EPA’s Office of Inspector General to Investigate GHG Impacts of Renewable Fuel Standard

Source: By Jessie Stolark, EESI • Posted: Monday, October 19, 2015

On October 15, the EPA’s Office of Inspector General announced that it would research the greenhouse gas (GHG) impacts of the Renewable Fuel Standard (RFS).  The role of the RFS in reducing U.S. GHGs has been under intense scrutiny since EPA proposed reducing the statutory volumes of renewable fuels in 2013. Finalized volumes for the RFS for 2014, 2015 and 2016 are expected to be released November 30.

Under the RFS, renewable fuels are categorized by their greenhouse gas reduction potential, as compared to traditional petroleum-based fuels. When the RFS was signed into law, Congress mandated lifecycle GHG reduction targets for renewable fuels and instructed EPA to oversee this process. This ‘well-to-wheels’ assessment, considers cumulative GHG emissions derived from each step of fuel production, and is commonly referred to as lifecycle analysis.

For a refresher on ‘wells-to-wheels’ accounting, check out EESI Policy Associate Jessie Stolark’s recent presentation on the topic.

According to OIG, the investigation will cover two areas pertaining to the RFS: 1) if EPA is complying with reporting requirements of the law, and 2) if EPA has updated lifecycle analysis.  Like any science, lifecycle analysis has been evolving since the EPA constructed some of the first models in 2009.

Under the RFS, corn-based ethanol must have a GHG reduction of 20 percent relative to gasoline, cellulosic ethanol must be a 60 percent reduction. According to more recent modelling studies conducted by DOE’s Argonne National Lab, the lifecycle emissions of corn ethanol is on average, 24 percent less carbon intensive than gasoline. Cellulosic ethanol may be up to 96 percent lower than gasoline, but EPA’s modelling is woefully out of date.

The news would appear good for the biofuels industry, particularly corn and cellulosic ethanol producers, since they have long requested that EPA consider updated GHG lifecycle data, which is more favorable to their product. However, OIG will also consider a 2011 report on biofuels from the National Academy of Science, and EPA’s 2011 Report to Congress on the Environmental Impacts of Biofuels.

Both reports are considerably more mixed on biofuels lifecycle emissions than information coming from DOE and other independent research.  According to the National Academy of Science report, “the extent to which RFS2 contributes to lowering global GHG emissions is uncertain.”   In EPA’s 2011 Triennial report, EPA concluded “the extent of negative impacts [from the RFS] to date are limited in magnitude [and] are primarily associated with the intensification of corn production.”

EPA will be required to submit to the Inspector General an updated Triennial Report to Congress, required RFS Antibacksliding Analysis (to ensure that air quality is not worsened), and planned or future changes to EPA’s lifecycle analysis, based on the National Academy of Sciences study and recommendations.

The investigation comes at a time when the call to cut corn-based ethanol from the RFS is getting louder. The anti-RFS community has stepped up their efforts ahead of the November 30 deadline.  Yet, seeing more cellulosic fuels may not be as simple as cutting corn ethanol from the RFS. According to the think-tank Third Way, 80 percent of cellulosic ethanol capacity has been developed by corn ethanol companies; the two industries are quite intertwined at this point.

Arguments that cutting corn ethanol would incentivize more cellulosic fuels also ignores the logistical and refining difficulties that are unique to cellulosic fuels – which are currently being solved by the industry. Additionally, with or without the RFS, petroleum refiners would likely blend 10 percent ethanol (E10), using the cheapest form of ethanol available – currently, that’s corn-based ethanol.

Therefore, getting to increased cellulosic gallons is actually supported by continuing to produce corn-based ethanol, which is capped at 15 billion gallons in the RFS. Attempting to remove corn ethanol from the RFS may prove to be a bit like throwing out the baby with the bathwater. Cellulosic companies have said repeatedly that if the EPA reduces the volumes required, they lose incentive to produce domestically.  Instead, these companies will look abroad to develop under more favorable regulatory environments.

For more information see:

Watchdog to study ethanol’s environmental impact, The Hill

Cellulosic Ethanol is Getting a Big Boost from Corn, for Now, Third Way

Biofuels and the Environment: the First Triennial Report to Congress (2011 Final Report), EPA

Renewable Fuel Standard: Potential Economic and Environmental Effects of U.S. Biofuel Policy (2011), National Academy of Sciences