Groups say CAFE standards could stymie biofuels industry

Source: Amanda Peterka, E&E reporter • Posted: Monday, July 2, 2012

Proposed fuel economy standards could hamper the U.S. biofuels industry, a coalition of rural energy proponents and farm organizations said yesterday.

In comments filed with U.S. EPA, the groups warned that the new corporate average fuel economy standards, commonly known as CAFE standards, eliminate incentives to use biofuels. In addition, the standards do not adequately value the reduced greenhouse gas emissions possible through the use of biofuels, they said.

“These oversights place the rule in conflict with other established national priorities, policies, and legislation,” wrote the groups.

Submitting the comments were the 25x’25 Alliance, American Council on Renewable Energy, American Seed Trade Association, Association of Equipment Manufacturers, American Farm Bureau Federation, Biotechnology Industry Organization, National Association of Wheat Growers, National Farmers Union and National Sorghum Producers.

The Obama administration has proposed raising fuel economy standards to 54.5 mpg by 2025; the standards currently are set to increase to 35.5 mpg by 2016. A final rule on the increase is likely to come this summer.

Ethanol and other advanced biofuels, as well as the continued production of flex-fuel vehicles, are “critical” to expanding the use of renewable fuels and lowering greenhouse gas emissions, the groups argue.

“The proposed rule effectively eliminates statutory incentives intended to promote their use,” read the comments. “Moreover, it appears to pick favorites by providing much more generous credits to other ‘advanced vehicle technologies,’ such as electric and plug-in hybrid vehicles.”

The groups also argued that the proposed rule does not take into account the full life-cycle greenhouse gas emissions reductions possible through the use of ethanol.

According to a statement released with the comments, the groups will be meeting with EPA and the National Highway Traffic Safety Administration “to press their case.” They also plan to meet with the Department of Agriculture and the State Department to discuss the proposed rule’s effect on commodity prices.