Issue brief analyzes RFS2 rule

By Susanne Retka Schill | January 04, 2010
Posted Feb. 5, 2010

Two days after the U.S. EPA released the final rule to implement the renewable fuels standard as revised in the 2007 Energy Bill, EPM received an issue brief from the Renewable Fuels Association that further analyzes the EPA decisions in the rule.

By far the most contentious issue in the proposed used was the life cycle analysis (LCA) used to estimate greenhouse gas (GHG) emissions which included emissions from international indirect land use change. As a result of several enhancements to the EPA LC, the GHG performance of newly constructed, "average" corn ethanol plants improved considerably, "and all new (that is, non-grandfathered) corn ethanol is now considered compliant with the Energy Independence and Security Act of 2007 requirement that conventional biofuels reduce GHG emissions by at least 20 percent relative to baseline gasoline," the issue paper says. In the proposed rule, corn ethanol was found to actually have slightly increased GHG emissions compared to the baseline gasoline. Several changes in the final rule show the average GHG emissions from new corn ethanol plants reduce emissions by 21 percent.

What changed?

Since ethanol plants existing prior to the passage of EISA were grandfathered in, EPA redid its analysis using only new plants and found a range of reductions between 7 percent and 32 percent, with the midpoint of the range being 21 percent.

The RFA dug into the details of what else changed in the analysis, with some improving the results for corn ethanol and some showing a negative impact.

Much was made of the outdated yield data used in the EPA proposed rule. "The FAPRI model now includes an elasticity factor for yields to respond to changes in prices over time both in the U.S. and internationally," the issue paper explains. However, that factor is significantly lower than anticipated and thus has less of a positive impact.

The treatment of distillers grain credits was changed to assume that 1 pound of distillers grains will replace 1.196 pounds of total corn and soybean meal in beef and dairy rations in 2015. The higher displacement ratio is phased in gradually from 2007 to 2015. For swine and poultry, the displacement ration remains 1:1 although EPA now assumes more soybean meal is displace that in previous analyses, "which has the effect of reducing necessary soybean acres."

The FAPRI model was updated to include additional agricultural detail in Brazil, plus the EPA greatly expanded the satellite date used to determine the types and locations of indirect land use change. The satellite data used for the final rule also spanned a longer time frame than the date used for the proposal.

The effect of these improvements, along with others, was to reduce by half the emissions from international land use change included in the corn ethanol LCA. However, those improvements were offset by other revised calculations that increased GHG emissions.

The RFA was critical of EPA's decision to use a 30-year timeframe in its analysis, instead of the 100-year time frame that RFA says would have resulted in corn ethanol GHG reductions closer to 35 percent. "The EPA provides very little scientific rationale," the RFA argues. "The decision appears largely arbitrary."

Another modification from the proposed rule increased the emissions from fertilizer production and use, apparently the result of using DAYCENT modeling runs conducted after the proposed rule was published. "Thus the new modeling results have not been made available to the public for review and comment," the issue paper says. "Because N2O emissions are highly uncertain, this is a significant problem."

The RFA commented on other fuel pathways in the final rule. All modeled cellulosic biofuel pathways far exceed the 60 percent GHG reduction requirement in EISA. Corn stover ethanol results in reductions of 130 percent GHG for biochemical conversion and 93 percent for thermo-chemical conversion. Switchgrass-derived ethanol reduced GHG emissions by 110 percent for biochemical conversion and 72 percent for thermo-chemical conversion.

RFA charged that Brazilian sugarcane ethanol benefited disproportionally from the EPA's revised LCA. In the proposed rule, U.S. corn-based ethanol and Brazilian sugarcane ethanol were found to induce roughly the same amount of indirect land use change. In the final fuel, while corn ethanol's international indirect land use impact dropped in half, sugarcane ethanol's international indirect land use change impacts dropped 93 percent.

Another contentious area in the proposed rule was EPA's proposal to require biofuels producers to keep feedstock records to prove the biomass came from qualifying lands. The final rule eliminates that for agriculturally-derived feedstocks (crops and crop residue). The EPA will assume all crops and crop residues used for biofuels came from existing cropland as long as total U.S. cropland does not expand beyond a baseline level of the 402 million acres of cropland in 2007. Feedstock supply reporting would be required if the national figures show conversion of cropland is occurring. EPA did retain the proposed rule's prohibition of qualifying biomass from rangeland.

Another notable change in the final rule was EPA's decision to drastically drop the 2010 renewable volume obligation for cellulosic ethanol to 6.5 million ethanol-equivalent gallons.

More information on the details will emerge in the weeks ahead as everyone impacted by the final rule digs into the hundreds of pages of text to learn just what the final rule contains.