Increasing the Role of Advanced Biofuels in the US
The Renewable Fuel Standard celebrated its 13th anniversary earlier this year and remains a foundational energy policy that enhances America’s energy security and improves the environment. Brazilian sugarcane biofuel producers are proud of the modest but important role they have played helping make the RFS a success, especially when it comes to supplying the U.S. with clean, advanced biofuels that offer superior environmental benefits.
While, as of my deadline for this column, the final RFS volume requirements for 2019 are unclear, it is safe to say that the U.S. EPA appears poised to take another step in a positive direction for advanced biofuels. Especially if the agency stays true to its proposed 12 percent increase for advanced biofuel blending requirements with at least 100 million of those 4.88 billion gallons provided by Brazilian sugarcane ethanol.
But EPA could still strengthen the RFS in ways that would encourage advanced biofuels to play a greater role greening the U.S. transportation sector. Here are our top two suggestions.
• Expect more from advanced biofuels
We think the volume requirements should be even higher. Because under the right market conditions and with appropriate regulatory incentives, the advanced biofuel industry—including Brazil’s sugarcane industry—could produce more.
EPA designates sugarcane ethanol from Brazil as an advanced biofuel because it reduces greenhouse gases by at least 61 percent compared to gasoline. Brazil currently produces more than 7 billion gallons of sugarcane ethanol each year, and typically makes between 400 million and 800 million gallons of its annual production available for other countries to import.
But Brazil could export considerably greater volumes of sugarcane ethanol to the U.S. In the past, Brazil has exported a record of 1.35 billion gallons to the U.S. in one year (2008) and 164 million gallons in one month (September 2008). At a mere 100 million gallons, EPA is underestimating the volume of sugarcane ethanol that can be made available to the U.S. market under the right conditions.
• Create new incentives for the cleanest fuels
One way EPA could help nudge those market conditions into a more favorable posture is by creating an incentive program that would give extra credit to the most climate-friendly biofuels. The RFS statute clearly grants EPA this authority, but to date, the agency has not exercised it.
As a potential model, EPA need look no further than its program for regulating greenhouse gas emissions from motor vehicles. Under these regulations, vehicle manufacturers are required to meet fleet-wide average emission standards. The fleet-wide average is generally determined by taking the weighted average of the emissions associated with each vehicle produced by a manufacturer.
EPA regulations, however, create an incentive multiplier for electric and other advanced vehicles, which allows manufacturers to double-count these vehicles for purposes of determining their fleet-wide average.
Even though the Clean Air Act does not specifically contemplate such a multiplier, EPA determined it could create such an incentive to “promote the penetration of certain ‘game changing’ advanced vehicle technologies.”
We encourage EPA to create a similar incentive for game changing advanced biofuels that exceed minimum RFS requirements.
In the past six years, nearly 1.3 billion gallons of sugarcane ethanol imported from Brazil flowed into American vehicles. During this time, sugarcane ethanol comprised only 1 percent of all renewable fuels consumed by Americans, but provided more than 6 percent of the entire U.S. advanced biofuel supply. Brazilian sugarcane producers take pride in this track record of success and are eager to contribute even more.
The RFS is now a teenager, and EPA must continue to play a thoughtful role guiding the program through unavoidable growing pains. We hope the agency will stay laser focused on fostering the development of advanced and cellulosic biofuels.