Ethanol supporters in the US and Australia and first-gen fuels advocates of conventional ethanol and biodiesel in the EU are striking out against what they see as misguided reports that have appeared across three continents this week — all aimed ultimately at derailing mandates that support market access for biofuels.
In the US: looking at ethanol plant impact on crop acreage
In the US, Renewable Fuels Association senior vice-president Geoff Cooper is hitting out hard against anew study funded in part by the National Wildlife Federation, that “argues that many corn ethanol plants were built in the middle of the native grassland prairie of the Great Plains, away from the cropland that grows the corn needed to make ethanol.”
“If you were going to build a timber mill, would you put it in the middle of a desert, far away from the trees? Cooper asked. “ If you were going into the orange juice business, would you build your processing plant in Maine, thousands of miles from the citrus groves of the Gulf Coast? Of course not. So, why on earth would you build a grain ethanol plant where there isn’t any grain? You wouldn’t.”
The authors then use highly uncertain and error-prone satellite data to suggest that much of the “native grassland” around these ethanol plants was converted to cropland between 2008 and 2012 to support increased ethanol production. They assert that the well-documented national trend toward less cropland is covering up these purported “pockets of [land] conversion” near ethanol plants, and they claim their satellite data supports this notion.
Of course, anyone who was around during the ethanol plant building boom will recall that proximity/access to corn was the top consideration in determining where to build a new plant. Simply put, ethanol plants were built where the corn was grown, and where underutilized cropland resources (e.g., idle or fallow cropland, low-margin crops) could be switched back into grain production (in rare cases, “destination plants” were built in locations near ethanol demand centers with attractive logistics where corn was already being shipped).
Testing the data
To test the NWF study’s theory regarding “pockets of conversion” around ethanol plants, RFA examined USDA county-level cropland data for the 180 counties where 199 grain ethanol plants were located in 2016. RFA relied on data that is mandatorily reported every five years by farmers and ranchers.
The USDA data reveal that consistent with the national trend, the overwhelming majority of counties with ethanol plants witnessed reductions—not expansions—in cropland between 1997 and 2012. Specifically, RFA found:
• Cropland in the counties with ethanol plants fell by 2.02 million acres, or 3.5 percent, between 1997 and 2012.
• Between 2007 and 2012 specifically (i.e., encompassing the period examined by the NWF study), total cropland in counties with ethanol plants fell by 454,000 acres, or 0.8 percent.
• On an individual county basis, 2012 cropland levels were below the levels recorded in 1997, 2002, or 2007 in the large majority (84 percent) of the counties with ethanol plants. The reduction in cropland for these 151 counties averaged 11.8 percent when compared to the highest level of cropland from 1997, 2002, or 2007.
• For the small minority (16 percent) of counties with ethanol plants where 2012 cropland was higher than the amount of cropland recorded in 1997, 2002, or 2007, the increase in cropland was minor (3.1 percent on average) and coincided with reductions in Conservation Reserve Program (CRP) land and pastureland.
• Most of the counties with ethanol plants where 2012 cropland exceeded 1997, 2002, or 2007 levels are located in the heart of the Corn Belt, not the western fringe where undisturbed grassland is more common. This provides more support for the argument that expanded cropland in these counties replaced land with previous agricultural history (such as CRP or pasture)—not prairie or other native lands.
The fight in the EU over phasing out conventional first-gen fuels
In the EU, FEDIOL (representing the European Vegetable Oil and Proteinmeal industry) questions the EU Commission’s proposal for a Renewable Energy Directive post-2020 and the main objectives it was initially conceived to achieve. The Directive, as proposed, would fail to reduce GHG emissions, would increase the EU’s dependency on fossil fuels and would eliminate an important market outlet to the agricultural sector.
FEDIOL points out that the Commission’s decision to phase out conventional biofuels as of 2020 outlines a reduction path which should bring the share of biofuels such as rapeseed biodiesel down to 3.8% by 2030. “In the absence of any blending obligations, there is no reason for fuel suppliers to include conventional biofuels in their energy mix any longer” – claims Director General Nathalie Lecocq. “As a consequence, the decreasing trajectory set by the Commission will most likely entail an even sharper and quicker phase out for those feedstocks, putting at risk 220,000 jobs in the EU biofuel sector and depriving farmers of a vital revenue”.
Further difficulties in the development and availability of advanced feedstocks, linked with a lack of confidence by investors in view of the uncertain policy context, make the target set for advanced biofuels overly ambitious and highly unlikely to be achieved. For these reasons, FEDIOL calls on the European Parliament and Council to maintain the 7% cap for conventional biofuels and further invest in advanced low-carbon technologies alongside conventional biofuels, so as to meet an overall minimum 15% renewables’ target in transport.
To support the statement in its position paper and analyse the implications of a potential phase out of conventional biofuels, indeed, FEDIOL produced a detailed Impact Assessment entitled “Implementing the Commission’s proposal on conventional biofuels: the consequences for agriculture and industry”.
The study quantifies the huge financial losses that a slowdown or halt in rapeseed production would trigger throughout the production chain: cutting a total of 16 million tons of rapeseed crush as well as 2.7 million tons of soybean crush out of production would cause the closure of almost half of the EU crushing plants, representing around 10,000 direct jobs. This would result in the loss of more than 9.6 million tons of rapeseed meal and 2.1 million tons of soybean meal. The cumulative loss in turnover would be in the order of €16.9 billion for farmers, €22.5 billion for crushers and €11.7 billion for compound feed manufacturers over the assessed 5-year period, with continuous losses also thereafter.
Finally, a factsheet called “An EU without first generation biofuels? Impact on the oilseed and agricultural markets” provides a graphic adaptation of the Impact Assessment, describes the benefits of biofuel production and addresses some misperceptions linked to it.
Over to Australia
In Australia, a recent Regulation of Australian Agriculture, Productivity Commission Inquiry Report made the assertion that biofuel mandates impose an unnecessary cost on farmers and consumers, for ‘negligible environmental benefit’.
The Managing Director of Queensland Renewable Fuels Association, Larissa Rose, said QRFA contests as these comments made by the Productivity Commission do not represent facts.
“In making these claims the Productivity Commission has drawn flawed conclusions from poor evidence. Suggesting that agribusiness will suffer from biofuel mandates when it is a key diversification market for agriculture, is completely inaccurate,” Ms Rose said. “With Australia already importing more than 90 per cent of our petroleum crude and finished products, supporting measures that will further increase our dependence on foreign oil is irresponsible as are suggestions of importing biofuels from countries like Brazil as mentioned in the Inquiry Report.”
By the Productivity Commission’s own figures, farming businesses use 86 per cent diesel, a fuel completely unaffected by ethanol mandates. “In fact the opposite is true – it is the very products these (agricultural) businesses produce that are the feedstock for biofuels – creating sales, supporting business and boosting jobs,” Ms Rose said.
“This is exactly what Australian’s biofuel refineries do – support our nation’s regional economy and provide us with low carbon fuel.
“It is misleading to state that biofuel mandates raise the price of petrol. E10 fuel is a 94RON fuel, a premium product in many respects that delivers lower emissions. The so-called higher cost is principally due to increasing – and frequently unnecessary – uptake of ‘premium’ 95 and 98 fuels. Now motorists are beginning to understand that you can get a higher octane fuel more cost-effectively with E10,” said Ms Rose.
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