CARB to reduce ILUC for corn ethanol

By Kris Bevill | November 15, 2010
Posted Nov. 22, 2010

The California Air Resources Board has decided to re-evaluate its greenhouse gas emission modeling regarding indirect land use change (ILUC) considerations for ethanol. The current model used in the state's low carbon fuel standard (LCFS) includes life cycle analysis calculations which result in a higher carbon rating for corn ethanol than for gasoline. The decision to re-evaluate the model was made during a board meeting held Nov. 18, during which CARB staff determined they should adopt a form of modeling created by Purdue University.

Purdue's model, which was funded partially by the U.S. DOE and originally presented to CARB by the Renewable Fuels Association in May, reduces corn ethanol's ILUC impact by one half over CARB's current value. The vastly improved carbon rating stems from updated information used by Purdue that was not included in CARB's initial model, including economic data, cropland pasture data, valuation of distillers dried grains, and estimated crop yields.

While the decision to re-evaluate the ILUC model is a win for ethanol producers, it won't be finalized until after the LCFS goes into effect next year. This could cause confusion in the marketplace and complicate compliance with the LCFS, according to the RFA. "We're encouraged that CARB is moving in the right direction and is finally living up to its commitment to use the best available science for the LCFS," RFA President Bob Dinneen said. "However, we're concerned that the changes to ILUC won't be effective until midway through 2011, by which time the LCFS will have been up and running for several months. Why would CARB begin a program on Jan. 1 that is based on ILUC numbers that they now freely admit are wrong and inflated? They have better science and they should use it now - before the 2011 compliance year begins."

CARB has said that 2011 should be considered an "implementation year" for the LCFS. Affected parties will be required to reduce their carbon intensity rates by .25 percent from the baseline carbon intensity of gasoline. Under CARB's current model, corn ethanol produced in dry mills fueled by natural gas has a baseline carbon intensity rating that is nearly 3 points higher than gasoline's baseline. By reconsidering the ILUC calculations for ethanol, the carbon intensity rating will be lowered to a level that will allow refiners to use ethanol to comply with LCFS requirements. "If CARB is going to reduce the land use change penalty, that's going to have a significant effect on the carbon scores of various sources of ethanol," said Geoff Cooper, vice president of research at the RFA. "It could take Midwest corn ethanol from being no better than gasoline or worse than gasoline to being 10 to 20 percent better than gasoline."

Chris Thorne, communications director for Growth Energy, said CARB's decision to reevaluate its ILUC model illustrates the flaws in the notion of ILUC. "What the Expert Working Group and the CARB staff are showing us with these decisions is that there are grave doubts about the entire scheme of indirect land use change, which penalizes clean fuels in America for the pollution created by foreign producers," he said.

UNICA, Brazil's ethanol and sugarcane industry association, also supports CARB's decision to re-evaluate ILUC and said it believes a reconsideration will benefit sugarcane ethanol. "As California regulators have previously confirmed, sugarcane ethanol is a low carbon renewable fuel that can significantly reduce greenhouse gas emissions," said Joel Velasco, UNICA's North America representative. "We are certain that sugarcane's contribution to mitigating climate change will only improve in the years ahead, in part because of policies such as the LCFS that encourage better performance and deployment of cleaner, more sustainable technologies."

CARB has called for its Expert Working Group to conduct additional analysis of yield response to higher crop prices and emissions factors before it determines ethanol's final carbon intensity rating in the spring. The RFA has determined that if CARB adopts the emissions factors used by the U.S. EPA in its revised renewable fuel standard, the overall carbon intensity rating of ethanol will be reduced even further.