Contradictory EISA mandate could hurt corn ethanol and biodiesel

The Energy Independence and Security Act (EISA) of 2007 (1) requires a gradual increase in the volume of various kinds of biofuels to be blended with U.S. motor fuels in the next several years.  The gradual increase was designed to provide time for technology development and industry growth.

Simultaneously, the EISA also requires a one-step adjustment in greenhouse gas (GHG) reductions, rather than a gradual phase-in which would reflect technological progress. The EISA also makes the assumption that the GHG emissions that are used to evaluate biofuels will be unchanged in the future.

According to Dr.Robert Wisner, a biofuels economist with the Iowa State University, these two different sets of mandates are now on a collision course.  He contends in the June newsletter of the Agricultural Marketing Resource Center that if changes are not made, their different paths could slow or halt the growth of some parts of the biofuels industry.  The sectors of the industry to be most immediately affected are Midwest corn-starch ethanol and biodiesel from vegetable oils, according to him.

With progress in the GHG regulations activity, the U.S Environmental Protection Agency (EPA) and the California Air Resource Board (CARB) have also become involved. California is moving more quickly than the rest of the nation in establishing regulations for GHG emissions and is has developed GHG assessments for different types of biofuel. According to Wisner, the agencies are moving too fast in relying on unproven indirect land use emission impacts.

Indirect land use is based on the presumption that when an acre of land is diverted from production for feed and food to biofuels, that at least a portion of that acre will to be added to food and feed production somewhere else, either in the U.S. or abroad.  It is assumed that additional cropland will be needed and that it is most likely to come from diversion of rainforest or pasture in tropical areas to food and feed production. This assumption is at the center of an intense debate on how to measure emissions and land use.

Arguing from a perspective that contradicts popular opinion, Wisner contends that these calculations ignore the fact that technological advances are changing the status quo, with reduced emissions from biofuel refineries, increased crop yields per acre, changes in livestock and poultry feed conversion efficiency that reduce feed needs per animal, the amount of crop residue left on soils etc.

The proposed CARB regulations acquire greater significance when seen in the context that California is potentially the largest market for biofuels and the fact that 13 other states are giving thought to adopting those same standards. President Obama has advocated a uniform national standard for GHG emissions, which makes Wisner worry that California's advanced standards could become the national benchmark as well.