CARB Eases LCFS’ Corn Ethanol ‘Penalty’ But Fails To Placate Industry

Source: By Curt Barry, Inside EPA • Posted: Sunday, December 14, 2014

SACRAMENTO, CA — California air board officials are proposing to slightly lower the level of greenhouse gas (GHG) emissions estimated to come from indirect land-use change (ILUC) caused by corn-ethanol production under the state’s low carbon fuel standard (LCFS).

But the board’s revised plan is doing little to placate the ethanol industry, which says the revised factor should at least be halved because officials are not accounting for new studies showing a lower impact from land-use changes.

California Air Resources Board (CARB) officials last week unveiled their latest draft proposal to amend the LCFS regulation in several ways, including by lowering the ILUC factor for corn ethanol while revising it for several other biofuels, including sugarcane ethanol, soy biodiesel, canola biodiesel, sorghum ethanol and palm biodiesel.

CARB is scheduled to release a final proposal by Dec. 16 and adopt the amendments in February.

California’s LCFS generally requires fuel providers to reduce the carbon intensity of gasoline and diesel 10 percent by the end of 2020, compared with a 2010 baseline. The ILUC figure represents the GHG impacts from land-use changes in other parts of the world to grow more corn or other feedstock for biofuel production or food in the U.S. and other countries such as Brazil.

To calculate a fuel’s carbon intensity, CARB adds the ILUC number to the fuels’ direct GHG emissions, derived from producing and transporting the fuels.

State regulators are proposing the program be extended to 2030, requiring an additional 10 to 15 percent reduction in carbon intensity. Companies can comply by blending cleaner fuels, such as ethanol and biodiesel, into gasoline and diesel and by purchasing credits generated by utilities and other companies that provide natural gas, electricity or hydrogen for transportation purposes.

The state’s LCFS carries even more importance because it is being used as a model for programs in Oregon and Washington.

The LCFS’ current ILUC factor for corn ethanol is 30 grams of carbon dioxide (CO2)-equivalent emissions per megajoule (g/MJ). CARB has for months been developing an update to the factor based on new data, assumptions and complex modeling work. Some of the complex factors CARB uses to calculate the ILUC levels include “yield price elasticity, cropland pasture elasticity and the elasticity of crop yields with respect to area expansion.”

CARB staff proposed in March that the assumed ILUC GHG level for corn ethanol should be reduced to 23.2 g/MJ. And in September, CARB staff released preliminary results from newer studies using different approaches and assumptions about a variety of factors, resulting in an updated proposal to lower the ILUC factor to a range of 21.6 to 25 g/MJ, under two scenarios investigated.

And in yet another draft revision unveiled at a Nov. 20 workshop in Sacramento, CARB proposed to further lower the ILUC for corn ethanol to 20 g/MJ.

ILUC ‘Penalty’

Despite CARB’s plan to further lower the value, industry representatives charge that board officials are ignoring new data that justify further lowering what they call the ILUC “penalty” for corn ethanol.

The latest revised proposal “showed that CARB is taking baby steps in the right direction, but their result on corn ethanol continues to be the outlier because they refuse to recognize the latest data and science on certain model parameters,” says an industry source.

For instance, new modeling runs from Purdue University, Argonne National Laboratory and the University of Illinois “put corn ethanol ILUC in the range of 6-14 g/MJ,” the source says. “And a paper published last week by Iowa State shows that the overwhelming response to higher crop prices in the last 10 years was to use existing cropland more efficiently, not to convert forest and grassland.”

In addition, one of the ways farmers have used land more efficiently is to “double-crop the same acres,” the source says. “CARB’s model has no way of accounting for this.”

CARB staff during the Nov. 20 workshop generally defended their work but admitted that certain information and data that may have been produced by more recent relevant studies have not been considered in the latest proposal.

John Courtis, manager of CARB’s alternative fuels section, said during last week’s meeting that board staff has plans to work with several university researchers in the coming months to investigate newer studies, but that some of this work has been delayed or hampered by a “limitation on resources” at the board. In addition, CARB staff are still reviewing some of the newer papers that have been released by researchers on the ILUC factors, he said.

Earlier this year, a group of scientists and researchers mostly based in the Midwest said in a letter to CARB Chairwoman Mary Nichols that the latest science supports an ILUC level for corn ethanol of between 6 and 15 g/MJ, levels that the group claimed would create a significant incentive for increased blending of ethanol to help refiners comply with the LCFS.

With regard to ILUC levels for the production of other biofuels covered under the LCFS, CARB staff is proposing to lower the factor for sugarcane ethanol from the current 46 g/MJ to 19.6 g/MJ; lower the soy biodiesel factor from 62 g/MJ to 27 g/MJ; and establish new factors for canola biodiesel of 14.5 g/MJ, sorghum ethanol of 12.7 g/MJ and palm biodiesel of 46.4 g/MJ. —