Ethanol industry leaders concerned by low carbon fuel standard implications

By Erin Voegele | June 03, 2009
On April 23, the California Air Resources Board voted to adopt the state's proposed low carbon fuel standard (LCFS). The regulation, aimed at diversifying the variety of transportation fuels available within the state while boosting the market for alternative-fuel vehicles and reducing greenhouse gas emissions, requires refiners, importers and blenders of fuel within the state to ensure the fuels they provide for the California market meet an average declining standard of carbon intensity.

Under the regulation, indirect land use change effects are assigned only to biofuels. CARB's decision to assign these indirect effects unilaterally to biofuels has drawn criticism from leaders in the ethanol industry. Although CARB has agreed to convene an expert work group to assist the board in refining and improving the land use and indirect effects analysis of transportation fuels, industry leaders have expressed concern that the regulation will unfairly penalize the ethanol industry.

"Adopting this standard sets a dangerous precedent about the application of unproven science to industries across the country," said Bob Dinneen, president and CEO of the Renewable Fuels Association. "This standard is based on flawed analysis and selectively enforced penalties against biofuels only. In unfairly penalizing ethanol, CARB is relegating California to more petroleum use as biofuels are the only viable alternative liquid fuel."

According to Growth Energy CEO Tom Buis, ethanol is a low carbon fuel, and Growth Energy supports the development of low carbon fuel standards, however it believes California is unfairly assigning indirect land use change effects to biofuels, while other fuels are assessed by direct effects only. "The inclusion of an indirect land use change penalty against ethanol is not based on universally accepted science, puts our industry at an unfair disadvantage and would likely lead to increased dependence on foreign oil and stall efforts to create a greener economy," he said.

The American Farm Bureau Federation released a statement in response to CARB's vote stating the board is unfairly punishing biofuels, and has created greater market demand for imported petroleum products. "American-grown renewable fuels have shown in study after study they are good for the environment," said Bob Stallman, president of the AFBF. "Renewable fuels provide a greater degree of domestic energy security, and they are creating economic opportunity for rural America."

The National Farmers Union agrees that the LCFS will increase dependence on fossil fuels. "A fairly and appropriately crafted low carbon fuel standard could spur opportunities for renewable fuels, but California's scientifically dubious interpretation of international indirect land use change is an unnecessary setback to reducing our dependence on fossil fuels," said NFU President Roger Johnson. "There is currently no clear scientific understanding of international indirect land use impacts. Until there is better scientific certainty, and analysis accounts for all fuels including petroleum and natural gas, the inclusion of indirect effects should be delayed."

Bob Dickey, president of the National Corn Growers Association, argues that California's LCFS does not take into account trends that show an increase in corn yields. "Board members ignored important estimates of corn yield growth trends as well as the expertise of more than 100 scientists, who disagreed with the proposal's one-sided focus on indirect land use changes that will only penalize biofuels," he said.

Alternatively, the National Resources Defense Council praised CARB for voting to adopt the LCFS, stating the regulation marks the dawning of cleaner fuels for America. "Business as usual is not going to work for the ethanol industry, and we hope that they will meet this challenge with the same spirit of innovation that makes California the center of clean technology," said Roland Hwang, transportation program director for the NRDC. "The ethanol industry needs to become a bridge—not a roadblock—to America's clean energy future."