Groups Exploring Potential Midwest LCFS Collaborative

Source: By Jordan Godwin,OPIS • Posted: Friday, February 15, 2019

ORLANDO, Fla. — The Renewable Fuels Association (RFA) has been involved in preliminary conversations around the possibility of a collaborative effort of Midwest states seeking to establish a Low Carbon Fuel Standard (LCFS) program similar to the West Coast Collaborative, RFA President and CEO Geoff Cooper said Tuesday.

In an interview with reporters at the National Ethanol Conference here, Cooper revealed that discussions have taken place but that they have been only exploratory so far.

Cooper said that in the early days of California’s LCFS program, there was a strong “fear of the unknown” factor among ethanol producers regarding how their industry and ethanol demand in that state would be affected.

“But today, our industry is embracing that program,” Cooper said. “They’re seeing value in that program and they are able to capitalize on that program from monetized carbon.”

Cooper said those incentives that ethanol producers are now increasingly realizing as more and more producers get approval for pathways into California to receive LCFS credits has led to a new conversation in the Midwest about the possibility of bringing a similar program to the key biofuels producing states.

“Believe it or not, there are conversations starting in the Midwest about a low-carbon fuel program similar in nature to what we see on the West Coast because of” the value, Cooper said. “We do see opportunities at the state level, especially when you look at the inertia and impasse around federal policy over the last several years.”

Cooper said the states that have been involved in those early discussions include Minnesota, Iowa, potentially South Dakota and possibly others if the conversations begin to generate more momentum.

“There are places where the politics and the dynamics look like they might be conducive to this type of program moving forward, but again, it’s very early,” Cooper said. “No decisions have been made or anything like that, but a conversation has definitely started.”

Cooper said that the Minneapolis-based Great Plains Institute has been serving as the “ringleader” for the early discussions. Great Plains Institute Vice President Brendan Jordan was a panelist on a Tuesday afternoon session, “Ethanol’s Role in Securing a Low Carbon Future.”

Jordan said that with respect to the job California has done with the LCFS, it would likely make sense to have a slightly different regional approach in the Midwest.

“Our economy is different, our resources are different, and we’re going to have to get engaged and figure out what kind of system we would want to have,” Jordan said. “There are other policy frameworks that deal with transportation emissions that are not as inclusive of biofuels as the clean fuel policy or low-carbon fuel policies. It’s a policy framework that presents an opportunity for this industry to win and to do really well.”

On the same panel, California Air Resources Board (CARB) Executive Officer Richard Corey emphasized that while the electrification of vehicles will play a key role in the reduction of greenhouse gas emissions, liquid fuels are not likely to disappear anytime in the near future. He said higher blends of ethanol in the gasoline pool such as E15 can further reduce petroleum consumption and play a larger role in meeting CA emissions and air quality goals.

Moderator Chris Hessler, partner at AJW, joked to Corey that if California supposedly hates ethanol and especially hates Midwest ethanol, why is he speaking at the National Ethanol Conference.

“Who have you been talking to?” Corey said with a grin. “I’ve heard the same thing, but the bottom line is, ethanol has not only been in our fuels for a long time, but ethanol is part of the solution. We’re convinced of that. I’m convinced of that.”

 

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