Does EPA’s Left Hand Know What Its Right Hand Is Doing on Octane and CO2?

By Brent Erickson, Executive Vice President, BIO

The Environmental Protection Agency (EPA) has begun to examine boosting gasoline octane ratings to achieve greater greenhouse gas emission control standards for passenger vehicles after 2025. Higher octane ratings would enable increased fuel efficiency in cars that have high-compression engines, giving American drivers better performance at the lowest cost while reducing CO2 emissions. In theory cellulosic ethanol, which has now entered the fuel market, should be the octane enhancer of choice, since it achieves the greatest greenhouse gas reduction.

But it is puzzling that while EPA is considering boosting octane going forward, it is also wavering on the Renewable Fuel Standard (RFS), the policy designed to help the country reach the full potential of cellulosic ethanol and ensure that it is widely commercially available by 2025. The oil companies would prefer to supply hydrocarbon octane enhancers. The problem is that more petroleum would not reduce CO2 emissions significantly and may actually increase them. For its part the environmental community would rather see low carbon biofuels be used for octane boosting. So EPA should get the RFS back on track to ensure that the nation achieves long-range goals for carbon emission reductions.

EPA is already working with the National Highway Traffic Safety Administration (NHTSA) and the California Air Resources Board (CARB) to test current and future engine and powertrain technologies, looking for the best combination to decrease carbon emissions and improve fuel efficiency. The agencies are actively seeking solutions to greenhouse gas emissions that balance the costs and benefits to consumers and the market availability of the various technologies. EPA is also working with industry stakeholders – automakers and fuel producers – and many agree that increased engine compression coupled with higher octane fuels represent the least-cost method to meeting the dual goals. General Motors, for one, estimates that improving an engine’s compression ratio has virtually no impact on the final cost of a passenger vehicle. And designing the engine for higher ethanol fuel blends is no different than today’s flex fuel vehicles.

Deploying new engine standards in conjunction with higher advanced biofuel blends will require a coordinated effort among stakeholders. Even so, it is the most easily achieved solution to curb emissions and increase efficiency. Stillwater Associates estimates the cost of deploying new fuel pumps for higher blends of ethanol (such as E30) at less than a penny per gallon. Consumers, though, would see lower costs for fuel through increases in fuel efficiency and additional benefits through better engine performance and fewer tailpipe emissions. Higher ethanol blends reduce particulate emissions, displace sulfur and benzene in gasoline, and reduce fuel evaporation. A solution to transportation emissions in cars that consumers will want to drive should be high on EPA’s list of priorities.

Meeting the need for more cellulosic ethanol, the lowest carbon fuel available today is within the biofuel industry’s reach as long as the EPA remains committed to the policy that has enabled our success. Thanks to the RFS, cellulosic ethanol is now being produced and sold in the United States. POET-DSM’s Project Liberty in Emmetsburg, Iowa; Quad County Corn Processors in Galva, Iowa; INEOS Bio in Vero Beach, Florida; and Abengoa in Hugoton, Kansas, have all started up commercial production. More than 1.3 million gallons have been produced so far in 2015. Other plants in Brazil and Italy are producing cellulosic ethanol, and DuPont is working to complete construction in Nevada, Iowa, this year. These and other companies invested billions of dollars to meet the goal that Congress set. But the sad fact is that EPA’s delays and missteps in administering the RFS have undercut the next crucial round of investment in commercializing the technology.

BIO estimates that $13.7 billion worth of investment in advanced biofuels has been left sitting on the sidelines over the past several years while EPA has delayed issuing RFS rules. Investors have walked away from discussions to build additional cellulosic ethanol plants, working from the proved designs of the first-of-a-kind facilities now operating. Worse, EPA continues to propose giving oil companies a tool to undermine the RFS, allowing them to avoid deploying any new infrastructure needed for higher ethanol blends. Setting the blend wall in regulatory stone could block future efforts to improve fuel efficiency and carbon emission standards, if the use of higher octane fuels is included in the plan. One of the primary purposes of the RFS is to open the transportation fuel market to alternatives and to competition, breaking the monopoly of the incumbent oil industry. But EPA is proposing to allow them to use their market dominance to block competing fuels from the pump. EPA should quickly and resolutely act to tear down the ethanol blend wall.

We believe EPA should continue to work toward increasing the use of high-octane fuels in conjunction with deploying high-compression vehicle engines as the most readily accessible solution to increasing fuel efficiency and reducing carbon emissions in the transportation sector. This solution provides benefits to American drivers through lower costs, improved engine performance, and decreased tailpipe emissions. Cellulosic ethanol should be the octane source of choice, given that it is the lowest carbon fuel available. And thanks to the RFS, it has the potential to be widely available by 2025 to meet new vehicle standards. It is critically important for people at EPA headquarters to understand that cellulosic biofuels cannot be used in the future unless the production is ramped up now. EPA must act to put the RFS back on track to ensure that potential remains viable for future carbon reduction goals.