shouldn't be doing anything that would increase land use elsewhere and we need to get CRP lands back in production," he says. The CRP, which holds wide support from the agricultural and environmental communities, was started decades ago to set aside crop land with the dual goals of enhancing the environment and reducing price-depressing crop surpluses.

Another underlying assumption to the indirect land-use argument is that agricultural markets drive land-use change. Critics wonder how much is attributable to biofuels demand. Dale points out that in many developing countries, the building of roads stimulates land conversion to grow crops that can now be transported to markets. Not to mention that the conversion of rain forests began long before biofuels expansion by the logging industry to supply lumber to the construction industry, Kruse adds.

In each country where rainforest conversion has raised international concerns, there is a complex set of factors involved. Kruse uses Indonesia as an example, where internal government policies have long encouraged oil palm expansion as a means of raising the country out of poverty. Culturally, palm oil is seen as a source of wealth and a hedge against inflation. "It's not biofuels that have driven that expansion," Kruse says. "It's not as clean cut as to say we're going to assign the indirect land-use impacts to American biofuels and we'll fix that problem in Indonesia. Indonesia is going to fix that policy in Indonesia."

The arguments critical of the science and philosophy behind measuring indirect land-use change presented here highlight only a few of the many being brought forth by organizations and individuals who caution policymakers not to put policy ahead of the science in the laudable goal of addressing climate change.

The arguments from those supporting the concept are equally complex, but are summarized in a letter to the EPA from a coalition of environmental nonprofit
groups. "Consideration of all of the science in an open and transparent comment process will be key to ensuring that the regulations accomplish the emissions reductions Congress intended when they directed that indirect emissions from land use changes be included," the letter said. The group, consisting of the Environmental Defense Fund, the National
Wildlife Federation, the Natural Resources Defense Council, Friends of the Earth, the Union of Concerned Scientists and the Environmental Working Group, argued that indirect land-use change is the "ripple effect" resulting from converting land from food production to fuel production.

"There is no doubt that greenhouse gas emissions caused by land use change are substantial, and that those associated with renewable fuel production can easily make the difference between reducing or increasing GHG emissions relative to gasoline," the letter stated. Rather than stunt the advanced biofuels industry by including indirect land-use changes to the policy, the group asserted that the inclusion of such changes will help determine which second-generation feedstocks will have the least impact. "Properly done, accounting for indirect land-use will improve the ability of investors and developers to distinguish promising approaches from dead ends and drive investments and innovation towards these feedstocks and technologies," the group stated.

It remains to be seen which of the two sides will prevail, and as the world's economy worsens one wonders whether the issue might be put on the back burner.

Susanne Retka Schill is an Ethanol Producer Magazine staff writer. Reach her at sretkaschill@bbiinternational.com or (701) 738-4922.