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June 25, 2019
Renewable fuels have small impact on GHGs

GAO cites cellulosic biofuel and land-use changes

For the second time in 3 years, the U.S. Government Accountability Office (GAO) has cast doubt on whether the federal Renewable Fuel Standard (RFS) is having any more than a negligible effect on U.S. emissions of greenhouse gases (GHGs). There is no argument that renewable fuels, when combusted in gasoline-powered vehicles, release fewer GHGs than traditional petroleum-based fuel. In fact, the RFS states that GHGs released by conventional corn-based ethanol used for fuel must, on a life cycle basis, be at least 20 percent below GHG emissions from petroleum-based fuel. However, the RFS contemplates the use of multiple types of renewable fuel, including cellulosic ethanol, which must achieve life cycle GHG emissions at least 60 percent lower than petroleum-based fuels.  As it did in its previous report in November 2016, the GAO continues to point out that the development of cellulosic and other advanced biofuels has not progressed as initially expected under the RFS. The slow progress has resulted in the RFS having a “limited effect, if any, on GHG emissions,” the GAO states.

Other factors working against the GHG benefits of the RFS are changes in land use to grow more corn to manufacture ethanol and a grandfathering exemption from the RFS for cornstarch ethanol plants in operation or under construction before December 19, 2007.  These issues must be incorporated into any GHG life cycle analysis (LCA) of a renewable fuel. Also, renewable fuel LCAs are burdened with uncertainties—particularly measuring the indirect effects of land-use changes.

As it did in 2016, the GAO based its 2019 assessment of the RFS and GHG emissions on the views of experts the GAO selected based on their published work, prior GAO work, and recommendations from other experts. In reviewing a draft of the 2019 report, the U.S. Department of Agriculture (USDA) said this methodology—the opinions of individuals rather than a synthesis of the latest research—was simply a way to collect divergent views and eliminated the possibility of forming “definitive consensus statements about the impacts of the RFS and corn ethanol on GHG emissions.” The GAO’s researchers also solicited views on the effect of the RFS on emissions from officials at the USDA, the Department of Energy, the EPA, and “relevant” industry stakeholder representatives.

The GAO’s two reports addressed different aspects of the RFS. For example, the 2016 report discussed the RFS’s E10 blend wall and the controversy surrounding the introduction of E15 (gasoline with 15 percent ethanol) into the market. The May 2019 report  covers the RFS’s impact on gasoline prices, as well as issues associated with renewable identification numbers (RINs), the RFS’s compliance currency. However, regarding the effect of the RFS on GHG emissions, in the 2019 report, the GAO basically repeats what it said in 2016.

“The RFS’s reliance on corn-starch ethanol to fill biofuel mandates has limited the ability of the RFS to reduce GHG emissions,” states the GAO. “Specifically, as we reported in November 2016, most of the biofuel blended to date has been conventional corn-starch ethanol, which has a smaller potential to achieve GHG reductions compared with advanced biofuels.”

Two goals

Congress enacted the RFS as part of the Energy Policy Act of 2005 and 2 years later expanded it in the Energy Independence and Security Act of 2007 (EISA). The RFS generally mandates that transportation fuels (typically gasoline and diesel) sold in the United States contain annually increasing amounts of fuels produced from renewable sources, such as agriculture—rather than through geological processes, such as those involved in forming petroleum. The EPA, which is responsible for implementing the RFS, can waive the statutory volumes and establish its own, if warranted. The most common biofuel currently produced in the United States is corn-starch ethanol, which is distilled from the sugars in corn. The EPA says the goals of the RFS are to (1) expand the nation’s biofuel sector while reducing reliance on imported oil and (2) reduce GHG emissions.

Types of biofuels

The RFS established statutory GHG reduction requirements for specific types of biofuels divided into two broad categories—conventional and advanced.

  • Conventional biofuel, predominantly corn-starch ethanol, from new facilities must achieve life cycle GHG emissions at least 20 percent lower than traditional petroleum-based fuels.
  • Advanced biofuels are derived from algae or sugar cane—but not cornstarch—and must achieve life cycle GHG emissions at least 50 percent lower than traditional petroleum-based fuels. This category includes:
    • Biomass-based diesel that has life cycle GHG emissions at least 50 percent lower than traditional petroleum-based diesel fuels; and
    • Cellulosic renewable fuel—derived from any cellulose, hemicellulose, or lignin—which has life cycle GHG emissions at least 60 percent lower than traditional petroleum-based fuels.

While there has been modest progress in the growth of biomass-based diesel, the situation is different for cellulosic fuel.

 “Growth has occurred in cellulosic biofuels during the last several years,” the Energy Information Administration noted in December 2018, “but at a much lower rate than originally envisioned by Congress. The EPA’s 2019 final RFS rule set the cellulosic biofuel mandate at 418 million gallons, or about 5 percent of the 8.5-billion-gallon target envisioned by the Energy Independence and Security Act of 2007.”

Given the stubborn challenges associated with the cellulosic biofuel, the EPA has exercised its cellulosic waiver authority to reduce the target for this renewable fuel every year since 2010.

Life cycle assessments

GHGs are directly released at each stage of a fuel’s life cycle, which, for biofuels, includes the emissions associated with growing the feedstock, transporting it, converting it to a biofuel, distributing the biofuel, and burning it in an engine. These types of emissions are all related to the production and use of the fuel and are called direct emissions. Other emissions are released indirectly through broad economic changes associated with increased biofuel use, such as changes in land use wherein farmers convert native grassland and wetlands to acreage suitable for growing corn. These land-use changes release carbon dioxide into the atmosphere.

Life cycle GHG emissions from biofuels cannot be directly measured, so they are estimated using mathematical models that account for direct and indirect GHG emissions at each stage of the life cycle. Experts the GAO interviewed generally agreed that the models used for life cycle analyses have improved over time and can provide reasonably accurate estimates of certain components of direct life cycle GHG emissions.

But the experts also said that that there are limitations and uncertainty associated with all life cycle analyses. There continues to be significant disagreement over the land-use changes that have occurred and continue to occur to produce corn ethanol. For example, a USDA economist cited several studies indicating that although additional acres have been brought into corn production as a result of ethanol demand, the land-use change impacts weren’t nearly as drastic as once thought. But in a study sponsored by the Center for Growth and Opportunity at Utah State University, a researcher states that the RFS “leads farmers to convert vast tracts of land, including previously unfarmed land, to corn farming and to unsustainably intensify production on existing farms.” This researcher also conceded that “measuring the lifecycle [sic] emissions of any fuel is exceedingly difficult, and measurements will vary substantially on the basis of what technologies are being employed, where the fuel is sourced, and other considerations. For these reasons, a wide variety of estimates exist for ethanol’s lifecycle emissions.”

Ethanol predates the RFS

To summarize, following are the main points made in the GAO’s 2019 report:

  • Most of the experts interviewed agreed that, to date, the RFS has likely had a limited effect, if any, on GHG emissions. Furthermore, the RFS is unlikely to meet the GHG reduction goals envisioned for the program through 2022. Regarding the RFS and GHG emissions to date, experts noted that the effect has been difficult to assess precisely, and the GAO found disagreement among some experts about whether the effect has been positive or negative. However, most experts agreed that the effect—whether an increase or decrease—has likely been limited.
  • It is incorrect to attribute GHG reductions from the use of ethanol entirely to the RFS. Most experts agreed that ethanol use predated the RFS, in part, because of favorable market conditions and other policies, including state biofuel mandates and ethanol tax credits. Ethanol also became popular as an oxygenate in gasoline following the phaseout of methyl tertiary-butyl ether (MTBE), which was found to be contaminating sources of drinking water. The experts added that they believed that the RFS had “some effect on biofuel production” by creating a guaranteed market for biofuels. Although experts’ views differed on the amount of ethanol that would have been produced without the RFS, most of them said that ethanol production capacity would likely be lower today if the RFS had not helped to establish markets.
  • The vast majority of the corn-starch ethanol used to date has been produced by grandfathered plants—those in operation or under construction before the statutory threshold date of December 19, 2007—that have been exempt from RFS emissions reductions requirements. Grandfathered plants have limited the ability of the RFS to achieve GHG emissions reductions, but this effect has changed over time. Early on, when a higher percentage of grandfathered ethanol plants used coal as an energy source and had older technologies, the EPA estimates that ethanol from such plants produced more GHG emissions than petroleum-based gasoline. However, most of the GAO’s experts said that over time, grandfathered plants have upgraded their technologies to remain economically competitive and have converted to natural gas as an energy source, resulting in industrywide efficiency improvements that reduce GHG emissions.
  • The experts disagreed on whether corn ethanol produced today generally complies with the RFS statutory requirement to reduce life cycle GHG emissions by 20 percent compared to emissions from petroleum-based gasoline. The GAO states:
  • “Of the 11 experts commenting on the topic, approximately half said that ethanol produced today likely met the 20 percent RFS GHG reduction requirement. Most of these experts pointed to recent LCAs. Recent studies have found that, relative to petroleum-based gasoline, corn-starch ethanol could reduce lifecycle [sic] emissions by 19 to 48 percent. While there are limitations and uncertainty associated with all lifecycle analyses, most experts we interviewed said that the models used for LCAs have improved over time and can provide reasonably accurate estimates of certain components of direct lifecycle greenhouse gas emissions, such as emissions associated with the energy used for farming and for producing the biofuel in a plant. Of the roughly half of experts who said that corn-starch ethanol likely does not meet the RFS greenhouse gas reduction requirements, almost all pointed to the potential for indirect emissions associated with biofuel production and use.”
  • In addition to land use, there may be an indirect effect associated with fuel markets. “For example, increasing biofuel use in one part of the world could increase the relative supply of petroleum in other parts of the world, thereby lowering petroleum prices and increasing use of petroleum products there,” says the GAO.
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