EPA's biogenic emissions rule could affect entire ethanol industry

By Kris Bevill | October 14, 2010
The U.S. EPA is in the process of reviewing nearly 7,300 comments it received in response to its unexplained inclusion of biogenic emissions in its final greenhouse gas (GHG) Tailoring Rule. Historically, biogenic emissions—those that occur as a result of the combustion or decomposition of biological materials—have been considered carbon neutral and have therefore been excluded from GHG regulations worldwide. The EPA followed that protocol when it proposed the Tailoring Rule, but by the time the rule was finalized in May, it had decided to include biogenic emissions when accounting for total GHG emission levels. The effects of this inclusion could be disastrous for many industries, including ethanol, as evidenced in comments filed with the agency.

"The equal treatment of biogenic emissions and petroleum-based emissions creates a clear disincentive for manufacturers of alternative fuels, and will adversely affect their ability to obtain permits in a timely fashion, require additional capital to install emission controls, limit production flexibility and diminish capacity for market expansion to meet increasing renewable fuel standard blend volume requirements," said Valero Energy Corp., in its comment to the EPA. Approximately one-third of the corn that enters ethanol plants is converted to CO2 as a result of fermentation. Those emissions have typically been discounted as being carbon neutral, but if the EPA's rule stands as is, they will soon have to be factored into the facility's GHG emissions. Valero cited calculations that show the fermentation process at a 50 MMgy plant releases 157,000 tons per year of CO2. When combined with other emissions, a production facility that size would emit approximately 277,000 tons per year of CO2. This would place nearly every ethanol plant in the U.S. within the constraints of the EPA's Tailoring Rule, which will subject all sources that emit more than 100,000 tons per year of CO2 equivalent to permitting requirements beginning July 1.

"Every bushel of corn produced releases 17 pounds of CO2, so they are significant emissions and including them in the Tailoring Rule or any other greenhouse gas accounting framework greatly exaggerates the carbon intensity of our industry," said Geoff Cooper, vice president of research for the Renewable Fuels Association. Many ethanol plants with operating capacities of 100 MMgy or greater will already be subject to the Tailoring Rule because they emit more than 100,000 tons per year of GHG emissions without including biogenic emissions. But Cooper said the entire industry will be negatively affected if biogenic emissions calculations continue to be a requirement, as will every other biomass-using industry. "The inclusion of biogenic emissions annihilates any rationale for doing a renewable electricity standard, so it's a much broader issue than just biofuels," he said. The potential for this inclusion to hamper a growing renewable energy industry becomes even greater if the EPA's regulations were to be carried over into some type of national cap and trade system, he added. "If an ethanol producer has to have offsets for biogenic emissions, then it hits everybody hard. The implications go far beyond a Tailoring Rule."

The National Corn Growers Association pointed out that it has long been the policy of the EPA, as well as the European Union and the U.N.'s Intergovernmental Panel on Climate Change, to consider biogenic emissions carbon neutral."NCGA strongly feels that the supporting science is appropriate for EPA to continue to consider biomass fuels and fuels produced from biomass as carbon neutral as the IPCC and others do," the group said. "Reversing the long-standing principle of biomass carbon neutrality would not be a correct policy response."

Groups such as the Environmental Defense Fund as well as hundreds of private citizens, most of whom are concerned about proposed biomass-to-power facilities in their areas, said there is no such thing as "carbon neutral" emissions and all emissions should be accounted for, regardless of their origin. The Environmental Defense Fund applauded the EPA for recognizing the importance of "accurately accounting" for GHG emissions from biogenic sources in its final rule, although it did confess that not all biogenic feedstocks are equal. The group recommended the EPA devise a method to account for each biogenic feedstock separately and take into consideration carbon shifts across regional landscapes. Other groups continue to suggest entire life-cycle analysis calculations. "Obviously, that is not practical, it's not scientifically justified and, frankly, it's lunacy to think our industry could do something like that," Cooper said.

It is unclear when the EPA will complete its analysis of the comments received. According to the EPA, as the rule currently stands applicable sources of GHG emissions from all sources and fuels, including biogenic emissions, will be subject to permitting requirements beginning Jan. 2.