Ethanol may lose out to new law

C&I Issue 9, 2009

Californian officials have adopted regulations designed to reduce carbon emissions from transportation in the state by restricting fuels that generate high levels of CO2 over their lifetime. But this has drawn criticismfrom the US corn ethanol industry,which says the regulation penalisesit unfairly and could threaten up take of biofuels.


The Low Carbon Fuel Standard(LCFS), adopted by the CalifornianAir Resources Board (ARB) on 23April 2009, will limit the ‘carbonintensity’ of transport fuels on theCalifornian market from 2011.Carbon intensity is derived from  the sum of the greenhouse gasesemitted during the entire life ofa fuel, including its production,transportation and consumption.The state will monitor the carbonintensity of fuels in 2010 to generate a baseline. From 2011, the limit willbe lowered each year, with the goal of reducing average greenhouse gas emissions from transport fuels by10% by 2020.


‘The new standard means wecan begin to break our century old dependence on petroleum,’says ARB chairman Mary Nichols.Over 1.5bn gallons of biofuels will be needed, requiring over 25 new biofuel facilities and 3000 new jobs,according to the ARB.


But the corn ethanol industry says the regulation unfairly burdens biofuel companies by making them accountable for their indirectemissions, while other companies are not. According to trade organisation Growth Energy, the LCFS contains a‘penalty’ that links deforestation to biofuel production for the purposes of calculating carbon intensity. ‘The inclusion of an indirect land use change penalty against ethanol is not based on universally accepted science, puts our industry at an unfair disadvantage and would likely lead to increased dependence on foreign oil and stall efforts to create a greener economy,’ says ceo Tom Buis.


In a letter sent to GrowthEnergy the day before the decision was taken, Nichols said that cornethanol will play an ‘importantrole in helping California achievethe goals of the LCFS’. She alsocommitted the ARB to an ‘ongoing investigation’ of the indirect effects of all fuel, a move Growth Energy has welcomed.


The transport sector accounts for40% of the greenhouse gases emitted in California and 11 other states are now considering similar regulations.

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