Today in Biofuels Opinion: “Federal support of the ethanol industry 1, God 0″

Steve Everly in the Kansas City Star: “I spoke to a church group a couple of weeks ago and the issue that sparked the most discussion was federal support of the ethanol industry.”

From Meghan Sapp in Sugaronline.com: “ILUC is one of the unluckiest words around. And it’s looking to get unluckier. ILUC, or Indirect Land Use Change, is the latest fad to hit the biofuels scene and has become more controversial than Sharon Stone’s famous leg-crossing scene in Basic Instinct. The basic (no pun intended) idea is that land used for maize ethanol production in the US could potentially cause the Amazon to be deforested for soybean production. Or biodiesel production in Italy could force deforestation in Finland. Or any number of hundreds of hypothetical land use change situations.”

The main point here is that they’re “indirect,” therefore the actual producer of the biofuels has no control over what some farmer in another part of the world does. It completely goes against the standard bearer for international environmental regulation that “the polluter pays.”
But there’s several sub-points here. One is that science has yet to determine how indirect land use changes can be monitored, let alone how to put into an across-the-board calculation to add to lifecycle analysis of a specific biofuel. So it’s still completely hypothetical. Another is that no one is entirely sure how many “indirect” effects should be included in such a calculation. Or why biofuels should be subjected to such a thing when fossil fuels are not. Or any other agriculture industry, for that fact.

People first really started to worry about this whole ILUC “thing” when some decidedly green, anti-biofuels proponents in Europe managed to get the concept included in the European Union’s Renewable Energy Directive last year. At first there was going to be an across-the-board penalty added on to the GHG emissions reductions calculations for any biofuels attempting to enter Europe. The kibosh was thankfully put on that, as it would have added 48 grams of CO2 per megajule of energy. For the scientifically less inclined, basically it would have required all Brazilian ethanol—which currently has the highest GHG reductions for any first generation biofuel—to included costly Carbon Capture & Storage to any production facility seeking to export to Europe.

That got dropped, luckily, but the concept wasn’t. So the European Commission was given until the end of 2010 to come up with a way to account for ILUC in the actual GHG calculations being used by the EC. That’s leaving the bureaucrats in Brussels scrambling to find a way to account for ILUC without knowing what it really means or how to calculate it. There’s several options on the table, none of which are particularly palatable and all of which have a deadline. “Consultation” is set to start in October with a final answer ready for next March.

Of all the concepts the EC is looking at in terms of ILUC, the one that is decidedly most frightening is the one thought to be the “simplest.” Basically, if all agricultural products have to abide by the EU’s sustainability criteria, then theoretically there would be no indirect land use change. Or at least in terms of agricultural products that would seek to reach the EU market, including inter-EU production (which is easily handled by the Common Agriculture Policy regulations) and imports from everywhere. It’s a global revolution in the making. It’s not just the Commission itself who are promoting this idea, but now the European Bioethanol Producers Association (eBIO) are on board as well.

Let’s just take a minute to outline a few concerns that agricultural producers should have with this idea. The main tenets of the sustainability criteria include a whole host of “no go” areas, basically biomes where biofuels can’t be produced. That would be expanded to food production as well. That in theory sounds fine, until you get to the nitty gritty which means all production areas would have to be mapped back to whenever the legislation said (in the case of biofuels, it’s Jan. 1, 2008) to prove that the land used didn’t used to be a “no go” area. Then there’s the cost of not only the mapping, but the verification by a third-party auditor to prove that all the rules were followed. The only way this could be even remotely feasible was if all agricultural products being exported to Europe were produced in plantation style, not only destroying small farmers but destroying biodiversity as well.

Back to Brussels. Another “simple” idea, and by far makes the most sense at the moment, is not including a figure for ILUC at all but figuring that the high minimum standards for GHG reductions—35% in 2010 to 60% in 2017—are already high and include whatever indirect effects there may be. The logic here is that “not as good” biofuels are already excluded from the market because of the minimum threshold, and as it’s those less efficient biofuel feedstocks that are creating the likelihood for the most land conversion, the problem is solved.

The inclusion of so many vague terms, like likelihood and figuring and theoretical, is because that’s exactly what this concept of ILUC is. There have been many high level, big-brained discussions of what ILUC should include because the potential indirect effects that would cause a soybean farmer to deforest the Amazon are numerous. These effects could include everything from international land use policies, to biofuel blending policies, to food security and related policies, to food culture in general. The list is extensive, and no one is entirely sure how far that list should be extended. Then there’s the trick of how to account for that list, then formulate them into a simple number for inclusion in GHG calculations.

If this was just a “European problem,” that would be one thing, but it’s not. Now the Americans are in the ILUC game, causing further confusion and consternation. The US’s Environmental Protection Agency has to come up with a way for it to account for ILUC as well. That’s because the concept was included in the 2007 legislation boosting blending to hundreds of gazillions of gallons of ethanol over the next decade or so. But in response to the proposed solution for accounting for ILUC, politicians and scientists alike have come out against it. The proposed methodology supposedly targets biofuels made from specific feedstocks, most notably maize, sugarcane and soy. In fact, the ILUC penalty that would be imposed on GHG calculations would completely eliminate soy biodiesel from the American market. That’s pretty impressive since the American threshold is only 20% GHG savings compared to the 35% the Europeans put in, so the soy figures must be pretty miniscule.

Last week, a bipartisan group of American senators sent a letter to the head of the EPA demanding for some immediate sense when it comes to the ILUC issue. Their reasons? The science doesn’t exist, anything that’s included now would just be arbitrary, future policy changes on a national or international scale can’t be accounted for, and the best one of all—including ILUC doesn’t in any way promote improved technologies for reducing GHG emissions. Why would ethanol producers spend money to improve their technologies, or include things like biogas or co-generation, if there was no stability in policy to guarantee future demand? Because it’s arbitrary and irresponsible, that’s why.

Earlier this month, 100 of the country’s top scientists sent a letter to California Governor Arnold Schwarzenegger asking him to stop his California Air Resources Board from going down the slippery ILUC slope. The California situation is a little different than the federal one. In 2007, Schwarzenegger signed an executive order instituting the state’s own standards for greener fuels because he felt the Bush Administration wasn’t doing a good enough job on a national level. It was then up to the CARB to come up with the rules to implement the order Schwarzenegger demanded, but nowhere was ILUC mentioned. Basically it was a case of bureaucratic rule-makers also deciding they were policymakers by including ILUC—and the figure that goes along with it. It’s turned into quite the mess, especially as the CARB is supposed to roll out the final rules around 25 April. More than a year before the Europeans get around to it.
All this talk on ILUC doesn’t even begin to approach how ILUC should or should not be applied to fossil fuels, but that’s a fascinating discussion for another column. Stay tuned.

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