transforming us biofuels - worldwatch institute

ja n e ear l ey and a l i c e mckeown

WORLDWATCH REPORT 180

Red,White, and Green:

TransformingU.S. Biofuels

ja n e ear l ey and a l i c e m ckeown

l i s a ma st ny, e d i t o r

Red,White, and Green:TransformingU.S. Biofuels

worldwatch in st i tute , wash ington , d c


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© Worldwatch Institute, 2009ISBN 978-1-878071-90-3

The views expressed are those of the authors and do not necessarilyrepresent those of the Worldwatch Institute; of its directors, officers, or staff;

or of its funding organizations.

On the cover: Advances in technology can help improve current biofuels and developnew alternatives. This near-infrared spectrometer, promoted by the National RenewableEnergy Laboratory, enables researchers to chemically analyze plants and trees in the field,

increasing the speed of the analysis and cutting down costs.Photograph by Bonnie Hames, courtesy NREL

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

The Promise of Biofuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Biofuels in the United States Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Climate and Environmental Impacts of Current Biofuels . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Benefits of “Advanced” Biofuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Making Biofuels Sustainable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Federal and State Biofuel Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

The Road Ahead: Policy Options for Sustainable U.S. Biofuels . . . . . . . . . . . . . . . . . . . . . 30

Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Figures, Tables, and Sidebars

Figure 1. U.S. Biofuel Production, 1990–2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Figure 2. U.S. Corn Used in Ethanol Production, 1980–2008 . . . . . . . . . . . . . . . . . . . . . . . 10

Figure 3. U.S. Corn and Soybean Prices, 2000–09 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Figure 4. U.S. Ethanol and Gasoline Prices, 2005–09 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Figure 5. GHG Emissions Reduction Potentials for Ethanol, by Feedstock Type . . . . . . . . 13

Figure 6. Biofuel Requirements Under the U.S. Renewable Fuel Standard, 2009–22 . . . . 26

Table 1. Biofuel Production by Country/Region, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Table 2. Selected Biofuel Sustainability Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Sidebar 1. Biofuel Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Sidebar 2. Algae for Biodiesel: Third-Generation Biofuels . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Sidebar 3. Technologies for Advanced Biofuels:Biochemical and Thermochemical Platforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Sidebar 4. Biomass and Biofuels: Transitioning Transportation Fuels . . . . . . . . . . . . . . . . 24

Sidebar 5. California’s Low Carbon Fuel Standard: A Model for National Policy? . . . . . . . 29

Table of Contents

Acknowledgments

This report has been through many reinventions, benefiting from a range of experts andresearchers who have made this timely update possible. We are thankful for the continued guid-ance and expertise of Christopher Flavin, President of Worldwatch, and Janet Sawin, Director ofthe Institute’s Energy and Climate Change Program.We also appreciate the contributions of RayaWidenoja, who laid much of the early groundwork for the report, and the numerous outsideexperts, who provided thoughtful input on the report and its recommendations.Special thanks also to Stanford MAP Fellow Amanda Chiu, who researched the figures and

tables and contributed an informative sidebar. Antone Neugass showed great flexibility in hisresearch skills and in finding new data that pulled the paper together. Senior Editor Lisa Mastnyplayed an essential role in commenting on early drafts and moving the draft through production,and Art Director Lyle Rosbotham provided the clean design and layout. The authors also appreci-ate the support of Juliane Diamond, who helped with the important tasks of fact checking and fill-ing in last-minute research holes.Support for this project and the Worldwatch Institute over the past year was provided by the

American Clean Skies Foundation, the Heinrich Böll Foundation, the Blue Moon Fund, theCasten Family Foundation, the Compton Foundation, Inc., the Bill & Melinda Gates Foundation,The Goldman Environmental Prize, the Richard and Rhoda Goldman Fund, the Good EnergiesFoundation, the W. K. Kellogg Foundation, the Steven C. Leuthold Family Foundation, theMarianists of the USA Sharing Fund, the Netherlands Environment Ministry, the NorwegianRoyal Ministry of Foreign Affairs, the V. Kann Rasmussen Foundation, The Shared EarthFoundation, The Shenandoah Foundation, the Sierra Club, Stonyfield Farm, the TAUPO Fund,the United Nations Population Fund, the United Nations Environment Programme, the WallaceGenetic Foundation, Inc., the Wallace Global Fund, the Johanette Wallerstein Institute, theWinslow Foundation, and the World Wildlife Fund–Europe. Support was also provided by thegenerous contributions of more than 3,000 Friends of Worldwatch.

Red, White , and Green www.worldwatch.org4

About the Authors

Jane Earley is an attorney and the managing partner of Earley & White Consulting Group, LLC,where she specializes in the international trade and environmental aspects of standards in interna-tional law. She is currently working on emerging standards for biofuels and agricultural carboncredits and on efforts to address sustainable agriculture in U.S. and international standards. Janehas broad experience in the public and private sectors and with both voluntary and regulatorystandards. She has served as a trade negotiator with the Office of the U.S. Trade Representative, asdirector of the Sustainable Agriculture Unit of the World Wildlife Fund, and as CEO of the MarineStewardship Council.

Alice McKeown is a research associate at the Worldwatch Institute and the director of Vital SignsOnline. She has followed and written about environmental issues for many years and currentlywrites about climate change, energy, and agriculture issues. Her recent publications include a“Climate Change Reference Guide” for Worldwatch’s State of the World 2009 report and articleson genetically modified crops, aquaculture, compact fluorescent light bulbs, and coral reefs. Alicehas a background in environmental advocacy and grassroots organizing, including more than fiveyears of lobbying and policy experience. She has worked extensively on issues surrounding theuse of coal, including climate change, air pollution, and community destruction caused by moun-taintop removal coal mining. Alice supports the local foods movement and is proud to knowher farmer.

Summary

ver the last decade, biofuels havebeen championed in the UnitedStates as a new source of incomefor rural communities, as a way

to reduce dependence on foreign oil, and mostrecently as a solution to the country’s energyand climate change problems. These latter con-cerns are now the main driver behind thepromise of biofuels, leading the United Statesand other governments across the world toencourage greater production and use. But asthe market for biofuels expands, so too do thesocial, economic, and environmental impacts.Rapid growth in biofuels use in the past five

years has contributed to a sharp increase infood, feed grain, and soybean prices in theUnited States and abroad. These price fluctua-tions have fueled a global debate over “food ver-sus fuel.”At the same time, the global economicrecession has led the U.S. biofuels industry tocontract, threatening jobs and livelihoods.Studies suggest that the environmental costs

of producing “first-generation” biofuels suchas corn-based ethanol on a large scale likelyoutweigh the benefits. These costs includeincreased water pollution, the loss of wildlifehabitat, and declining freshwater resources. Ofparticular concern is the link between biofuelsexpansion and the global conversion of landfor agriculture, as biofuel crops compete withforests and food crops for limited land andother resources.Corn ethanol leads to only minimal, if any,

reductions in greenhouse gas emissions, an oft-touted benefit and justification for expandingbiofuels production. Current best estimatessuggest that corn ethanol provides only a 12 to18 percent net reduction in emissions, on aver-

age, compared to gasoline. If land that is richin carbon is converted from forests or othernatural ecosystems to biofuels production,these benefits can fall away completely.These concerns point to a crossroads for the

U.S. biofuels industry. The country must nowchoose between a business-as-usual approachthat worsens environmental and climate prob-lems, or a more cautious approach duringwhich decision makers take the time to “getbiofuels right” before rushing forward withmore production. Taking the more sustainablepath includes an immediate transition to “sec-ond-generation” biofuels while phasing outreliance on unsustainable first-generation fuels.Advanced biofuels can be produced not

just from annual crops, but also from fast-growing trees and grasses as well as from arange of organic wastes and potentially evenalgae. The feedstocks can be grown on mar-ginal land that does not have to compete withfood production and that can be cultivated inways that minimize harmful effects on waterquality and wildlife habitat. These feedstocksmay also require fewer fossil fuel inputs andretain more carbon in their soils than cornand soybeans, enhancing their ability to miti-gate climate change.Research is now under way on the conver-

sion of cellulose to biofuel, and dozens ofentrepreneurs are working to commercializethis and other advanced biofuel technologies.There is no guarantee, however, that the pro-duction of advanced biofuels at a large scalewill be environmentally beneficial, althoughcurrent assessments show much promise.Three broad efforts in U.S. policy would

make biofuels production more environmen-

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the landscape and climate will fuel greateropposition.Although second-generation biofuels are

not a panacea, they offer the prospect of amore sustainable energy future. Getting therewill require careful analysis of biofuel produc-tion, distribution, and use, including alternateways to grow feedstock, power refineries, anduse byproducts. Decision makers should alsoconsider wider transportation solutions suchas more fuel-efficient vehicles, investments inpublic transportation, ways to reduce conges-tion, and urban planning that promotes bikingand walking.The solution to the biofuels challenge is not

simply a matter of substituting different feed-stocks. Rather, it is about finding a new modelthat takes the United States down a truly red,white, and green path.

tally sustainable and help ensure that the use ofbiofuels for transportation contributes to bothenergy security and global efforts to reducegreenhouse gas emissions:1. Spur the rapid development of cellulosicand other advanced biofuels that signifi-cantly reduce greenhouse gas emissions,using existing economic instruments andother tools.

2. Develop sustainability standards and makegovernment support for biofuels conditionalon meeting these standards.

3. Create a holistic energy policy across alltransportation-related sectors.Reforming U.S. biofuel policies will require

overcoming an array of economic forces thatuphold the current industry structure. Presentpolicies reward the least promising biofuels,and if they are not reformed, rising damage to

Summary

* Endnotes are grouped by section and begin on page 34.

7www.worldwatch.org Red, White , and Green

very day, the U.S. transportation sec-tor uses an estimated 14 million bar-rels of oil to power more than 244million cars, trucks, and other vehi-

cles.1* As concerns about energy security andthe nation’s self-proclaimed “addiction to for-eign oil” escalate, the impetus for reducingdependence on petroleum and other fossil-based transport fuels grows stronger.2 Worriesabout climate change add to the alarm, as thetransportation sector now accounts for nearly30 percent of U.S. greenhouse gas emissions.3

Biofuels, which have long been popular withfarmers who see a new market for their crops,are now touted as a solution to the country’senergy and climate problems. The two mostpopular biofuels nationwide are corn-basedethanol and soy-based biodiesel, although bio-fuels can theoretically be produced from awide range of plant and animal feedstocks.4

(See Sidebar 1.)Biofuels research and development has been

under way in the United States since the late1970s, but the industry came into its own onlyin the last decade. As the promise of renewablefuels has been more widely advertised, govern-ments around the world have moved to pro-duce and promote wider use of biofuels.Globally, production of ethanol and biodieselincreased from some 4.8 billion gallons in 2000to 21 billion gallons in 2008.5

Ethanol accounts for the bulk of global bio-fuels production, and the United States andBrazil are the two leading producers, generat-ing the fuel from corn and sugar cane, res-pectively.6 (See Table 1.) As production has

The Promise of Biofuels

E Sidebar 1. Biofuel Basics

The terms biofuel, ethanol, and biodiesel are sometimes usedinterchangeably, but they have important distinctions. In theUnited States “biofuel” is most often used in reference to corn-based ethanol, the main biofuel produced domestically. But thereare many other potential biofuels, including biodiesel, cellulosicethanol, biobutanol, and biogas. When used for transportation,biofuels are not typically stand-alone fuels but are blended intoconventional fuel sources, such as gasoline and petroleum diesel.

Biofuels can be derived from an array of feedstocks usingastonishingly diverse technologies. Currently, the primary feed-stocks fall into three main categories of agricultural crops that arealso used for food:• sugar crops, including sugar cane, sugar beets, and sweetsorghum;

• starch crops, including corn, wheat, barley, cassava, and milo(grain sorghum); and

• oilseed crops, including rapeseed, canola, soybean, sunflower,and mustard.Biofuels are just one form of “bioenergy,” or energy derived

from biological plant and animal matter, which is known collec-tively as biomass. In the United States, biofuel usually refers toliquid fuels for transport, whereas bioenergy or biomass energyis commonly used to describe electricity or heat generated fromrenewable biomass sources.

Conventional or “first-generation” ethanol (e.g., corn ethanol)is made by fermenting sugars from plants with high starch orsugar content into alcohol, using the same basic methods thatbrewers have relied on for centuries. “Second-generation” ethanol(e.g., cellulosic ethanol) is made from more advanced and non-food crop feedstocks, using more sophisticated technologicalprocesses that have to first break down cellulose into sugars.Ethanol is typically found as a blend with petroleum gasoline,although certain modified vehicles (“flex-fuel”) can run on ahigher E85 (85 percent ethanol) blend.

Biodiesel is made by reacting oils with alcohols in a processknown as esterification. In addition to plant feedstocks, biodieselcan be made from animal fats and waste oils. Biodiesel can beused in pure form (B100) or as a blend with petroleum diesel.

Source: See Endnote 4 for this section.

increased, so too has the fuel ethanol trade. In2000, exports represented only some 2.5 per-cent of global production, but by 2007 thisshare had climbed to 8 percent.7 Biofuelsaccount for an estimated 1 percent of globaltransport fuel consumption.8

Global production of biodiesel has grownrapidly as well, although starting from a muchsmaller base. Biodiesel output expanded from230 million gallons in 2000 to 3.9 billion gallonsin 2008.9 The European Union produces nearly80 percent of the world’s biodiesel, largelyfrom rapeseed (Germany is the single largestbiodiesel producer), followed by the UnitedStates, which produces the fuel mainly fromsoybeans.10 Indonesia and Thailand are signifi-cant producers of biodiesel from palm oil.11

Expanding biofuels development has trig-gered worldwide concern about the economic,environmental, and social impacts of thisboom. Rapid growth in biofuels use in the pastfive years has contributed to a sharp increasein food, feed grain, and soybean prices.12 Ofparticular concern is the link between biofuelsexpansion and the global conversion of landto agriculture, as biofuel crops compete withforests and food crops for limited land andother resources. These “indirect” effects of bio-


fuels are only beginning to be understood.13

In the United States, it is clear that the cur-rent biofuels industry, based primarily on cornethanol, is creating a host of problems whilefailing to deliver measurable reductions ingreenhouse gas emissions. Yet U.S. policiescontinue to support the rapid increase in bio-fuels production. The nation’s Renewable FuelStandard (RFS), updated in 2007, requires that36 billion gallons of biofuels be included in theU.S. liquid fuel mix by 2022, including a maxi-mum of 15 billion gallons of corn ethanolfrom 2015 on.14 But industry experts predictthat corn ethanol production could surge wellbeyond this level if oil and fuel prices continueto rise, supporting greater industry expansion.15

The U.S. biofuels industry is at a crossroads.In order to become sustainable over the longterm, it must take aggressive and concertedaction to address the serious environmental,social, and economic concerns that stem fromcurrent biofuels production. It must also workto speed the transition to so-called “second-generation” biofuels derived from agriculturaland forestry wastes and other non-foodsources, which hold greater promise for theenvironment and global climate.

Table 1. Biofuel Production by Country/Region, 2008

Country/ Region Ethanol Biodiesel Total

million million tons of oil million milliongallons equivalent (mtoe) gallons mtoe gallons mtoe

United States 8,982 17.08 711 2.13 9,693 19.21Brazil 6,472 12.31 308 0.92 6,780 13.23European Union (EU-27) 734 1.40 2,113 6.33 2,846 7.73China 502 0.95 41 0.12 542 1.08Canada 238 0.45 26 0.08 264 0.53Thailand 90 0.17 123 0.37 213 0.54Colombia 79 0.15 30 0.09 109 0.24India 66 0.13 6 0.02 72 0.14Australia 26 0.05 18 0.05 44 0.10Rest of World 128 0.24 512 1.53 640 1.78

World 17,317 32.93 3,888 11.66 21,205 44.59



Biofuels in theUnited States Today

in the market share of industry leaders such asPOET, VeraSun, and Archer Daniels Midland.6

In early 2009, the country was home to 193ethanol plants with a combined nameplatecapacity of 12.4 billion gallons.7

Rising ethanol production has led to a sharpincrease in U.S. demand for corn. The U.S.Department of Agriculture (USDA) predictsthat farmers will plant some 85 million acresof corn in 2009–10, down slightly from theyear before but still the third largest acreagesince 1949 (following 2007 and 2008).8 Asmuch as one-third of this corn crop, or 4.2 bil-lion bushels, will be used to produce ethanolin 2009–10, up from only 5 percent in 2000.9

(See Figure 2.) But ethanol’s share of annualU.S. gasoline use is expected to remain rela-tively small: about 10 percent by 2020 and15–17 percent by 2030.10

U.S. biodiesel production has lagged farbehind ethanol in volume, but the industry


Mill

ion

Gal

lons

Source: RFA, F.O. Licht, NBB

0

2,000

4,000

6,000

8,000

10,000

1990 1993 1996 1999 2002 2005 2008

Biodiesel

Ethanol

Figure 1. U.S. Biofuel Production, 1990–2008

* 1.5 gallons of ethanol are needed to displace 1 gallon ofgasoline because of ethanol’s lower energy content.

he U.S. biofuels industry has reallytaken off only in the last decade orso. In the late 1990s, strong initialgrowth in ethanol production

stemmed from the need to find a less toxicsubstitute for the gasoline additive MTBE(methyl tertiary butyl ether), a known ground-water contaminant.1 Since then, U.S. agricul-tural regions have lobbied successfully forpolicies to increase domestic biofuels use asa way to shore up corn prices and stimulaterural development.U.S. ethanol production has expanded rap-

idly over the past decade, although the markethas changed considerably in just the last twoyears as economic conditions have changed.In 2002, producers generated some 2.1 billiongallons of ethanol, and demand barely topped2 billion gallons.2 By comparison, in 2008domestic ethanol production was estimatedat 9 billion gallons, and demand topped 9.6billion gallons, including some 500 milliongallons of imports.3 (See Figure 1.)The increase in ethanol consumption

reduced U.S. demand for motor gasoline byabout 5 percent in 2008.4* While the nation’sethanol market experienced a significantdownturn at the end of the year, and projec-tions for 2009 are more conservative, there isstill considerable potential for growth over thenext few years.As of September 2008, 160 companies were

producing ethanol in the United States, 57more than the year before.5 The addition ofthe new companies contributed to a decline

T


demand for corn ethanol was responsible for10–15 percent of the rise in food prices for theyear ending in April 2008.18 Rising food costsdue to ethanol production are projected to costthe government an additional $600–900 mil-lion in expenditures on federal food assistanceprograms in fiscal year 2009.19

More recently, a sharp decline in oil priceshas put pressure on biofuel producers bysqueezing their profit margins.When oil priceswere high—up to $147 a barrel in July 2008—corn ethanol continued to flourish.20 But as oilfell to $36 a barrel in early 2009, ethanol blend-ing became less attractive and producers werefaced with expensive feedstocks and lower prof-its.21 Domestic demand for gasoline droppedlate in 2008 as well—down 7.1 percent for theyear, the largest one-year decline since recordsbegan in 1950—and the market for ethanolblending eroded further.22 All of these factorsled to high volatility in 2008 in both the whole-sale price of ethanol and in the per-gallonprofit.23 (See Figure 4.)The volatility in feedstock prices, demand,

and profits, compounded with the global eco-nomic downturn and credit crisis of 2008, ledto a shakeup in the U.S. ethanol industry. InOctober 2008, VeraSun, the country’s secondlargest producer with 1.64 billion gallons ofcapacity, filed for bankruptcy, even though it hadbeen a rising star earlier in the year.24 Other U.S.

has expanded rapidly as well. The nation’s bio-diesel producers rely mainly on soybeans andwaste cooking oil as feedstocks, although someare using canola or cottonseed oil.11 As of Sep-tember 2008, there were 176 biodiesel plantsnationwide, with a combined annual capacityof some 2.6 billion gallons.12 Yet productionremains well below capacity: in 2008, domesticbiodiesel output was only 711 million gal-lons.13 Another 850 million gallons of capacityis slated to come online by the end of 2009.14

The rapid expansion in biofuels—particu-larly corn ethanol—has had mixed economicimpacts. One of the more cited effects is thehigher volatility of corn and soybean pricestriggered both by demand-induced priceincreases and by sharp jumps in the price ofoil, a significant input to current systems offood production.15* (See Figure 3.) Estimatesindicate that the high U.S. demand for corn forethanol production accounted for 20 percentof the rise in corn prices in 2008.16

The rising price of corn has caused hardshipfor other U.S. agricultural sectors that relyheavily on corn for animal feed and other pro-ducts, such as livestock and poultry produc-tion and the manufacturing of high-fructosecorn sweeteners.17 In 2009, the CongressionalBudget Office estimated that the increased

Biofuels in the United States Today

* All dollar amounts are expressed in U.S. dollars.

1980 1984 1988 1992 1996 2000 2004 2008

Cor

nU

sed

inEt

hano

lPro

duct

ion

(mill

ion

bush

els)

EthanolShareofC

ornProduction

(%)

Source: USDA

Corn used in ethanol production

Ethanol share of U.S. corn production

0

800

1,600

2,400

3,200

4,000

0

20

40

60

80

100

September–August Market Years

Figure 2. U.S. Corn Used in Ethanol Production, 1980–2008

companies also declared bankruptcy.25 Esti-mates indicate that more than 24 ethanol plantswere shut down or idled between late 2008 andMarch 2009, accounting for about 21 percentof U.S. annual capacity, and the trend wasexpected to continue through 2009.26 Becausemany ethanol companies are privately owned,the full extent of problematic debt and otherfinancial instability remains largely unknown.27

Although investment in corn ethanol wasprofitable for many investors initially, industryconsolidation in recent years has resulted inthe transfer of many locally owned plants fromfarmer cooperatives to large companies.28 Esti-mates show that only some 34 percent of U.S.ethanol facilities were locally owned in 2006—down significantly from earlier years—and thisshare has continued to plummet to no morethan 21 percent in 2009.29 Additional consoli-dation in both the ethanol and biodiesel indus-tries is expected, especially with a worseningeconomy, low or moderate oil prices, and largesell-offs of biofuel assets.30

The loss of local ownership can translateinto fewer benefits for local communities.One study in the state of Minnesota, where asmany as 80 percent of ethanol facilities remainlocally owned, suggests that local ownershipcan increase local economic benefits by 5 to 30percent.31 Local ownership may be particularlybeneficial to farmers, who may earn up to 10times more per bushel from ethanol-relateddividends than from selling the crop withoutdividends and under absentee ownership.32

Another study from Iowa indicates that everyquarter-share of local ownership at an ethanolplant supports some 29 jobs in the local econ-omy (beyond plant operations) during aperiod of high returns.33

The effects of ethanol plants on U.S. jobcreation have been mixed. Industry reportsinitially promised the creation of nearly 700permanent jobs in an area near an ethanolplant, but more realistic estimates may be130–250 permanent jobs during a boom year.34

However, these numbers do not take intoaccount the possible adverse impacts on thefood and livestock industries from the diver-sion of corn to ethanol.35 The Renewable Fuels

Association estimates that the ethanol industrysupported the creation of some 238,000 jobsduring 2007.36

By comparison, U.S. biodiesel plants wereestimated to support more than 20,000 newjobs nationwide in 2007 and some 52,000 jobsin 2008.37 This translates into about 635 newdirect and indirect jobs for every 10 milliongallon plant.38

Future prospects for U.S. job creation fromethanol, biodiesel, and other advanced biofuelsare positive. One study estimates that renew-able transportation fuels could lead to morethan 1.2 million new “green” energy jobs by2038, assuming that infrastructure develop-ment and feedstock growth will support a 30



2000 2002 2004 2006 2008 2010D

olla

rspe

rB

ushe

l

Source: USDA

0

3

6

9

12

15

SoybeansCorn

Figure 3. U.S. Corn and Soybean Prices, 2000–09

2005 2006 2007 2008 2009 2010

Dol

lars

per

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Source: Platts0

1

2

3

4

5

6EthanolUnleaded gasoline

Figure 4. U.S. Ethanol and Gasoline Prices, 2005–09

percent share of renewable fuel demand bythe same year.39 Another study estimates thatinvestment in green jobs, including in thebiomass and advanced biofuel and cellulosicethanol sectors, could lead to the creation of 2million jobs if the country achieves 25 percentlow-carbon fuels content by 2025.40 The U.S.Department of Energy (DOE) projects that forevery 1 billion gallons of cellulosic ethanol thatcomes online, up to 20,000 jobs may be cre-ated.41 Lastly, a study released in early 2009predicts that meeting the advanced biofuelsrequirements of the Renewable Fuel Standardwill create 123,000 jobs (including 29,000direct jobs) by 2012.42

U.S. ethanol producers continue to receivegenerous subsidies (amounting to an estimated$8 billion in 2008) to help maintain produc-tion, but some proponents argue that addi-

tional support is necessary to maintain a viableindustry.43 The global recession and creditcrunch are often cited as hampering the devel-opment of advanced biofuels such as cellulosicethanol.44 One estimate indicates that thenumber of investment banks with a history ofsupporting ethanol development over the lastdecade has dropped from around 20 to onlyfive today.45 Some investors are also reluctantto invest during a time of low or moderate oilprices and weak demand for oil and ethanol.46

These financial uncertainties have been aleading factor in calls to increase the nation’sethanol blending limit, currently set at a maxi-mum blend level of 10 percent ethanol intoconventional gasoline (known as E10). Limit-ing the level of ethanol that can be blendedrestricts the overall amount of ethanol that canbe sold in the United States to about 12.5 billiongallons per year because of the total amountof transportation fuels used.47* Many ethanolproponents have argued that this virtual pro-duction cap—often called the “blend wall”—will soon be reached, necessitating higherblending limits of 15–20 percent to guaranteea larger domestic market for ethanol andencourage more development and investment.48

Changing the blend level is more than a for-mality, and the U.S. Environmental ProtectionAgency and DOE are studying the effects onvehicle engines and the environment of raisingthe blending limit.49 With mounting pressurefrom industry groups and potential supportfrom the heads of both agencies, however,some experts predict that the blend level maybe raised to 12 or 13 percent in the short term,before the full effects are known.50



* A higher-level blend of 85 percent (E85) can be usedonly in specially modified engines and is sold at only asmall number of filling stations across the United States.Including ethanol in every gallon of gasoline in the coun-try is currently impossible due to limitations in produc-tion, distribution, and other issues.

Bioidiesel blends available at a station in Seattle, Washington.

skid

rd

Climate and EnvironmentalImpacts of Current Biofuels

iofuels are considered to be an envi-ronmentally friendly alternative tofossil fuels in part because they havethe potential to emit fewer green-

house gases per mile traveled than gasoline andpetroleum diesel, when evaluated over theentire fuel lifecycle (from field to tank). In the-ory, biofuels could be a “zero-carbon” or “car-bon-negative” energy source because manypotential feedstocks (grasses, trees, and otherplants) continually store carbon in their rootsystems and the soil.In reality, however, current U.S. biofuels

depend on significant fossil fuel inputs thatrelease a variety of greenhouse gases, includingcarbon dioxide and nitrous oxide. These emis-sions occur when fertilizers and pesticides aremanufactured, transported, and applied; whenfossil energy is used to run farm machinery,pump irrigation water, and operate refineries;and when the processed fuel is transported andused.1 Greenhouse gases are also released dur-ing changes in land use, such as when crops aretilled and when new land is cleared for feed-stock cultivation.One way to analyze a biofuel’s climate con-

tribution is by assessing its “fossil energy bal-ance,” or the amount of energy contained inthe biofuel compared to the amount of fossilfuel used to produce it. Estimates of energybalance vary widely among and even withinfuel types, depending on such factors as whereand how the fuel is produced and on specificassumptions used in the studies.2 Mostresearch indicates that biodiesel and otheradvanced biofuels such as cellulosic ethanoldisplay some of the highest lifecycle energybalances.3 Ethanol from sugar cane also offers

a strong energy return, in large part becausethe refining process is fueled by sugar canebagasse, the stalks that remain after sugar canehas been pressed to make sugar.4 The energybalance for some biofuels is expected toimprove over time with increased yields, moreefficient processing, and other developments.5

Current best estimates suggest that cornethanol provides only a 12–18 percent netreduction in greenhouse gas emissions, on aver-age, compared to gasoline (the EnvironmentalProtection Agency estimates a 22 percent reduc-tion).6 (See Figure 5.) As a result, ethanol con-sumption reduced total emissions from the U.S.transportation sector by only 0.7 percent in2008.7 In places where coal, a carbon-intensivefuel, is used to power the refinery, the lifecycleemissions for ethanol can be as high as or higherthan those associated with gasoline.8


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Figure 5. GHG Emissions ReductionPotentials for Ethanol, by Feedstock Type

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not only in the United States but also in othercountries, as land is converted to make up forthe overall loss in food crops.15 Estimates indi-cate that using first-generation biofuels tomeet 10 percent of global fuel consumption by2030 would require an additional 291–1,255million acres of cropland depending on feed-stock and productivity: the equivalent of 8–36percent of the world’s current arable land.16

Other factors that will increase the demand forcropland include rising populations and theexpanding global appetite for meat.The use of chemical inputs also contributes

to a biofuel’s energy and climate footprint,although application rates vary significantlyby crop. A 2006 study from the University ofCalifornia at Berkeley found that, on average,about 40 percent of corn ethanol’s greenhousegas emissions occur during the agriculturalphase of production.17 Nitrogen fertilizer inparticular is often over-applied, and itdegrades into nitrous oxide, a potent green-house gas.18 Recent studies suggest that thenitrous oxide released during biofuels produc-tion may in fact be four times greater than waspreviously estimated.19 Many U.S. corn farm-ers have had to increase their fertilizer use inrecent years because they chose to boost theirprofits by skipping annual rotations of cornwith a legume crop, such as soybeans, whichcan help to restore soil nitrogen levels.20

Producing soybean biodiesel, in contrast,requires only 2 percent of the nitrogen and 8percent of the phosphorus, per unit of energygain, that corn ethanol does.21 Low-inputperennial plants such as prairie grasses alsorequire fewer chemical inputs than corn.22

Climate change impacts from farming alsooccur when soils degrade over time and losetheir organic carbon stores, such as duringextensive tilling. Land that is cropped annuallystores very little carbon in its vegetation, andthe soil is both deprived of a fresh carbonsource and exposed to air and sunlight thatcauses it to release carbon that was stored.23

Continuous corn cropping in particular hasbeen criticized for reducing soil carbon.24

In addition to releasing greenhouse gases,biofuels contribute to the emissions of other

Land use changes will also affect the climateimpact. Studies indicate that the emissionsfrom land use changes made to accommodategreater corn production—such as convertingforests to cropland—would take decades to“repay” through any reductions that cornethanol brings by displacing fossil fuels, andcould shift the fuel from reducing greenhousegases by 20 percent to doubling them instead.9

Biodiesel, in contrast, has more than dou-ble the climate benefits of corn ethanol. Cur-rent best estimates for soy-based biodieselshow a 41 percent improvement in lifecyclegreenhouse gas emissions over conventionaldiesel.10 The EPA puts the average emissionsreductions even higher—at 68 percent—basedon a combination of soybean and yellow-grease feedstocks.11

Clearing land for new crop production canrelease large amounts of greenhouse gases,especially when carbon-rich ecosystems suchas forests, savannahs, and grasslands are con-verted.12 One study estimates that clearingtropical forests to plant oil palm plantations forbiodiesel will incur a “carbon debt” of 75 to 93years—the amount of time needed for the bio-fuels made from the palm oil to offset as muchgreenhouse gas emissions as was released dur-ing land clearing.13 If native peatlands arecleared, the carbon debt rises to 600 years.14

Dedicating U.S. croplands and food crops tobiofuel production can cause land use changes

Climate and Environmental Impacts of Current Biofuels

An ethanol production plant surrounded by corn in South Dakota.

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air pollutants, including smog-forming com-pounds and particulates. Some of the pollu-tants are released during the refining stage,while others result from fuel combustion inthe vehicle engine. A study from the Universityof Minnesota indicates that corn ethanol—regardless of how the refinery is powered—willalways increase particulate pollution comparedto conventional gasoline, while cellulosic bio-fuels will reduce particulate pollution.25 Otherresearch points to air pollution problemsfrom low-level ethanol blends and showsmixed results with high-level (E85) blends.26

Air quality impacts for biodiesel have beenunclear, with studies showing both smallincreases and small decreases in nitrogenoxides (NOx) pollution.

27

A report from the U.S. National Academyof Sciences concludes that expanding cornethanol production to meet the RenewableFuel Standard will also result in considerableadditional harm to domestic water quality,mainly from increased nitrogen and phospho-rous loading in surface and ground waters.28

Other research predicted that planting morecorn to meet ethanol targets in the UnitedStates alone would increase nitrogen pollutionto the Mississippi River by 37 percent.29 TheGulf of Mexico “dead zone,” caused by nitro-gen and other water pollution, was its secondlargest on record in 2008, with the bulk of thepollution estimated to come from agriculturein the Mississippi River basin.30 Growing soy-beans for biodiesel also adds to the problem.31

Biofuels are contributing to water supplyconcerns as well, at both the local and regionallevels.32 Corn ethanol is very water intensive—not just at the refinery stage, where each gallonof fuel produced requires 3–4 gallons of water,but also in the field.33 One study estimates thatirrigating corn for ethanol requires some 780gallons of water per gallon of fuel produced, orabout 200 times the water used at the ethanolrefinery.34 U.S. water consumption for ethanolis likely to increase as corn cultivation expandsto drier areas: between 2005 and 2008,ethanol’s water demand more than tripled,despite only a doubling in production.35

Climate and Environmental Impacts of Current Biofuels

Biodiesel, in contrast, requires about onegallon of water per gallon of fuel produced,although the amount of water required forirrigation varies significantly.36

Biofuels production is also expanding inregions where non-renewable aquifers areshrinking.37 In the southern Great Plains, agri-culture depends heavily on irrigation fromthe Ogallala Aquifer, which is being tapped atan unsustainable level.38 Several new ethanolrefineries are slated for construction near theaquifer, including in areas where the watertable has already dropped significantly.39

Further expansion of U.S. corn acreage willcome at the expense of land and wildlife con-servation.40 The corn ethanol boom poses aparticular threat to the U.S. Department ofAgriculture’s Conservation Reserve Program(CRP), which encourages farmers to “set aside”or retire marginal lands from production as away to reduce soil erosion, improve wildlifehabitat, and restore watersheds.41 In 2008, some2 million acres were removed from the pro-gram, and more than 20 million acres of CRPland are up for renewal in the next few years.42

With a guaranteed market for 15 billion gallonsof ethanol through 2022, landowners will havea continued incentive to turn much of this landback to production, especially if the net rev-enues from growing ethanol feedstocks con-tinue to be higher than those associated withkeeping the land in conservation.43

A variety of animal species rely on the habi-tat provided by CRP lands for their survival,including grassland birds such as the Grass-hopper sparrow, Baird’s sparrow, Lark bunting,and Bobolink, as well as mallard ducks.44 Aloss in CRP lands, combined with the impactsof climate change on U.S. ecosystems, is likelyto reduce the habitat available for some ofthese species, constraining their range andreproduction. The current or future cultivationof non-native biofuel crops presents a furtherthreat to biodiversity conservation, as thesecrops have the potential to cross-breed withnative plants to produce invasive weeds—or tobecome invasive species themselves.45

Benefits of“Advanced” Biofuels

lthough ethanol and other biofuelshave become more sophisticated inthe years since U.S. federal supportwas first levied in the late 1970s,

they need to develop much further if they areto be a sustainable energy solution. Nearly allstudies on the role of biofuels in mitigatingclimate change and boosting energy securityconclude that the transition to so-called “sec-ond-generation” or “advanced” biofuels is nec-essary to make the wider use of biofuels feasible.

Advanced biofuels rely on non-food feed-stocks and offer dramatically improved energyand greenhouse gas profiles over conventionalbiofuels such as corn ethanol. But large-scaledevelopment of advanced biofuels has not yettaken place.While many of these feedstocksand technologies are promising, the broad eco-nomic and environmental effects of the fuelsat commercial scale are not yet known.The most widely cited second-generation

biofuels are “cellulosic” biofuels, derived fromthe fibrous—or cellulosic—material in plants.Potential cellulose sources include perennialgrasses and fast-growing trees, some of whichare being developed as dedicated “energycrops” that can be converted to ethanol orbiodiesel. Of the many possible perennial feed-stocks, switchgrass has received the most atten-tion in the United States. Other potentialfeedstocks being tested include blue grass,gammagrass, the tropical Asian grassMiscant-hus, and energy cane, a variety of sugar canebred to produce high sugar levels.1 Advancedbiofuels can also be made from non-plant bio-mass sources, such as fats, manure, and theorganic material in urban wastes.Crop residues, in the form of stems and

leaves, represent another substantial source ofcellulosic biomass. Corn stover—the stalks andcobs that remain after harvesting—is activelybeing promoted by corn interests as a feed-stock for second-generation refineries. How-ever, some studies suggest that removing just25 percent of the corn stover from fields willreduce soil quality and decrease carbon con-tent, even on prime agricultural land.2 Cornstover also yields relatively few gallons per acre:180–270, compared with 425 gallons from con-ventional corn ethanol.3

Fast-growing trees are being considered aspotential feedstocks as well, including hybridwillow and poplars that can grow well with fewchemical inputs.4 But there are downsides tothe use of these trees, especially in locationswhere the species are non-native and may beinvasive.5 A closely related potential feedstockis forest waste from the timber industry andmore-aggressive clearing of underbrush for fire


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Wood chips from timber waste come off a shredder’s conveyor belt.

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prevention. The U.S. Departments of Energyand Agriculture estimate that 368 million drytons of these wastes could be harvested sus-tainably every year.6 Another advanced andeven more cutting-edge “third-generation”feedstock is algae for biodiesel.7 (See Sidebar 2.)One of the most compelling advantages of

advanced biofuels over conventional biofuels isthe potential to provide a more positive energybalance, resulting in reduced greenhouse gasemissions.Whereas corn ethanol yields about25–35 percent more energy than is invested in

its lifecycle production (from field to tank),cellulosic ethanol has the potential to provide4–9 times more energy than is required to pro-duce it.8 One study has shown that sustainable,low-input, low-management switchgrassethanol in three Midwestern states can yield5.4 times more energy than invested, althoughthe yield could theoretically be much higher.9

Research from the Argonne National Labora-tory showed that the useful energy provided bythe ethanol is approximately nine times theenergy required to produce it.10


Benefits of “Advanced” Biofuels

Sidebar 2. Algae for Biodiesel: Third-Generation Biofuels

As research continues on second-generation advanced biofuels, some researchers and industry groups are taking a lookat microalgae—often called the “third generation” of biofuels. Microalgae are photosynthesis-based single-celled organ-isms that can combine energy from the sun with carbon dioxide and other nutrients to produce biomass that is rich innatural oils. These oils can be separated and used to produce biodiesel and other biofuels.

Microalgae offer many potential benefits as a feedstock. They grow rapidly, with some species doubling their mass ina single day. This translates into producing as much as 100 times more oil per acre than standard oil crops such as soy-beans. Algae can also be carbon neutral if the biomass residue after oil collection is converted and used to power theprocessing system. Like second-generation feedstocks, microalgae do not compete with food crops. They may also con-fer additional environmental benefits, including cleaning wastewater.

Microalgae have drawbacks, however. For the biofuel to be competitive, the current high costs of production (primar-ily a result of energy inputs) must be reduced. Although some experts estimate costs as high as $33 per gallon, the U.S.Department of Energy (DOE) puts the price at roughly $8 per gallon. Costs could be lowered by using waste heat as apower source and by selling byproducts for other uses, including in the fermentation of ethanol and as a supplement inanimal food.

Another potential drawback of algae is the high water demand, especially with the use of outdoor ponds that havehigh evaporation rates (although closed systems or the use of wastewater streams minimize this risk). Researchers arealso considering genetic manipulation of algae to improve performance, which could pose environmental threats ifgrown in open systems where the organisms could spread to natural ecosystems.

Early U.S. research on microalgae for biofuels began in the early 1980s under the DOE’s Aquatic Species Program.However, during budget cuts in the late 1990s the program was discontinued in favor of pursuing research on ethanol.In the last two years, interest has grown again, with hundreds of companies now working to commercialize microalgaefor biofuels. The DOE has resumed research, and it hosted a workshop in December 2008 to discuss both barriers tocommercial development and the release of an Algal Biofuels Roadmap.

Despite limited government funding, private research and testing has continued. One of the latest developments togarner media attention is the testing of a commercial jet plane fueled in part by algae biofuel. Several companies havedeveloped systems to divert carbon dioxide emissions from industrial operations into algae production, including aSolix Biofuels plant in Colorado connected to a beer brewery and plans by GreenFuel Technologies to build a site linkedto a cement plant in Spain. By using emissions that would otherwise be vented to the atmosphere, these systems maybe able to provide significant greenhouse gas benefits.

Other recent advances include a breakthrough in light immersion that allows algae biomass to grow to depths of onemeter (10–12 times deeper than before), and the recent decoding of the genes of two widely available ocean-dwellingmicroalgae, which could help further microalgae research.



trast, an average crop of 155 bushels of cornper acre will provide less than 500 gallons peracre.16) In practice, however, it makes sense togrow switchgrass and other perennial biofuelcrops on more marginal lands than in the testplots to avoid competition for good farmland.Under these conditions, switchgrass, like corn,will produce less than 500 gallons an acre, andperhaps as little as 300 gallons, unless yields areimproved with breeding or by using a combi-nation of high-yielding grasses.17

One issue that deserves closer analysis is thepotential advantage of cellulosic biofuels forsoil, land, and wildlife conservation. For exam-ple, in a simulation of the impacts on soil andwater quality in a central Iowa watershed over20 years, researchers found that planting allavailable land with switchgrass reduced sedi-ment flows (and thus erosion potential) by 84percent, nitrogen concentrations by 53 per-cent, and phosphorous by 83 percent.18 Otherresearch confirms that lower inputs of agro-chemicals for second-generation feedstocks canhave potentially positive effects on soil and waterquality.19 Using a combination of high-yield-ing perennial grasses rather than monoculturesmay improve benefits to wildlife as well.20

The environmental advantages of cellulosicbiofuels can be amplified further with the useof appropriate management practices. Peren-nial crops such as switchgrass and other prairiegrasses can be harvested annually with mini-mal increases in soil erosion (and, if the grassis not cut too low, it can still provide habitatfor small animals and birds).21 But if fast-growing trees are cultivated, more-complexselective harvesting would be needed to avoidsubstantial soil erosion and to leave sufficienthabitat for large wildlife.22 Harvesting on frag-ile soils, wetlands, waterways, and high-diver-sity habitats, meanwhile, will incur muchhigher environmental costs and may mirrorsome of the same problems seen with first-generation biofuels. Several estimates of theamount of harvestable biomass in the UnitedStates assume that much of the existing Con-servation Reserve Program land will be usedfor energy crop production—posing a poten-tial threat to these lands.23

These energy gains represent climate bene-fits for second-generation biofuels. Currentestimates suggest that fueling vehicles withcellulosic ethanol could reduce emissions by86–94 percent compared to gasoline (the U.S.Environmental Protection Agency estimates 91percent) versus a reduction of only 12–18 per-cent on average for corn ethanol.11 Many ofthese climate-gain estimates are based on theneed for fewer agricultural inputs as well asincreased soil carbon storage.12 For example,research shows that some perennial crops, suchas switchgrass, may store enough carbon in thesoil and root mass to overcompensate for car-bon released during the rest of the lifecycle,meaning they could help take carbon dioxideout of the air on a net basis.13

Advanced biofuels also offer potentialemissions benefits during refining, such as ininstances where waste byproducts are used tohelp power the biomass conversion process.Processing cellulosic ethanol, for example, gen-erates residues of lignin that can be used asa process fuel, making the refining processlargely independent of fossil-based power suchas coal and natural gas.14

In terms of projected fuel yields, second-generation feedstocks vary widely. U.S. testplots planted with switchgrass have yieldedenough biomass to produce nearly 1,200 gal-lons of ethanol per acre annually.15 (In con-

The Solix Biofuels test site for algal biofuel research at ColoradoState University, Fort Collins, Colorado.

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efficiency of biofuel processing and make cel-lulosic ethanol cost-competitive with first-gen-eration biofuels and gasoline. These processescan be divided into two main approaches: the“biochemical platform,”which relies on enzymesor biological processes to break down the feed-stocks, and the “thermochemical platform,”which relies on heat, pressure, and chemicalcatalysts. Both approaches can be used to pro-duce a wide variety of fuels. They also havetheir advantages and disadvantages with regardto feedstock flexibility, cost, and associatedemissions reductions.28 (See Sidebar 3.)As of July 2008—before the recent eco-

nomic downturn—an estimated 55 cellulosicbiorefineries were completed, under construc-tion, or in the planning stages in 31 U.S. states,with a total projected capacity of 630 milliongallons per year.29 In April 2009, there were25 cellulosic ethanol demonstration or pilot

The two biggest limitations for cellulosicbiofuels are arguably the cost and the chal-lenges associated with transporting and storingmassive quantities of cellulosic feedstock. Asof late 2008, production cost estimates for cel-lulosic ethanol were $2.40 per gallon—morethan double the costs for corn and sugarcaneethanol.24 Cellulosic refineries also requirelarge amounts of feedstock, estimated at 700tons per day for a facility producing 10–20 mil-lion gallons of fuel per year.25 Producing suchlarge quantities will require advances in har-vesting, collection, transporting, and storage tohelp lower the overall cost.26 The U.S. Depart-ments of Agriculture and Energy hope to lowertotal feedstock costs, including these factors,from the estimated $60 per ton in 2007 to $47per ton by 2012.27

A variety of second-generation processingtechnologies have the potential to improve the

Sidebar 3. Technologies for Advanced Biofuels: Biochemical and Thermochemical Platforms

Second-generation production of cellulosic biofuels currently follows one of two technology platforms. The first, bio-chemical, refers to a process that uses chemicals, enzymes, and microorganisms to break down plant feedstocks intocomponents that can be converted to fuels. Pretreatment and hydrolysis are used to separate the cellulose from otherplant fibers such as lignin and hemicellulose. Once separated, the cellulose must be broken down further into sugars,which can be fermented into alcohols that are then distilled into ethanol or other fuels.

The ethanol produced through the biochemical process is identical to ethanol generated through first-generation pro-duction, such as that based on corn. Although the biochemical process is normally associated with ethanol production,it may be used to make other fuels, too. For example, some researchers are investigating the use of modified E. coli toconvert cellulosic feedstocks to microdiesel, which is compatible with biodiesel.

The second platform, thermochemical, works by applying heat and chemicals to convert almost any kind of biomassinto a variety of fuels. The feedstock is heated until it converts into a syngas, which is then run through a catalyst thatchanges it into a liquid fuel. The type of fuel that results is determined by which catalyst is used, but it most oftenincludes Fisher-Tropsch liquids (FTLs), which are similar to biodiesel, as well as a range of alcohols, including ethanol.One alternative being explored is to use fermentation with the syngas rather than a catalyst, which would allow for directproduction of ethanol.

The potential benefits of the thermochemical process include its ability to better convert cellulosic materials, includ-ing wood and forest wastes that are difficult to convert through the biochemical platform. Also, because the thermo-chemical platform is similar to the way petroleum is refined, it can use currently available technologies that help reducethe cost. The flexibility of feedstocks offers advantages as well.

While both of these platforms are understood today, more research is needed to make second-generation biofuelsmore cost-competitive with first-generation biofuels and to bring advanced biofuels to commercial production. Potentialareas for further research include developing better pretreatment processes and enzymes for hydrolysis, improvingmicroorganisms for fermentation, developing feedstocks that are easier to break into components, finding technologiesto better clean syngas, and discovering efficiencies that can help make more fuel at a lower cost.




the U.S. Farm Bill’s “Biorefinery AssistanceProgram.”35 In May 2009, President BarackObama directed the Secretary of Agriculture toincrease investments in advanced biofuels pro-duction, including refinancing, loan guaran-tees, and additional funding.36 The DOE is alsoproviding significant funding, including up to$385 million for six cellulosic ethanol plants aspart of a goal to make cellulosic ethanol cost-competitive with gasoline by 2012.37 Individualstates are funding projects as well.38 However,a recent report from the Sandia National Labo-ratories concluded that as much as $250 billionin investments is needed to achieve productionlevels of 60 billion gallons a year.39

plants in operation, although only nine wereproducing at a significant level.30 There werealso two cellulosic diesel plants in operation,one at the pilot level and one at the demon-stration level.31 These facilities are embracinga wide diversity of feedstocks, including agri-cultural residues, wastes, woody biomass, anddedicated energy crops.32 Unlike corn ethanolrefineries that are concentrated in the Midwest,cellulosic ethanol refineries are located acrossthe country.33

Federal agencies are providing funding formost of these ventures.34 In January 2009, theUSDA approved its first-ever guaranteed loanfor a commercial-scale cellulosic ethanolplant—a wood-chip facility in Georgia—under



most efforts to define “biofuel sustainability”are being pursued at a relatively small scale. Sofar, only a handful of them address social andeconomic considerations, such as protectingworkers’ rights, contributing to local develop-ment, and guaranteeing fair compensation forland use or land transfers.3 Many more efforts,however, incorporate environmental consider-ations, including lifecycle greenhouse gas emis-sions and energy balance.4 There is a generalconsensus that biofuels should produce lessgreenhouse gas emissions than conventionalpetroleum fuels and produce more energy thanis required for cultivation and processing.

Developing widely accepted sustainabilitycriteria for biofuels is difficult due to the rangeof variables involved and because the environ-mental effects of biofuels are often highly spe-cific to the crop type, location and climate, orproduction process. For example, oil palm can

any second-generation biofuelsshow the potential to be moresustainable than conventionalbiofuels. But there is no guaran-

tee that this will be the case, especially whenthe fuels are produced at a large scale. As thedemand for biofuels increases, some analystsfear that the market will simply adjust, sup-porting increased production while ignoringthe environmental and social costs.Fortunately, many people who work with

biofuel supply chains now realize that nearlyall stages of the biofuel process—from pro-duction to processing to the choice of fuelavailable—could be improved. These improve-ments can best happen if producers andpolicies give preference to biofuels that areproduced in an environmentally and sociallysustainable manner, that offer the highest life-cycle emissions-reduction values, and that areprocessed using technologies that deal withwastes responsibly and even utilize thesebyproducts as energy sources.One way to address the potential conse-

quences of ongoing biofuels development isby developing broadly applicable sustainabilitystandards for the fuels (similar to measuresthat exist in the forestry and organic food sec-tors) that go beyond existing quality-controland technical standards.1 Such criteria wouldenable biofuel producers to engage in third-party certification of their practices and prod-ucts and help end-users determine whetherthe fuels they use were produced in a sustain-able manner.Elements of existing sustainability standards

for forestry, agriculture, and energy productsare already being applied to biofuels.2 However,

Making Biofuels Sustainable

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An oil palm plantation on former forest land in West Java, Indonesia.

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have an adverse effect on biodiversity if it isgrown on land that is newly converted fromprimary forest, but it can have a positive effectif it is grown on degraded land.5 Other prac-tices that can determine the degree of environ-mental impact include the use of fertilizersand pesticides, which affects water quality, soilquality, and greenhouse gas emissions; the useof irrigated water, which affects water supply;the use of crop rotations to preserve soil car-bon; and the use of different fuels to power therefining process.6 For some crops, there may bea positive net energy yield only if the benefitsfrom byproducts are included in the analysis,such as the use of processing wastes to generateenergy or to serve as an animal feed.7

Sustainability criteria can be applied to bio-fuel processing as well. For conventional bio-fuels, improvements in processing includeenhanced energy efficiency and a greaterreliance on renewable energy as a power source.A 2007 analysis from the Argonne NationalLaboratory showed that corn ethanol producedin a facility fired by wood chips could achieveemissions reductions of 52 percent comparedto gasoline, versus a 3 percent emissionsincrease if powered by coal.8 Ethanol plantscould also burn distiller’s grains, an ethanolbyproduct, as a process fuel to lower their emis-sions (although for now the grains are more

valuable as livestock feed).9 Some plants areexploring the use of biogas from cattle manureto power the process, which has the added cli-mate benefit of preventing methane, a green-house gas more powerful than carbon dioxide,from entering the atmosphere.10 For biodieselprocessing, there is interest in using thebyproduct glycerin as an energy source.11

Even with first-generation biofuel technolo-gies, it may be possible to significantly reducethe environmental impacts of biofuels simplyby using different feedstocks. For example,grain sorghum—a crop that requires lowresource inputs, grows on marginal lands, andis highly efficient—can be substituted at cornethanol refineries.12 For biodiesel, possiblesubstitutes for soybeans include the oilseedplants camelina and jatropha.13 Jatropharequires few water or fertilizer inputs, is able togrow on land unsuitable for food crops, and isinedible, so its expansion would not competewith traditional food production; however, theplant requires special handling and processingbecause it is toxic to humans.14

Better management practices on farms arealso an important component of biofuel sus-tainability and can be built into sustainabilitystandards and criteria. Climate-friendlychoices include avoiding fragile lands andpracticing no-till cultivation, a method ofsowing crops without disturbing the topsoil.Because no-till cultivation minimizes the num-ber of passes over a field needed to establishand harvest a crop, it requires 50–80 percentless fuel than tillage-based agriculture.15 No-till farming also helps minimize the release ofcarbon from soils, and the Chicago CarbonExchange now grants “carbon credits” to U.S.farmers who practice the method continuouslyfor at least five years.16 No-till is currentlybeing used on one-fifth of the nation’s farm-land, but only some 20 percent of corn pro-ducers have embraced the practice, suggestingmore room for adoption.17

Among the most prominent efforts todevelop voluntary sustainability criteria forbiofuels are those coordinated by the Round-table on Sustainable Biofuels and a variety ofother multi-stakeholder groups.18 (See Table


No-till planting of corn on the contour in a field in northwest Iowa.

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2.) Mandatory standards are also under devel-opment, including requirements under theU.S. Renewable Fuel Standard to consider theclimate impacts of indirect land use changes.California recently adopted a regulation thatrequires the use of lower-carbon-intensity fuelsover time and plans to incorporate additionalenvironmental and social standards in thefuture. (See Sidebar 5 on page 29.)The European Union has attempted to inte-

grate sustainability criteria into national bio-fuels policy as well. In early 2009, the EUfinalized climate regulations that require 10percent of the region’s transport fuels to comefrom renewable sources, including biofuels,by 2020.19 Under the directive, biofuels mustdemonstrate a 35 percent savings in green-house gas emissions compared to their fossilfuel counterparts, based on a lifecycle analy-


Table 2. Selected Biofuel Sustainability Initiatives

Group Description

Roundtable on Sustainable The most prominent international multi-stakeholder initiative, the RSB has developedBiofuels (RSB) draft sustainability principles and criteria for sustainable biofuels production and proces-

sing. The guidelines address climate change, human and labor rights, food security, landrights, biodiversity, air, water, soil, and economic and development issues. The groupalso envisions a certification mechanism or purchasing guidelines to follow the criteria.

Roundtable on Sustainable Officially established in 2004 in response to increasing concerns over palm oil plantations,Palm Oil (RSPO) the RSPO brings together industry and organization representatives to work toward a

sustainable supply chain for palm oil, a common biodiesel feedstock. The program’s firstcertified “sustainable” oil was shipped to Europe in 2008.

Roundtable on Responsible Initiated in 2004, the RTRS is working to create sustainability criteria and principles forSoy (RTRS) global soybean production that cover a range of environmental and social issues. The

group is also working on a corresponding verification program.

Council on Sustainable Established in 2007, CSBP is working to develop sustainability criteria for the productionBiomass Production (CSBP) of feedstocks for second-generation cellulosic biofuel refineries in North America. Mem-

bers include government agencies, environmental groups, and biofuel producers.

European Committee for Known for creating voluntary European standards on a range of items, the CEN estab-Standardization (CEN) lished a technical committee in 2008 to establish sustainability criteria for biomass,

including biofuels.

Sustainable Biodiesel SBA, a U.S. nonprofit, is striving to create a consensus among stakeholders on a certifi-Alliance (SBA) cation program for sustainably produced biodiesel. The alliance’s draft sustainability

standards include environmental, economic, and social best practices.



A field of ripening sorghum in Arkansas.

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Sidebar 4. Biomass and Biofuels: Transitioning Transportation Fuels

Substituting biofuels for fossil fuels in transportation is usually an assumed part of any energy solution to address cli-mate change. But evidence shows that there might be better alternatives for our transportation needs and that the bestuse of biomass may be for electricity and heating, not biofuels.

Many of the same feedstocks currently used to make biofuels—such as crop and wood residues, trees and grasses,and urban wastes—can also be used to generate electricity and heat. Research indicates that in the long term, using bio-mass for electricity and heat is likely a more sustainable option than using it to produce biofuels to meet energy andtransportation needs because of higher efficiencies, greater emissions reduction potential, and considerably lower costs.

Today, biomass is being used to generate electricity at a large scale via two main methods: “combined heat-and-power” (CHP), where exhaust heat from electricity generation is used to provide an additional energy service, and “co-firing,” a process that burns a combination of biomass and coal. CHP operates at efficiencies of between 75 and 90percent and generates two products: electricity and useful heat. The heat is used either to warm residential and com-mercial buildings or to fuel industrial processes. Biomass is considered one of the most promising fuels for CHP appli-cations because it is one of the few renewable energy resources that can be transported and stored relatively easily.Biomass-fueled power generation can also be ramped up when needed.

Co-firing holds the most potential out of all renewables for reducing a significant amount of emissions in the near term,according to a study by the Oak Ridge and Lawrence Berkeley National Laboratories. While conventional coal plantsemit about 1 metric ton of carbon dioxide per megawatt-hour, biomass can substitute for up to 20 percent of the coalin co-firing plants, which leads to linear reductions in carbon dioxide and sulfur dioxide emissions. (Changes in nitrousoxide emissions, another greenhouse gas, are less certain.)

Many countries and cities already rely or plan to rely on biomass for electricity and heating. In Sweden, where asmuch as 22 percent of the electricity supply is generated from biomass, the city of Kalmar plans to replace its fossil-fueled electricity and heating infrastructure with biomass CHP, with the goal of phasing out all fossil fuel use by 2030.CHP is also a high priority in Denmark, where traditional biomass accounts for nearly 14 percent of the electricity supplyand half of the energy derived from renewable sources. In the United States, in contrast, biomass is the second largestsource of renewable electricity after hydropower yet accounted for only 1.3 percent of electricity generation in 2007.

In the transportation sector, biofuels are currently the only near-term alternative to fossil fuels, particularly for use inpassenger vehicles, and they might have a more prolonged presence in fueling heavy-duty vehicles. Over the long term,however, biomass-fueled electricity could play a more critical transportation role, especially when the electricity is usedto power plug-in hybrid-electric and electric vehicles. Electricity is a more versatile form of energy than liquid biofuels,with power providers able to choose from a wide variety of low-carbon energy options, including wind, solar, and bio-mass power. Electricity could therefore be a more climate-friendly “transport fuel” than biofuels, provided the electricityis generated from renewable sources.

Using biomass for electricity and heat in both transport and non-transport applications could significantly lower thecosts of reducing emissions. According to one study, using biomass for biofuels would cost up to three times more thanusing biomass for electricity and heat, for the same amount of reductions. And using biomass for electricity to powervehicles reduces greenhouse gas emissions by 108 percent more on average than if biofuels had been used, while pro-viding 81 percent more mileage. (As with biofuels, the land use efficiency of producing biomass for electricity and heatremains uncertain.)

Biofuels have tremendous value as a “transition” fuel as the world moves away from its current reliance on fossilfuels and toward a low-carbon future. There are also many non-fuel options to reduce the environmental impacts of thetransport sector, most of which bring additional societal benefits. Advancements in vehicle technology, such as higherfuel efficiency, lighter weight, and electric motors, as well as greater investment in public transit, could reduce fossil fueldemand. And increased use of non-motorized vehicles such as bicycles as well as the adoption of more pedestrian-friendly urban planning could shift dependence away from transport fuels altogether.

—Amanda Chiu



mitigation of climate change—then producingliquid biofuels for transportation may not bethe most optimal use of the world’s biomassresources. These experts argue that a better,more cost-effective use of energy crops, woodytrees, crop residues, and other biomass is forelectricity and/or heat production.24 (See Side-bar 4.) Current and expected limitations inethanol infrastructure and production—suchas difficulties transporting ethanol, the lack ofpipelines, and problems with biomass collec-tion and storage—may also force the UnitedStates to rethink the future of biofuels in itsenergy mix.25

sis.20 The regulations also require that theseemissions savings increase over time, rising to50 percent by 2017.21 Feedstocks cannot begrown on lands that have a high biodiversityvalue, on lands considered to have a high car-bon stock, or on peatlands, and biannualreports must address the sustainability ofregional biofuels use, covering both environ-mental issues such as air, soil, and water pro-tection as well as social issues such as foodprices and land rights.22 The EU will also studythe effects of indirect land use changes by theend of 2010.23

Many bioenergy analysts argue that if theend goal is sustainability—in particular the


Federal and StateBiofuel Policies


biofuels.2 Twenty-one billion gallons of this isto come from “advanced biofuels,” with 16 bil-lion gallons of that from cellulosic biofuels.3

(See Figure 6.)Through these targets and associated fund-

ing, the RFS2 provides an overall incentive forproducing cellulosic and other advanced bio-fuels. It also charges the U.S. EnvironmentalProtection Agency with assessing cellulosicproduction targets annually, based on the pro-jected available volume for a given year.4 If theprojected volume is less than the minimumlevel established by the revised RFS2, the EPAmust lower the volume requirements for cellu-losic biofuels and may decide to reduce the tar-gets for advanced biofuels and total renewablefuel.5 Recent estimates from the Energy Infor-mation Administration suggest that the man-date to use 21 billion gallons of advancedbiofuels by 2022 will not be met until at leastfive years later.6

Perhaps more significantly, the revised RFSincludes some degree of sustainability criteria,including feedstock restrictions that helpprotect sensitive lands such as old-growthforests.7 In an effort to address climate changeconcerns, the RFS2 requires that biofuelsproduced under the mandate meet specifiedgreenhouse gas reduction targets.8 To qualifyfor the RFS, corn ethanol must achieve at leasta 20 percent reduction in lifecycle emissionscompared to gasoline, and biodiesel andadvanced biofuels must achieve a 50 percentreduction compared to the petroleum fuelsthey would replace. For cellulosic biofuels, therequirement is at least 60 percent lower emis-sions. The EPA has the authority to lowerthese reduction requirements for any of the

olicy choices are instrumental indetermining the direction ofnational, as well as global, biofuelsdevelopment. The United States has

supported ethanol since the late 1970s and cur-rently has an extensive federal mandate andsupport system for biofuels, particularly cornethanol. The most important piece of legisla-tion that affects domestic biofuels develop-ment is the Renewable Fuel Standard (RFS),promulgated in 2005 but amended under theEnergy Independence and Security Act (EISA)of 2007.1 This is supported by a variety ofadditional federal and state incentives.The revised RFS (known as RFS2) calls for

the increased blending of biofuels into conven-tional motor fuels. Specifically, it mandates theproduction of 36 billion gallons of biofuelsannually by 2022, derived from a mix of bothconventional biofuels and second-generation

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Figure 6. Biofuel Requirements Under the U.S.Renewable Fuel Standard, 2009–22

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gress on the environmental effects of the fed-eral biofuels measures, including effects on air,water, and soil quality.16 The EPA Administra-tor must also undertake periodic reviews onexisting technologies and the feasibility ofmeeting the targets established by the RFS2. Toreport on these wide-ranging effects, the EPAwill need to establish measurable assessmentcriteria, essentially creating a working defini-tion of sustainable biofuels production.

It is important to note, however, that theRFS2 greenhouse gas reduction requirementsapply to new ethanol plants, and not to facili-ties that were online before the law went intoeffect.17 Because the capacity of current U.S.ethanol plants is estimated at 12 billion gallonsannually, it appears that the RFS2 target of 15billion gallons of renewable fuels by 2015 willbe met largely with corn ethanol produced in“grandfathered” facilities, without any requiredemissions reductions.18 The EPA proposed afew measures that would tighten the loopholefor existing plants in May 2009, although itremains to be seen whether any of these willtake effect.19

Moreover, although the revised RFS setsminimum production requirements for renew-able and advanced biofuels, these are not capson production. Therefore, if corn ethanol con-tinues to be profitable, it will be produced

advanced biofuels by up to 10 percent, whichit proposed to do for advanced biofuels in itsdraft RFS2 implementation rules released inMay 2009.9

These greenhouse gas reductions must becalculated on the basis of a lifecycle analysis,including feedstock production, refining, andfuel use.10 The legislation also requires the EPAto consider indirect emissions, such as thosefrom land use changes.11 Numerous scientificstudies and a recent assessment from the stateof California show that including land usechanges could substantially alter the green-house gas profiles of many biofuels.12

In early May 2009, the EPA outlined meth-ods for calculating these effects in draft rulesand began seeking scientific peer reviews aswell as public comments.13 Although it isunclear which methodology will ultimately beused to determine greenhouse gas reductionsfor different biofuels, one of the areas that islikely to draw controversy is the timeframeover which reductions are considered. Accord-ing to EPA’s calculations, using a 30-year time-frame would mean that corn ethanol producedusing natural gas would emit 5 percent moregreenhouse gas emissions than petroleumfuels. But that same ethanol considered over a100-year timeframe would put the emissionchanges at a 16 percent decrease.14

Using the longer 100-year time period mini-mizes the effect of land use changes such asdeforestation because most carbon is emittedby land clearing. Emissions are graduallyreduced over time, and over time land clearedfor biofuel production can actually make posi-tive contributions to carbon sequestration,depending on the crop. The differencesbetween the two periods are explained bythe estimated greenhouse gas savings at thetailpipe when petroleum is displaced: a longertime period means more gallons are used andmore carbon dioxide is avoided. Critics of thelonger timeframe argue that greenhouse gasreductions are needed as soon as possible, andnot several decades in the future.15

The revised RFS also requires the EPAAdministrator and the Secretaries of Agricul-ture and Energy to report periodically to Con-

An American SUV marked for use of E85 ethanol fuel.

petrr

Federal and State Biofuel Policies


valorem” tariff of 2.5 percent on importedethanol.24 The tariff effectively reduces theamount of foreign ethanol that is importedinto the country by raising the price of thesefuels (a limited amount of tariff-exempt fuelis allowed in through the Caribbean BasinInitiative).25 In early 2009, several membersof Congress introduced a bill to lower the tar-iff, which could help the United States shiftto more sustainable sources of biofuels fromcountries such as Brazil.26

Biodiesel receives similar incentives, includ-ing the biodiesel tax credit which is now set at$1 a gallon through 2009.27 There is also asmall agri-biodiesel producer credit of 10 centsper gallon.28 However, in March 2009 theEuropean Union imposed a new tax onbiodiesel imports, creating a disincentive toU.S. production.29 (The “splash-and-dash”loophole, by which U.S. blenders received thetax credit for blending imported biodiesel witheven tiny amounts of petroleum diesel andthen re-exporting it, was ended in 2008.30)In addition to biofuels mandates and tax

credits, federal policy provides support forbiofuels research, development, and infra-structure through direct funding grants andloan guarantees. The American Recoveryand Reinvestment Act of 2009, for example,authorizes loan guarantees for advancedbiofuels research and commercialization.31

In late 2008, the Department of Energyannounced grants of more than $4 millionto six universities for advanced ethanolresearch.32 The previous year, the DOEannounced funding for six ethanol compa-nies of up to $385 million to bring cellulosicethanol to commercial production.33 Otherfederal funding supports research intoenzymes, improvements to biofuel refining,and improvements to gasification.34

These federal biofuel incentives are supple-mented by state blending mandates and otherincentives. Florida, for example, adopted amandate in 2008 that requires all gasolinesold in the state to contain 9–10 percentethanol by the end of 2010.35 California’s LowCarbon Fuel Standard, established in 2007,calls for the introduction of low-carbon

above and beyond the 15-billion-gallon (and20 percent greenhouse gas reduction) cap for2015. Even though this additional productionwould not count toward the mandate, blenderswould still profit from the tax credit theyreceive under current law.

The so-called “blender’s tax credit” (orproduction tax credit) is the most importantfederal support for ethanol after the RFS.Known technically as the volumetric ethanolexcise tax credit (VEETC) and currently effec-tive through 2010, the credit provides a taxbreak to registered blenders for every gallonof pure ethanol blended into gasoline, in aneffort to keep ethanol priced competitivelywith gasoline.20 The VEETC was previouslyset at 51 cents per gallon but was lowered to45 cents in the 2008 Farm Bill.21 A related taxcredit is the small ethanol producer creditof 10 cents per gallon for facilities that pro-duce less than 60 million gallons per year.22

Another available credit—the cellulosic bio-fuel tax credit—allows producers to claim upto $1.01 per gallon of qualified ethanolthrough 2012.23

In addition to these tax credits, the U.S.biofuel industry benefits from a 54-cent pergallon tariff on imported ethanol that is cur-rently in place through 2010, as well as an “ad


A Lawrence Berkeley National Laboratory researcher investigatesthe lignocellulose deconstruction of switchgrass.

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mandates are also a form of U.S. support tobiofuels. Under the EISA, for example, federalfleets are required to increase their consump-tion of alternative fuels by 2015.39 Many citiesand states also require their fleets or transportservices to use particular kinds of fuels: sofar, 11 states have such mandates for ethanol,according to the Renewable Fuels Association.40

Together, state and federal mandates andincentives ensure that U.S. demand for biofuelswill remain high—regardless of price and con-sumer choice.

fuels—including ethanol and biodiesel—intothe state fuel supply.36 (See Sidebar 5.) AndIowa has adopted a state-level Renewable FuelStandard that requires 25 percent renewablefuels in the state by 2020, including ethanoland biodiesel.37 Meanwhile, eight Midwesternstates have adopted a regional biofuels pro-motion plan that spurs local production,increases the number of high-ethanol-blendfueling stations, and requires at least 50 per-cent of all transportation fuels consumed inregion to be regionally produced.38

Procurement preferences and purchase

Sidebar 5. California’s Low Carbon Fuel Standard: A Model for National Policy?

Proposed in 2007 and adopted in April 2009, California’s Low Carbon Fuel Standard (LCFS) is part of a broader effortto reduce the state’s greenhouse gas emissions to 1990 levels by 2020, based on the principle that a balanced mix ofstrategies is the best way to cut emissions by approximately 30 percent. In addition to the LCFS, other proposed green-house gas emission reduction programs include a cap-and-trade program linked with the Western Climate Initiative,expanding energy efficiency programs, and achieving a 33 percent renewable energy mix.

California’s LCFS calls for staged reductions in the carbon intensity of transportation fuels of 10 percent by 2020,with separate yearly requirements for gasoline and diesel. The standard also covers alternative vehicles such as electricvehicles and those running on compressed natural gas. The measure is projected to curb some 16–23 million tons ofcarbon dioxide equivalent annually by 2020 and will require reductions starting in 2012.

The LCFS requires analysis of the full lifecycle impacts of fuels, including direct effects such as farm inputs, feedstocktransportation, refining and production, and combustion in vehicles. The analysis will also eventually incorporate indirecteffects such as land use changes, which can be a significant source of greenhouse gas emissions. The California AirResources Board (ARB) staff will further evaluate the effects of land use changes by 2011 so these can be incorporatedinto the carbon measurements under the rule, although industry proponents have vowed to protest the results, and theeffects of the measure on the ethanol industry are unknown.

So far, the regulation covers only one sustainability factor: land use change. However, ARB plans to develop and pro-pose additional sustainability criteria—including environmental and socioeconomic variables—and argues that interna-tional cooperation and enforceable certification standards are essential. ARB also hopes the new LCFS will serve as amodel for other jurisdictions, including 11 states that are considering similar standards.



The Road Ahead:Policy Options for

Sustainable U.S. Biofuels


Security Act (EISA) provides incentives for cel-lulosic and other advanced biofuels, there is noguarantee that these technologies will becomeattractive investments at a time when current,mature technologies are struggling. Best-casescenarios aim for broadly available second-generation biofuels within 10 to 15 years, butin the interim U.S. biofuel policies continueto provide incentives for corn ethanol, eventhough it is plagued with environmental, social,and economic problems. This continued sup-port makes it difficult to jumpstart advancedtechnology solutions and diversify the U.S. fuelsupply, and should be phased out systematicallyto free up support for second-generation fuelsand processes. Announcements made in thefirst half of 2009 about federal funding oppor-tunities for advanced biofuels are a much-needed step in the right direction but will notin themselves solve the fundamental problems.Experts have suggested a range of solutions

to bring advanced biofuels to market sooner,including rethinking the revised RFS mandatelevels and requirements to avoid supportingincreased corn ethanol. Another proposal isto tie existing support, such as tax credits forbiofuels, to the overall sustainability of a fuel.1

For example, support could be provided onlyfor biofuels with lifecycle greenhouse gasemissions reductions of at least 50 percentrelative to petroleum fuels, with additionalincentives provided for higher emissionreductions. A related proposal that would alsohelp moderate food prices is to tie the taxcredit to the price of corn, lowering it to zero

ounting evidence of the pitfallsof first-generation biofuels,growing pressure to address cli-mate change, and the global

economic crisis are putting the United States ata crossroads in energy policy. The country nowfaces a choice: continue with the current poli-cies and hope for the best, or take the opportu-nity to learn from past mistakes and rethinkthe role of biofuels for the future. If the wrongdecisions are made today, the nation—and theworld—could miss out on important opportu-nities for change for years to come.The big challenge for the United States now

is to accelerate the transition to second-genera-tion biofuels. But can the country reach its goalof 36 billion gallons of biofuels by 2022, whilealso ensuring environmentally and socially sus-tainable growth?Three broad efforts in U.S. policy would

make biofuel production more sustainable andensure that the use of biofuels contributes tothe global effort to reduce greenhouse gasemissions without sacrificing environmental orsocial standards. These are: (1) spur the rapiddevelopment of cellulosic and advanced biofu-els; (2) develop sustainability standards; and(3) create a holistic energy policy across alltransportation-related sectors.

1. Spur the rapid development of cellulosicand other advanced biofuels that significantlyreduce greenhouse gas emissions, using exist-ing economic instruments and other tools.Even though the Energy Independence and

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when corn prices reach a certain level.2 Thismay help keep food and grain prices in checkby moderating the demand for corn ethanolwhen prices are high but providing incentiveswhen prices are low.Exemptions from other taxes could be made

contingent on the use of cellulosic or otheradvanced biofuels that meet goals for reducinggreenhouse gas emissions. For instance, theMassachusetts Clean Energy Biofuels Act,signed in July 2008, exempts cellulosic ethanolfrom the state’s gasoline tax if it achieves a 60-percent reduction in greenhouse gas emissionsrelative to gasoline.3 The same could be doneon the federal level.Looking beyond the U.S. production base,

some observers have recommended eliminat-ing or suspending the ethanol import tariff asa way to moderate pressure on domestic landresources and ethanol prices and spur the pro-duction and use of non-corn ethanol.4 Thereis evidence, for example, that expanding theU.S. ethanol supply to include more sugarcaneethanol imports from Brazil could reduce pres-sure on U.S. cropland, reduce the costs of corn,and provide greater climate benefits.5

Recommendations for spurring rapid devel-opment of cellulosic and advanced biofuels:

• Use existing and new economic instruments,such as the blending tax credits, to spur devel-opment of advanced biofuels, and phase outincentives for corn ethanol.

• Base the tax credits for ethanol and biodieselon performance, with fuels that achieve deepergreenhouse gas emissions reductions eligiblefor greater support. Or, set a floor for govern-ment support that requires lifecycle reductionsof at least 50 percent or better.

• Revisit the Renewable Fuel Standard mandateto ensure that it will promote second-genera-tion biofuels instead of propping up first-gen-eration biofuels.

• Lower or eliminate the ethanol import tariff forfuels that meet sustainability criteria.

2. Develop sustainability standards andmakegovernment support conditional onmeetingthese standards.While the revised Renewable Fuel Standard

does not directly acknowledge the need forsustainability standards, it requires minimumgreenhouse gas emissions reductions from bio-fuels based on a complete lifecycle analysis,including indirect effects. The mandate alsorequires that biofuel production not harm theenvironment or natural resources.The EPA released its proposed rules for

implementing the revised RFS in early May2009, and final rules were not expected beforethe end of the year at the earliest. Although theagency has outlined ways to include land useeffects in greenhouse gas estimates, some bio-fuels proponents have made it clear that theyare opposed to including these measures, inpart because of concerns about whether indi-rect land use impacts should be viewed glob-ally, and in part because of how other pres-sures on land—rising populations, for exam-ple—are accounted for in calculations. TheEPA has clarified that the final rules must betransparent, based on the best available sci-ence, and include a clearly articulated method-ology. They should also be flexible enoughto accommodate future updates as scientificunderstanding of indirect effects improves.Several federal agencies, including the U.S.

Departments of Energy and Agriculture, arecontemplating the role of sustainability stan-dards for biofuels under the auspices of theBiomass Research and Development Board. InOctober 2008, the Board released a NationalBiofuels Action Plan designed to promoteinteragency coordination and realize signifi-cant second-generation biofuels productionwithin 15 years.6 According to the plan, theBoard seeks to develop sustainability criteria,benchmarks, and indicators that will helpdetermine best practices in agriculture andland use practices, efficient production, andeconomic viability, among other areas. How-ever, the plan does not envision mandatoryrequirements or a certification program.Establishing these two elements would helpstrengthen the system and guarantee that bio-


The Road Ahead: Policy Options for Sustainable U.S. Biofuels

fuels meet minimum criteria. The CaliforniaLow Carbon Fuel Standard plans to addresssustainability issues stemming from land useand may offer a model for lowering green-house gas emissions over time.One specific policy option is to encourage

biofuel producers and processors to adopt sus-tainable production and processing practices.Compliance with the sodbuster and swamp-buster programs, which are designed to pre-vent grassland and wetland conversion, is arequirement for farmers to qualify for directpayments under USDA regulations.7 Compli-ance with these two programs and with newones developed specifically for feedstock cropscould be recognized in this context, with indi-vidual producers rewarded for their participa-tion or excluded from incentives if they do notparticipate. Including biofuels in the programsdeveloped under the recently established Officeof Ecosystem Services and Markets could alsohelp encourage more sustainable production.8

Sustainable production could also be recog-nized at the refinery level or even at the retaillevel, with the feedstocks identified in terms ofpercentage volume or a lifecycle greenhousegas estimate, giving consumers a role indemanding cleaner and greener fuels.

Recommendations for developing sustain-ability standards for biofuels:

• Adopt a federal low-carbon fuel standard thatreduces the carbon content of transportationfuels over time.

• Work with ongoing multi-stakeholderprocesses to establish internationally acceptedsustainability standards and certificationmechanisms for biofuels.

• Create incentives for sustainable production ofbiofuel feedstocks in current and future farmsupport and other programs by making gov-ernment support conditional on performanceand compliance with sustainability standards.

• Acknowledge production of sustainable biofu-els through labeling at the retail level.

3. Create a holistic energy policy across alltransportation-related sectors.Biofuel production affects and is affected

by a wide range of policies, including thoserelated to agriculture, energy, the environment,and climate change, as well as those promotingnational security, rural development, and jobcreation.While the EISA touches on manydiverse policy areas, it does not deal with therelative importance of biofuels in a renewableenergy portfolio, their long-term significancein U.S. energy use, or their role in a newenergy economy.The new Biofuels Interagency Working

Group, announced in May 2009, is taskedwith addressing the range of policy issues andobstacles related directly to biofuels, such asproduction, supply, flex-fuel vehicles, and sus-tainability. But this narrow approach fails tosituate biofuels as part of a larger transporta-tion and energy system and may allow impor-tant opportunities to remain unexplored.In the transport sector, liquid biofuels can

serve as a temporary bridge to a more efficientsystem based on electric vehicles and poweredby renewable energy. Plug-in hybrid-electricvehicles (PHEV) emit 30–60 percent feweremissions per mile compared to similar con-ventional vehicles, and pure electric vehiclesare expected to perform even better due tohighly efficient motors.9 An electric transportsystem is not possible with the current electric-ity transmission system and requires a transi-tion to a more flexible, responsive, and smartergrid. Complementary policies include adopt-ing ambitious national renewable energy tar-gets and advanced feed-in laws that make iteasier for small, clean energy producers to selltheir surplus electricity into the grid.By transitioning to electricity as an energy

source for transportation, transport fuelswould be relying on a far more diverse energymarket. The amount of renewable energy inthe world, including solar, wind, geothermal,biomass, hydropower, and ocean power, is sixtimes greater than the world’s energy use, andevery region of the world has at least one, ifnot more, of these resources.10 And, as dis-cussed in Sidebar 4 (page 24), using biomass




cient sustained private investment in more-sustainable alternatives in the absence of addi-tional incentives. Given the country’s currentpolicy and economic structures, there is alarge probability that corn ethanol will con-tinue to dominate domestic biofuel produc-tion, even though other biofuels might delivermuch greater climate, environmental, andsocial benefits.The United States has a real opportunity to

adjust course and ensure that clean and sus-tainable biofuels, rather than just more biofu-els, are a priority. The experience of recentyears has demonstrated the dangers of pushingblindly for increased biofuel production with-out considering the unintended consequences.The challenge for a red, white, and green pathis to ensure that second-generation biofuels aredeveloped quickly while avoiding the mistakesof the past.

to provide electricity and heat rather than liq-uid transportation fuels offers clearer environ-mental benefits.Improvements in vehicle efficiency are

needed as well to reduce demand for fuels, butany fuels that are used should be as sustainableas possible. The country should also focus onimproving public transit options and othertransportation alternatives to further minimizefuel demand.

Recommendations for ensuring policycoherence across all transportation-relatedsectors:

• Create a broad transportation policy that looksbeyond biofuels to more-efficient vehicles,electric/plug-in vehicles, better urban design,and investments in good public transportationsystems and rail.

• Increase investment in electric vehicle tech-nologies, including a national smart-grid toencourage vehicle-to-grid net metering anddevelopment of improved batteries.

• Reconsider the best use of biofuels and bio-mass, looking specifically at lifecycle green-house gas studies on biomass used forelectricity and heat.

• Adopt ambitious national renewable energytargets and advanced feed-in laws that enablesmall producers to sell their surplus electricityinto the grid at a fair price and set a carbonperformance standard for electricity.

The costs of expanding U.S. corn ethanolproduction have been felt in food and fuelprices, and prospects are not good for suffi-


Aerial view of sugarcane fields on Maui, Hawaii.

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mittee on Problems of the Environment (SCOPE)International Biofuels Project Rapid Assessment, 22–25September 2008, Gummersbach, Germany (Ithaca, NY:Cornell University, 2009), p. 2.

11. Asia-Pacific Economic Cooperation, “APEC BiofuelsActivities by Member Economy,” www.biofuels.apec.org/member_activities.html, viewed 6 March 2009.

12. See, for example, Congressional Budget Office(CBO), The Impact of Ethanol Use on Food Prices andGreenhouse-Gas Emissions (Washington, DC: April 2009).

13. Joseph Fargione et al., “Land Clearing and the BiofuelCarbon Debt,” Science, 29 February 2008, pp. 1235–38;Timothy Searchinger et al., “Use of U.S. Croplands forBiofuels Increases Greenhouse Gases Through Emissionsfrom Land Use Change,” Science, 29 February 2008, pp.1238–40.

14. H.R. 6: Energy Independence and Security Act of 2007,19 December 2007, available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h6enr.txt.pdf.

15. Simla Tokgoz et al., Emerging Biofuels: Outlook ofEffects on U.S. Grain, Oilseed, and Livestock Markets(Ames, IA: Center for Agricultural and Rural Develop-ment, Iowa State University, July 2007).


1. U.S. Government Accountability Office, DOE Lacks aStrategic Approach to Coordinate Increasing Productionand Infrastructure Development and Vehicle Needs (Wash-ington, DC: June 2007), p. 10.

2. Renewable Fuels Association (RFA), “Historic U.S.Fuel Ethanol Production,” www.ethanolrfa.org/industry/statistics/#A, viewed 17 February 2009.

3. Ethanol data for 2008 from F.O. Licht,World Ethanoland Biofuels Report, 23 October 2008. Figure 1 from thefollowing sources: ethanol data for 1990–2007 from RFA,“Historic Fuel Ethanol Production,” op. cit. note 2; etha-nol data for 2008 from F.O. Licht, op. cit. this note, p. 72;biodiesel data for 1990–2007 from National BiodieselBoard (NBB), “Estimated US Biodiesel Production byFiscal Year,” www.biodiesel.org/pdf_files/fuelfactsheets/Production_Graph_Slide.pdf, viewed 17 February 2009;biodiesel data for 2008 from F.O. Licht,World Ethanoland Biofuels Report, 26 March 2009.


1. Oil use from U.S. Energy Information Administration(EIA), “Table 5.13c Estimated Petroleum Consumption:Transportation Sector, 1949–2007,” in Annual EnergyReview (Washington, DC: 2009); vehicles data from U.S.Government Accountability Office, DOE Lacks a StrategicApproach to Coordinate Increasing Production and Infra-structure Development and Vehicle Needs (Washington,DC: June 2007), p. 32.

2. Elisabeth Bumiller and Adam Nagourney, “Bush:‘America Is Addicted to Oil,’” International Herald Tri-bune, 1 February 2006.

3. EIA, Emissions of Greenhouse Gases Report(Washington, DC: 3 December 2008).

4. For more information, see U.S. Department ofEnergy, Energy Efficiency and Renewable Energy, “Alter-native and Advanced Fuels,” www.afdc.energy.gov/afdc/fuels/, viewed 6 March 2009.

5. Joe Monfort, “Despite Obstacles, Biofuels ContinueSurge,”Vital Signs Online (Washington, DC: WorldwatchInstitute, April 2008); F.O. Licht,World Ethanol andBiofuels Report, 23 October 2008. Conversion from litersto gallons from Oak Ridge National Laboratory (ORNL),“Bioenergy Ethanol and Biodiesel Conversion Factors,”http://bioenergy.ornl.gov/papers/misc/energy_conv.html,viewed 17 February 2009.

6. Table 1 from F.O. Licht, op. cit. note 5, and from F.O.Licht,World Ethanol and Biofuels Report, 26 March 2009.

7. Worldwatch calculations based on F.O. Licht,WorldEthanol and Biofuels Report, 10 June 2008, on Monfort,op. cit. note 5, and on F.O. Licht, op. cit. note 5.

8. Peter du Pont, ECO-Asia Clean Development andClimate Program, “Biofuels in Asia: An Analysis ofSustainability Options,” presentation at the BrookingsInstitution, Washington, DC, 10 April 2009.

9. Monfort, op. cit. note 5; F.O. Licht, op. cit. note 5;F.O. Licht, op. cit. note 6. Conversion factors from ORNL,op. cit. note 5.

10. F.O. Licht,World Ethanol and Biofuels Report, 23September 2008; R. W. Howarth et al., “Rapid Assessmenton Biofuels and Environment: Overview and Key Find-ings,” in R.W. Howarth and S. Bringezu, eds., Biofuels:Environmental Consequences and Interactions withChanging Land Use, Proceedings of the Scientific Com-


Endnotes

4. Calculation based on U.S. Energy InformationAdministration (EIA), “Table 11: Liquid Fuels Supply andDisposition,” in Annual Energy Outlook 2009 (Washing-ton, DC: March 2009) and on EIA, “Errata for Biofuels inthe U.S. Transportation Sector as of 10/15/07,” www.eia.doe.gov/oiaf/analysispaper/errata_biofuels.html.

5. U.S. Federal Trade Commission, 2008 Report on Eth-anol Market Concentration, available at www.ftc.gov/os/2008/11/081117ethanolreport.pdf.

6. Ibid.

7. RFA, “Biorefinery Locations,” www.ethanolrfa.org/industry/locations, updated 5 March 2009.

8. U.S. Department of Agriculture (USDA), NationalAgricultural Statistics Service (NASS), “ProspectivePlantings” (Washington, DC: Agricultural Statistic Board,31 March 2009), pp. 1, 27.

9. Figure of 4.2 billion bushels from Christopher Doer-ing, “U.S. Corn for Ethanol to Rise, Growth to Slow:USDA,” Reuters, 13 February 2009. Figure 2 from USDA,Economic Research Service (ERS), “Supply and Use:Corn,” in Feed Grains Database, www.ers.usda.gov/Data/feedgrains, updated 1 December 2008.

10. EIA, Annual Energy Outlook 2008 (Washington, DC:June 2008); EIA, Table A2 in Annual Energy Outlook 2009Early Release (Washington, DC: December 2008). EIA’sprojections assume that the Renewable Fuel Standardenacted in the Energy Independence Security Act of 2007will be extended indefinitely.

11. NBB, “Commercial Biodiesel Production Plants,”www.biodiesel.org/buyingbiodiesel/producers_marketers/Producers%20Map-Existing.pdf, updated 29 September2008.

12. Ibid.

13. F.O. Licht, 26 March 2009, op. cit. note 3.

14. NBB, “Biodiesel Production Plants Under Construc-tion or Expansion (September 29, 2008),” at www.biodiesel.org/buyingbiodiesel/producers_marketers/Producers%20Map-Construction.pdf.

15. Sean Hargreaves, “Calming Ethanol-Crazed CornPrices,” CNN Money, 30 January 2007; Peter Robison,“Ethanol’s Boom Holds Hidden Costs: Higher FoodPrices,” International Herald Tribune, 12 February 2007;Robert Siegel, “High Corn Prices Cast Shadow OverEthanol Plants,” All Things Considered (National PublicRadio), 15 July 2008; “Ethanol to Bolster US Corn Price,Plantings–Report,” Reuters, 6 March 2009. Figure 3 fromthe following sources: data for 2000–07 from USDA,NASS database, www.nass.usda.gov, updated 30 Decem-ber 2008; data for 2008 from USDA Economics, Statisticsand Market Information System (ESMIS), http://usda.mannlib.cornell.edu/usda/current/AgriPric/AgriPric-12-30-2008.pdf.

16. Congressional Budget Office (CBO), The Impact ofEthanol Use on Food Prices and Greenhouse-Gas Emissions(Washington, DC: April 2009), p. 7.

17. Richard Stillman, Mildred Haley, and Ken Mathews“Grain Prices Impact Entire Livestock Production Cycle,”Amber Waves, March 2009.

18. CBO, op. cit. 16, p. 6.

19. Ibid., pp. 11–12.

20. Kenneth Musante, “Oil Slides to Three-week Low,”CNNMoney.com, 10 February 2009.

21. Ibid.; Clifford Krauss, “Ethanol, Just Recently aSavior, Is Struggling,”New York Times, 11 February 2009.

22. Doering, op. cit. note 9; Russell Gold and Ana Cam-poy, “Oil Industry Braces for Drop in U.S. Thirst forGasoline,”Wall Street Journal, 13 April 2009.

23. Don Hofstrand, “Profitability Prospects for the CornEthanol Industry,” Renewable Energy Newsletter (Agricul-tural Marketing Resource Center), January 2009; KateGalbraith, “Economy Shifts, and the Ethanol IndustryReels,”New York Times, 4 November 2008. Figure 4 fromthe following source: Robert Sharp, Platts, e-mails toAmanda Chiu, Worldwatch Institute, 28 January 2009 and15 April 2009.

24. Doering, op. cit. note 9; Jennifer Kho, “U.S. EthanolIndustry Eyes Valero’s Bid for VeraSun,” RenewableEnergyWorld.com, 24 February 2009.

25. Kho, op. cit. note 24; Jessica Resnick-Ault, “AventineBankruptcy Unlikely to Offset Ethanol Oversupply,”DowJones Newswires, 8 April 2009.

26. Kho, op. cit. note 24; Krauss, op. cit. note 21; “PacificEthanol Suspends Plants In Idaho, California,” Reuters, 2March 2009.

27. Kho, op. cit. note 24.

28. Based on interviews with Iowa State professors andextension agents conducted by Raya Widenoja, World-watch Institute, summer and fall 2007.

29. Estimate of 34 percent from John Farrell, New RulesProject, Institute for Local Self-Reliance, “Ownership &Scale of Renewable Energy,” PowerPoint presentation atLocal Energy Initiatives Forum, Cloquet, MN, 13 Septem-ber 2007; RFA, op. cit. note 7; no more than 21 percentfrom U.S. Environmental Protection Agency (EPA),“Regulation of Fuels and Fuel Additives: Changes toRenewable Fuel Standard Program,” pre-published draftimplementation rules (Washington, DC: 5 May 2009),p. 191.

30. Ben Lefebvre and William Lemos, “Outlook ’09: USBiofuels Industry Expected to Consolidate,” ICIS.ComNews, 31 December 2008; Joshua Boak, “IndependentEthanol Producers Face a Tough Future,” Los AngelesTimes, 10 April 2009.

31. Farrell, op. cit. note 29.

32. David Morris, Energizing Rural America: Local Own-ership of Renewable Energy Production Is the Key (Wash-ington, DC: Center for American Progress, January 2007).

33. David Swenson, “Economic Impact of Locally OwnedBiofuels Facilities,” Renewable Energy Newsletter (Agri-cultural Marketing Resource Center), January 2009.

34. American Coalition for Ethanol, “Ethanol 101: Bene-fits of Ethanol,” www.ethanol.org/index.php?id=34&parentid=8, viewed 9 March 2009; David Swenson,Department of Economics, Iowa State University Exten-


Endnotes

Endnotes

sion, “Determining Biofuels Economic Impacts Consid-ering Local Investment Levels,” PowerPoint presentation,available at www.leopold.iastate.edu/research/marketing-_files/workshop06/presentations/bwg2.pdf; Sarah A. Lowand Andrew M. Isserman, “Chapter 5: Ethanol and theLocal Economy,” in Corn-Based Ethanol in Illinois and theU.S.: A Report from the Department of Agricultural andConsumer Economics, University of Illinois (Urbana-Champaign, IL: November 2007).

35. See, for example, the discussion of corn prices andlivestock production in Robert Wisener, “Impact of Eth-anol on the Livestock and Poultry Industry,” RenewableEnergy Newsletter (Agricultural Marketing Resource Cen-ter), October 2008.

36. U.S. House of Representatives, Appropriations Com-mittee Subcommittee on Energy and Water, Hearing onGas Prices and Vehicle Technology, “Testimony of BobDinneen, President & CEO, Renewable Fuels Association,”14 February 2008.

37. John M. Urbanchuk, Economic Contribution of theBiodiesel Industry (Wayne, PA: LECG, November 2007);2008 numbers by Manning Feraci, NBB, as reported in“Biodiesel Industry Stands Ready to Meet 2009 Goals,”Refrigerated Transporter, 12 January 2009.

38. Urbanchuk, op. cit. note 37.

39. Global Insight, U.S. Metro Economies, Current andPotential Jobs in the U.S. Economy, prepared for the U.S.Conference of Mayors and the Mayors Climate ProtectionCenter (Lexington, MA: October 2008).

40. Robert Pollin et al., Green Recovery: A Program toCreate Good Jobs and Start Building a Low-Carbon Econ-omy (Amherst, MA: Center for American Progress andPolitical Economy Research Institute of the University ofMassachusetts-Amherst, September 2008).

41. U.S. Department of Energy, Office of Science, “Cellu-losic Ethanol: Benefits and Challenges,” genomicsgtl.energy.gov/biofuels/benefits.shtml, viewed 9 March 2009.

42. Bio Economic Research Associates, U.S. EconomicImpact of Advanced Biofuels Production: Perspectives to2030 (Cambridge, MA: February 2009).

43. Doug Koplow, A Boon to Bad Biofuels: Federal TaxCredits and Mandates Underwrite Environmental Damageat Taxpayer Expense (Washington, DC: Friends of theEarth and Earth Track, April 2009), p. 26.

44. Mark Clayton, “The ‘Holy Grail’ of Biofuels Now inSight,” Christian Science Monitor, 13 February 2009.

45. Ibid.

46. Ibid.

47. F.O. Licht, “U.S. Ethanol Industry at a Crossroads,”World Ethanol and Biofuels Report, 2 March 2009.

48. Ben Block, “United States Considers Ethanol BlendIncrease,” Eye on Earth (Worldwatch Institute), 13 Febru-ary 2009.

49. Krauss, op. cit. note 21.

50. Clifford Krauss, “Bigger Share of Ethanol Is Sought inGasoline,”New York Times, 6 March 2009; Steven Mufson,

“Ethanol Producers Press for Higher Limits,”WashingtonPost, 6 March 2009; Block, op. cit. note 48; Tina Seeley,“Agriculture Secretary in Talks to Raise Ethanol Blend,”Bloomberg, 6 February 2009.

Climate and Environmental Impactsof Current Biofuels

1. Worldwatch Institute, Biofuels for Transport: GlobalPotential and Implications for Sustainable Energy Agri-culture (London: Earthscan, 2006).

2. Ibid.

3. Ibid., p. 162.

4. Ibid.; Suani Coelho et al., “Brazilian Sugarcane Eth-anol: Lessons Learned,” Energy for Sustainable Develop-ment, June 2006.

5. Worldwatch Institute, op. cit. note 1, pp. 183–88.

6. Figure 5 from the following sources: Estimate of 12percent from Jason Hill et al., “Environmental, Economic,and Energetic Costs and Benefits of Biodiesel and EthanolBiofuels,” Proceedings of the National Academy of Sciences,25 July 2006; 18 percent from Alexander E. Farrell et al.,“Ethanol Can Contribute to Energy and EnvironmentalGoals,” Science, 27 January 2006, pp. 506–08, corrected inScience, 23 June 2006, p. 1748 (The January 2006 estimateof 13.8 percent was updated to 18 percent in June 2006due to new information about emissions from limestoneand nitrogen applications.); U.S. Environmental Pro-tection Agency (EPA), “Greenhouse Gas Impacts ofExpanded Renewable and Alternative Fuels Use,” factsheet (Washington, DC: April 2007). See also MichaelWang, May Wu, and Hong Huo, “Life-cycle Energy andGreenhouse Gas Emission Impacts of Different CornEthanol Plant Types,” Environmental Research Letters,April–June 2007, p. 12, and Emanuela Menichetti andMartina Otto, “Energy Balance & Greenhouse GasEmissions of Biofuels from a Life Cycle Perspective,” inR.W. Howarth and S. Bringezu, eds., Biofuels: Environ-mental Consequences and Interactions with ChangingLand Use, Proceedings of the Scientific Committee onProblems of the Environment (SCOPE) InternationalBiofuels Project Rapid Assessment, 22–25 September2008, Gummersbach, Germany (Ithaca, NY: CornellUniversity, 2009), pp. 81–109.


8. Farrell et al., op. cit. note 6; Wang, Wu, and Huo, op.cit. note 6.

9. Joseph Fargione et al., “Land Clearing and the BiofuelCarbon Debt,” Science, 29 February 2008, pp. 1235–38;Timothy Searchinger et al., “Use of U.S. Croplands forBiofuels Increases Greenhouse Gases Through Emissionsfrom Land Use Change,” Science, 29 February 2008, pp.1238–40.

10. Hill et al., op. cit. note 6.

11. EPA, op. cit. note 6.

12. R.W. Howarth et al., “Rapid Assessment on Biofuelsand Environment: Overview and Key Findings” and N.H.


Endnotes

Ravindranath et al., “Greenhouse Gas Implications ofLand Use and Land Conversion to Biofuel Crops,” in R.W.Howarth and S. Bringezu, eds., op. cit. note 6, pp. 3–4 andpp. 111–25.

13. Finn Danielsen et al., “Biofuel Plantations on For-ested Lands: Double Jeopardy for Biodiversity and Cli-mate,” Conservation Biology, April 2009, pp. 348–58.

14. Ibid.

15. Ravindranath et al., op. cit. note 12.

16. Ibid.

17. Farrell et al., op. cit. note 6.

18. Wang, Wu, and Huo, op. cit. note 6, p. 5; EPA, “Chap-ter 6. Agriculture,” in U.S. Greenhouse Gas InventoryReports: Inventory of U.S. Greenhouse Gas Emissions andSinks: 1990–2006 (Washington, DC: April 2008).

19. Howarth et al., op. cit. note 12, pp. 3–4.

20. Mike Duffy, “Where Will the Corn Come From?”Ag Decision Maker (Iowa State University Extension),November 2006; Paul C. Westcott, “U.S. Ethanol Expan-sion Driving Changes Throughout the Agricultural Sec-tor,” Amber Waves, September 2007, pp. 13–14.

21. National Research Council (NRC),Water Implicationsof Biofuels Production in the United States (Washington,DC: National Academies Press, 2008), p. 34.

22. Ibid.

23. Dan Charles, “Iowa Farmers Look to Trap Carbon inthe Soil,”National Public Radio, 15 July 2007.

24. Joseph Pikul et al., “Change in Surface Soil CarbonUnder Rotated Corn in Eastern South Dakota,” SoilScience Society of America Journal, 21 November 2008.

25. Jason Hill et al., “Climate Change and Health Costs ofAir Emissions from Biofuels and Gasoline,” Proceedings ofthe National Academy of Sciences, 10 February 2009, pp.2077–82.

26. Natural Resources Defense Council, “Unlocking thePromise of Ethanol: Promoting Ethanol While ProtectingAir Quality,” fact sheet (New York: February 2006); MarkZ. Jacobson, “Effects of Ethanol (E85) versus GasolineVehicles on Cancer and Mortality in the United States,”Environmental Science and Technology, 18 April 2007, pp.4150–57; EPA, “E85 and Flex Fuel Vehicles,” fact sheet(Washington, DC: October 2006).

27. EPA, “Biodiesel,” fact sheet (Washington, DC: Octo-ber 2006).

28. NRC, op. cit. note 21, pp. 27–36.

29. Howarth et al., op. cit. note 12, pp. 6–7.

30. U.S. National Oceanic and Atmospheric Adminis-tration, “Survey Cruise Records Second-Largest ‘DeadZone’ in Gulf of Mexico Since Measurements Began in1985,” press release (Washington, DC: 28 July 2008).

31. R. Dominguez-Faus et al., “The Water Footprint ofBiofuels: A Drink or Drive Issue?,” Environmental Scienceand Technology, 1 May 2009, p. 3007.

32. Joe Barret, “How Ethanol Is Making the Farm Belt

Thirsty,”Wall Street Journal, 5 September 2007; NRC, op.cit. note 21, pp. 19–26; Carey Gillam, “Ethanol CrazeEndangers U.S. Plains Water: Report,” Reuters, 20 Sep-tember 2007; Martha G. Roberts, Timothy D. Male, andTheodore P. Toombs, Potential Impacts of BiofuelsExpansion on Natural Resources: A Case Study of theOgallala Aquifer Region (Washington, DC: EnvironmentalDefense, September 2007).

33. Dennis Keeney and Mark Muller,Water Use by Eth-anol Plants: Potential Challenges (Minneapolis: Institutefor Agriculture and Trade Policy, October 2006), p. 4.

34. NRC, op. cit. note 21, p. 51.

35. Yi-Wen Chiu, Brian Walseth, and Sangwon Suh,“Water Embodied in Bioethanol in the United States,”Environmental Science & Technology, 15 April 2009, pp.2688–92.

36. NRC, op. cit. note 21, p. 51. For soybean irrigation,see: R. Dominguez-Faus et al., “The Water Footprint ofBiofuels: A Drink or Drive Issue?,” Environmental Scienceand Technology, 1 May 2009; Jerry Wright et al., “Pre-dicting the Last Irrigation for Corn and Soybeans inCentral Minnesota,”Minnesota Crop eNews (Universityof Minnesota Extension Service), 1 August 2006; DannyRogers and William Sothers, “Predicting the FinalIrrigation for Corn, Grain Sorghum, and Soybeans,”Irrigation Management Series (Manhattan, KS: Coop-erative Extension Service, Kansas State University, May1996); E.B. Whitty, D.L. Wright, and C.G. Chambliss,Water Use and Irrigation Management of Agronomic Crops(Gainesville, FL: University of Florida Institute of Foodand Agricultural Sciences Extension, reviewed November2008 (revised April 2002)).

37. Barret, op. cit. note 32; NRC, op. cit. note 21, pp.19–26; Roberts, Male, and Toombs, op. cit. note 32.

38. Roberts, Male, and Toombs, op. cit. note 32.

39. Renewable Fuels Association, “Biorefinery Locations,”www.ethanolrfa.org/industry/locations, updated 5 March2009; Kris Bevill et al., “Proposed Ethanol Plant List:2008 United States & Canada PART 1,” Ethanol ProducerMagazine, April 2008.

40. Jim Giles, “Can Biofuels Rescue American Prairies?”New Scientist, 18 August 2007, pp. 8–9.

41. U.S. Department of Agriculture, “ConservationReserve Program and Conservation Reserve Enhance-ment Program,” Farm Bill Forum Comment Summary &Background (Washington, DC: 2006).

42. Ibid.; Dominguez-Faus et al., op. cit. note 36, p. 3008;Ralph Heimlich, “USDA’s Conservation Reserve Program:Is It Time to Ease into Easements?” (Washington, DC:Resources for the Future, 8 September 2008).

43. Heimlich, op. cit. note 42.

44. Rolf R. Koford, “Density and Fledging Success ofGrassland Birds in Conservation Reserve Program Fieldsin North Dakota and West-central Minnesota,” Studies inAvian Biology, vol. 19 (1999).

45. Global Invasive Species Programme, Biofuel Cropsand the Use of Non-Native Species: Mitigating the Risks of



2008; “Bionavitas Announces Breakthrough Algae GrowthTechnology for Biofuels Production,” Reuters, 24 February2009; “Mass. Firm Opens Algae-Growing Greenhouse,”CNET Tech News, 21 October 2008; David Perlman,“Decoded Algae Could Aid Biofuel, Climate Work,” SanFrancisco Chronicle, 10 April 2009; Julian N. Rosenberget al., “A Green Light for Engineered Algae: RedirectingMetabolism to Fuel a Biotechnology Revolution,” CurrentOpinion in Biotechnology, vol. 19 (2008), pp. 430–36;Yusuf Chrisi, “Research Review Paper: Biodiesel fromMicroalgae,” Biotechnology Advances, vol. 25 (2007), pp.294–306; Katie Fehrenbacher, “15 Algae Startups BringingPond Scum to Fuel Tanks,” Earth2Tech, 27 March 2008.

8. Jason Hill et al., “Environmental, Economic, andEnergetic Costs and Benefits of Biodiesel and EthanolBiofuels,” Proceedings of the National Academy of Sciences,25 July 2006, p. 11208; Emanuela Menichetti and MartinaOtto, “Energy Balance & Greenhouse Gas Emissions ofBiofuels from a Life Cycle Perspective,” in R.W. Howarthand S. Bringezu, eds., Biofuels: Environmental Conse-quences and Interactions with Changing Land Use, Pro-ceedings of the Scientific Committee on Problems of theEnvironment (SCOPE) International Biofuels ProjectRapid Assessment, 22–25 September 2008, Gummers-bach, Germany (Ithaca, NY: Cornell University, 2009), pp.84–85; Michael Wang, May Wu, and Hong Huo, “Life-cycle Energy and Greenhouse Gas Emission Impacts ofDifferent Corn Ethanol Plant Types,” EnvironmentalResearch Letters, April–June 2007, p. 12; M.R. Schmer etal., “Net Energy of Cellulosic Ethanol from Switchgrass,”Proceedings of the National Academy of Science, 15 January2008, pp. 464–69.

9. Schmer et al., op. cit. note 8.

10. Wang, Wu, and Huo, op. cit. note 8, p. 9.

11. Wang, Wu, and Huo, op. cit note 8 shows an 86 per-cent reduction in greenhouse gases compared to gasoline;Alexander E. Farrell et al., “Ethanol Can Contribute toEnergy and Environmental Goals,” Science, 27 January2006, pp. 506–08 shows an 88 percent reduction; Schmeret al., op. cit. note 8, shows a 94 percent reduction; EPA,“Greenhouse Gas Impacts of Expanded Renewable andAlternative Fuels Use,” fact sheet (Washington, DC: April2007); 12 percent corn ethanol reduction from Hill et al.,op. cit. note 8, p. 3; 18 percent from Farrell et al., op. cit.this note.

12. See, for example, Schmer et al., op. cit. note 8, andDavid Tilman, Jason Hill, and Clarence Lehman,“Carbon-Negative Biofuels from Low-Input High-Diversity Grassland Biomass,” Science, 8 December 2006.

13. Lew Fulton et al., Biofuels for Transport: AnInternational Perspective (Paris: International EnergyAgency, 2004), pp. 61–62.

14. Schmer et al., op. cit. 8; Farrell, et al., op. cit. 11.

15. Oak Ridge National Laboratory, “Biofuels fromSwitchgrass: Greener Energy Pastures,” fact sheet (OakRidge, TN: 1998)

16. Capehart, op. cit. note 3, p. 5; average 2008 corn yieldfrom USDA, “USDA Forecasts Robust Corn and SoybeanCrops, Despite Flooding,” press release (Washington, DC:

Invasion (Nairobi: May 2008); Christopher Evan Budden-hagen, Charles Chimera, and Patti Clifford, “AssessingBiofuel Crop Invasiveness: A Case Study,” PLoS ONE, 22April 2009.

Benefits of “Advanced” Biofuels”

1. Susanne Retka Schill, “Miscanthus versus Switch-grass,” Ethanol Producer Magazine, 22 October 2007;David Busby et al., “Yield and Production Costs for ThreePotential Dedicated Energy Crops in Mississippi andOklahoma Environments,” paper presentation at theSouthern Agricultural Economics Association AnnualMeeting, Mobile, AL, February 2007; Louisiana StateUniversity Ag Center, “New Varieties, Energy Cane High-light LSU AgCenter Sugarcane Field Day,” press release(St. Gabriel, LA: 20 July 2006).

2. See, for example, Humberto Blanco-Canqui and R.Lal, “Soil and Crop Response to Harvesting Corn Resi-dues for Biofuel Production,”Geoderma, 15 October2007, pp. 355–62, and Dan Walters and Haishun Yang,“How Much Corn Stover Can Be Removed for BiofuelFeedstock Without Compromising Soil Quality andErosion Concerns,” presentation at the 2007 Biofuels andWater Resources Mini-Retreat, University of Nebraska-Lincoln School of Natural Resources, Lincoln, NE, 19January 2007.

3. Tom Capehart, Cellulosic Biofuels: Analysis of PolicyIssues for Congress (Washington, DC: CongressionalResearch Service, 7 November 2008), pp. 5–6; BiomassResearch and Development Initiative, Increasing FeedstockProduction for Biofuels: Economic Drivers, EnvironmentalImplications, and the Role of Research (Washington, DC:December 2008).

4. Martha Groom, Elizabeth Gray, and Patricia Towns-end, “Biofuels and Biodiversity: Principles for CreatingBetter Policies for Biofuel Production,” ConservationBiology, 28 June 2008, pp. 602–09.

5. Global Invasive Species Programme, Biofuel Cropsand the Use of Non-Native Species: Mitigating the Risks ofInvasion (Nairobi: May 2008).

6. Robert D. Perlack et al., “Biomass as a Feedstock fora Bioenergy and Bioproducts Industry: The TechnicalFeasibility of a Billion-Ton Annual Supply,” A Joint StudySponsored by the U.S. Department of Energy (DOE) andthe U.S. Department of Agriculture (USDA) (Oakridge,TN: Oak Ridge National Laboratory, April 2005), p. 16.

7. Sidebar 2 from the following sources: NationalRenewable Energy Laboratory (NREL), A Look Back atthe U.S. Department of Energy’s Aquatic Species Program:Biodiesel from Algae (Golden, CO: July 1998); DOE, “AlgalBiofuels,” fact sheet (Washington, DC: 2008); DOE, “AlgalBiofuels Technology Roadmap Workshop,” www.orau.gov/algae2008/default.htm, viewed 20 April 2009; JosephB. Verrengia, NREL, “Algae-to-Fuel Research EnjoysResurgence at NREL,” Renewable Energy World.com, 16April 2009; Michael Kanellos, “Algae Biodiesel: It’s $33 aGallon,”Green Tech Media, 3 February 2009; Solix, “WhyAlgae,” www.solixbiofuels.com/html/why_algae.html,viewed 20 April 2009; David Biello, “Biofuel of theFuture: Oil from Algae,” Scientific American, October

Endnotes


31. Ibid.

32. See, for example, Biotechnology Industry Organiza-tion, “Biofuels Defined,” biofuelsandclimate.wordpress.com/about/, viewed 20 April 2009.

33. EPA, op. cit. note 30, p. 199.

34. H.R. 6: Energy Independence and Security Act of 2007,19 December 2007, available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h6enr.txt.pdf; USDA, Economic ResearchService, “2008 Farm Bill Side-by-Side. Title IX: Energy,”www.ers.usda.gov/FarmBill/2008/titles/titleixenergy.htm,viewed 18 February 2009; Jesse Caputo, “Federal BiomassPolicy: Current and Future Policy Options,” presented atThe Heinz Center and the Pinchot Institute for Conser-vation Symposium, “Ensuring Forest Sustainability in theDevelopment of Wood Biofuels and Bioenergy,”Washing-ton, DC, 9 February 2009.

35. USDA, “USDA Approves First Ever Guaranteed Loanfor Commercial-Scale Cellulosic Ethanol Plant,” pressrelease (Washington, DC: 16 January 2009).

36. USDA, “President Obama Issues Presidential Direc-tive to USDA to Expand Access to Biofuels,” press release(Washington, DC: 5 May 2009).

37. DOE, “DOE Selects Six Cellulosic Ethanol Plants forUp to $385 Million in Federal Funding,” press release(Washington, DC: 28 February 2007).

38. See, for example, Verenium, “Verenium AnnouncesFirst Commercial Cellulosic Ethanol Project,” pressrelease (Cambridge, MA: 15 January 2009).

39. Sandia National Laboratories, “90-Billion Gallon Bio-fuel Deployment Study: Executive Summary” (Livermore,CA: February 2009).


1. See, for example, Worldwatch Institute, Biofuels forTransport: Global Potential and Implications for Sustain-able Energy Agriculture (London: Earthscan, 2006); ASTMInternational, “New Biodiesel Specifications Published byASTM International,” press release (West Conshohocken,PA: October 2008).

2. Jinke van Dam et al., “Overview of Recent Develop-ments in Sustainable Biomass Certification,” Biomass andBioenergy, 19 May 2008, pp. 750–51.

3. See, for example, Roundtable on Sustainable Biofuels(RSB), “Version Zero of the RSB Principles and Criteria,”cgse.epfl.ch/page70341.html, viewed 14 April 2009; SteveCharnovitz, Jane Earley, and Robert Howse, An Examin-ation of Social Standards in Biofuels Sustainability Criteria(Washington, DC: International Food & AgriculturalTrade Policy Council, December 2008).

4. See, for example, RSB, op. cit. note 3, and van Dam etal., op. cit. note 2, pp. 749–80.

5. Finn Danielsen et al., “Biofuel Plantations on For-ested Lands: Double Jeopardy for Biodiversity andClimate,” Conservation Biology, April 2009, pp. 348–58.

6. See “Climate and Environmental Impacts of Biofuels”section earlier for discussion and references.

12 August 2008). Estimate assumes that each bushelyields 2.8 gallons of ethanol, the current average.

17. Schmer et al., op. cit. note 8, pp. 464–69; Tilman, Hill,and Lehman, op. cit. note 12, p. 1598.

18. Bruce A. Babcock et al., “Adoption Subsidies andEnvironmental Impacts of Alternative Energy Crops,”Briefing Paper 07-BP50 (Ames, IA: Iowa State UniversityCenter for Agricultural and Rural Development, March2007).

19. Tilman, Hill, and Lehman, op. cit. note 12, p. 1598.

20. Ibid.

21. John Kort, Michael Collins, and David Ditsch, “AReview of Soil Erosion Potential Associated with BiomassCrops,” Biomass and Bioenergy, April 1998, pp. 351–59;Les Murray and Louis B. Best, “Effects of SwitchgrassHarvest as Biomass Fuel on Grassland-Nesting Birds,”graduate research project supported by the NationalResources Conservation Service and Iowa State Univer-sity, January 2006, available at ftp://ftp-fc.sc.egov.usda.gov/NHQ/ecs/Wild/Biomass.pdf.

22. Kort, Collins, and Ditsch, op. cit. note 21, p. 351.

23. Perlack et al., op. cit. note 6; Schmer et al., op. cit.note 8, pp. 464–69.

24. Capehart, op. cit. 3, pp. 7, 13; Hosein Shapouri andMichael Salassi, Economic Feasibility of Ethanol Productionfrom Sugar in the United States (Washington, DC: USDAand Louisiana State University, July 2006), p. iv.

25. Capehart, op. cit. note 3.

26. Ibid.

27. Ibid.

28. Sidebar 3 from the following sources: Mark Brady etal., “Renewable Diesel Technology,” a white paper fromthe Renewable Diesel Subcommittee of the WashingtonState Department of Agriculture Technical Work Group(Olympia, WA: WSDA, 25 July 2007), pp. 4–6, 50;National Renewable Energy Laboratory (NREL), ResearchAdvances: Cellulosic Ethanol (Washington, DC: March2007); DOE, Advanced Fuels and Advanced Vehicles DataCenter, “Cellulosic Ethanol Production,” www.afdc.energy.gov/afdc/ethanol/production_cellulosic.html, viewed 17April 2009; Rainer Kalscheuer, Torsten Stölting andAlexander Steinbüchel, “Microdiesel: Escherichia ColiEngineered for Fuel Production,”Microbiology, vol. 152(2006), pp. 2529–36; David I. Bransby, Cellulosic BiofuelTechnologies, sponsored in part by the Southern StatesEnergy Board (Auburn, AL: February 2007), pp. 16–22;United Nations Conference on Trade and Development,Biofuel Production Technologies: Status, Prospects andImplications for Trade and Development (New York: 2008),pp. 9–15.

29. Environmental and Energy Study Institute (EESI),“Cellulosic Biofuels,” fact sheet (Washington, DC: July2008).

30. EPA, “Regulation of Fuels and Fuel Additives:Changes to Renewable Fuel Standard Program,” pre-pub-lished draft implementation rules (Washington, DC: 5May 2009), pp. 196–98.

Endnotes


20. Ibid., article 17.

21. Ibid.

22. Ibid.

23. Ibid., article 19.

24. Sidebar 4 from the following sources: N.D. Mortimeret al., Evaluation of the Comparative Energy, GlobalWarming and Socio-Economic Costs and Benefits ofBiodiesel (Sheffield, U.K.: Sheffield Hallam University,School of Environment and Development, ResourcesResearch Unit, 2003), pp. 39–41l; Worldwatch Institute,op. cit. note 1, pp. 188–91; Resource Dynamics Corp-oration, Combined Heat and Power Market Potential forOpportunity Fuels, Distributed Energy Program Report(Washington, DC: U.S. Department of Energy, EnergyEfficiency and Renewable Energy, August 2004); OwenBailey et al., An Engineering-Economic Analysis of Com-bined Heat and Power Technologies in a Grid Application(Berkeley, CA: Lawrence Berkeley National Laboratory,2002), pp. 3–5; Interlaboratory Working Group, “Chapter7,” in Scenarios of U.S. Carbon Reductions: PotentialImpacts of Energy-Efficient and Low-Carbon Technologiesby 2010 and Beyond (Oak Ridge, TN and Berkeley, CA:Oak Ridge National Laboratory and Lawrence BerkeleyNational Laboratory, 1997); Dennis Becker, “ForestBiomass and its Role in a National Renewable ElectricityStandard,” briefing presentation (Washington, DC:Environmental and Energy Study Institute, March 2009);biomass co-firing efficiency from National RenewableEnergy Laboratory, Biomass Cofiring: A RenewableAlternative for Utilities, fact sheet (Golden, CO: June2000), from European Bioenergy Networks, Biomass Co-Firing: An Efficient Way to Reduce Greenhouse GasEmissions (Jyväskylä, Finland: 2003), pp. 21–22, and fromJesse Caputo and James Hacker, Biomass Cofiring: ATransition to a Low-Carbon Future (Washington, DC:Environmental and Energy Study Institute, March 2009);Sweden from Swedish Energy Agency, “Sweden Has theHighest Proportion of Renewable Energy in the EU,”press release (Eskilstuna, Sweden: 17 December 2008),and from Laurie Goering, “Going Green: Entire SwedishCity Switches to Biofuels to Become EnvironmentallyFriendly,” Chicago Tribune, 3 March 2009; Ministry ofForeign Affairs of Denmark, “The Danish Example—Towards an Energy Efficient and Climate FriendlyEconomy,” October 2008, at http://en.cop15.dk/files/images/Articles/Danish-example/The-Danish-Example.pdf; U.S. Energy Information Agency (EIA), “Table 3.Electricity Net Generation From Renewable Energy byEnergy Use Sector and Energy Source, 2003–2007” and“Table 1.1. Net Generation by Energy Source: Total (AllSectors), 1994 through November 2008,” Electric PowerMonthly (Washington, DC: 13 February 2009); J.E.Campbell, D.B. Lobell, and C.B. Field, “Greater Trans-portation Energy and GHG Offsets from Bioelectricitythan Ethanol,” Science, 22 May 2009, pp. 1055–57.

25. See, for example, John Carey, “The Biofuel Bubble,”Business Week, 16 April 2009.


1. H.R. 6: Energy Independence and Security Act of 2007(EISA), 19 December 2007, available at www.govtrack.us/

7. See, for example, Alexander E. Farrell et al., “EthanolCan Contribute to Energy and Environmental Goals,”Science, 27 January 2006, pp. 506–08.

8. Michael Wang, May Wu, and Hong Huo, “Life-cycleEnergy and Greenhouse Gas Emission Impacts of Differ-ent Corn Ethanol Plant Types,” Environmental ResearchLetters, April–June 2007, pp. 1, 13.

9. Ibid.; Nicholas Zeman, “Coproducts Energy Value isRising,” Ethanol Producer Magazine, October 2007.

10. See, for example, Bill Hord, “Mead Ethanol PlantFiling Bankruptcy,”Omaha World Herald, 30 November2007, and Tony Kryzanowski, “$100 Million Invested inBio-Energy Expansion and Ethanol Plant,”ManureManager, undated.

11. See, for example, Center for Applied Energy Research,University of Kentucky, “Development of an IntegratedProcess to Convert Glycerin to Green Power in a BiodieselPlant” (Lexington, KY: 12 January 2009), and GeneralVortex Energy, Inc., “Fuel Sources for the General VortexCombustion Chamber,” www.generalvortex.com/GVCT_fuel_sources.html, viewed 15 April 2009.

12. U.S. Department of Agriculture, AgriculturalResearch Service, “Final Report,” InternationalConference on Sorghum for Biofuels, Houston, TX,19–22 August 2008.

13. Nicholas Zeman, “Crazy for Camelina,” BiodieselMagazine, February 2007; Patrick Barta, “Jatropha PlantGains Steam in Global Race for Biofuels,”Wall StreetJournal, 24 August 2007, p. A1.

14. Barta, op. cit. note 13; “Toxic Jatropha Not MagicBiofuel Crop, Experts Warn,” Reuters, 12 September 2007.

15. David R. Huggins and John P. Reganold, “No-Till:How Farmers Are Saving the Soil by Parking TheirPlows,” Scientific American, June 2008.

16. Chicago Climate Exchange, “Soil Carbon Manage-ment Offsets” (Chicago: September 2008).

17. Huggins and Reganold, op. cit. note 15; Ron Perszew-ski, “Push Continues for Residue to Be Used in EthanolProduction,”No-Till Farmer News, 9 January 2007.

18. Table 2 from the following sources: RSB, op. cit. note3; Council on Sustainable Biomass Production Web site,www.csbp.org, viewed 17 February 2009; EuropeanCommittee for Standardization (CEN), “New TechnicalCommittee on Sustainability of Biomass,” CEN Network-ing, June 2008, p. 2; Sustainable Biodiesel Alliance,“Principles and Baseline Practices for Sustainability,”www.sustainablebiodieselalliance.com/BPS1015draft.pdf,viewed 17 February 2009; Roundtable on SustainablePalm Oil Web site, www.rspo.org, viewed 15 April 2009;Roundtable on Responsible Soy Web site, www.responsiblesoy.org, viewed 15 April 2009.

19. European Parliament and Council of the EuropeanUnion, “Directive 2009/28/EC of the European Parlia-ment and of the Council of 23 April 2009 on the Promo-tion and Use of Energy from Renewable Sources andAmending and Subsequently Repealing Directives2001/77/EC and 2003/30/EC,” (Brussels: 23 April 2009).

Endnotes


Yacobucci, Biofuel Incentives: A Summary of Federal Pro-grams (Washington, DC: CRS, 29 July 2008).

22. Yacobucci, op. cit. note 21. See also IRS, op. cit. note20.

23. U.S. Farm Bill of 2008, op. cit. note 21; Yacobucci, op.cit. note 21.

24. Yacobucci, op. cit. note 21. Extended per the FarmBill of 2008, op. cit. note 21; CBO, op. cit. note 6, p. 2.

25. Brent D. Yacobucci, Selected Issues Related to anExpansion of the Renewable Fuel Standard (Washington,DC: CRS, 31 March 2008).

26. Ben Geman, “Bipartisan Senate Bill Seeks LowerTariffs on Ethanol Imports,”New York Times, 18 March2009.

27. Yacobucci, op. cit. note 21; IRS, op. cit. note 20; AnneAustin, “Industry Welcomes Tax Credit Extension,” Bio-diesel Magazine, December 2008.

28. Yacobucci, op. cit. note 21.

29. “Biofuels: E.U. Sets New Tax on Imported U.S. Bio-diesel,” E&E News, 13 March 2009.

30. Austin, op. cit. note 27.

31. Fred Sissine et al., Energy Provisions in the AmericanRecovery and Reinvestment Act of 2009 (Washington, DC:CRS, 3 March 2009).

32. DOE, “DOE to Invest up to $4.4 Million in SixInnovative Biofuels Projects at U.S. Universities,” pressrelease (Washington, DC: 10 September 2008).

33. DOE, “DOE Selects Six Cellulosic Ethanol Plants forUp to $385 Million in Federal Funding,” press release(Washington, DC: 28 February 2007)

34. DOE, op. cit. note 32.

35. DOE, Energy Efficiency and Renewable Energy,“Ethanol Incentives and Laws,” www.afdc.energy.gov/afdc/progs/ind_state_laws.php/FL/ETH, viewed 12 March2009.

36. Sidebar 6 from the following sources: ARB, ClimateChange Proposed Scoping Plan: A Framework for Change(Sacramento, CA: October 2008); ARB, “Low Carbon FuelStandard Program,” www.arb.ca.gov/fuels/lcfs/lcfs.htm,updated 5 March 2009; ARB, Proposed Regulation toImplement the Low Carbon Fuel Standard Volume I, StaffReport: Initial Statement of Reasons (Sacramento, CA:5 March 2009); Margot Roosevelt, “California to LimitGreenhouse Gas Emissions of Vehicle Fuels,” Los AngelesTimes, 24 April 2009; Timothy Gardner, “ANALYSIS:California Rule Could End Ethanol’s Honeymoon,”Reuters, 27 April 2009.

37. DOE, op. cit. note 35.

38. Ibid.

39. H.R. 6: Energy Independence and Security Act of 2007,op. cit. note 1.

40. Renewable Fuels Association, “Legislative Actions:State,” www.ethanolrfa.org/policy/actions/state/, viewed4 May 2009.

congress/bill.xpd?bill=h110-6.

2. Ibid.

3. Figure 6 from ibid.

4. Ibid.

5. Ibid. For more on waivers under the Renewable FuelStandard, see Brent D. Yacobucci,Waiver Authority Underthe Renewable Fuel Standard (RFS) (Washington, DC:Congressional Research Service (CRS), 5 May 2008).



8. Ibid.

9. U.S. Environmental Protection Agency (EPA), “EPAProposes New Regulations for the National RenewableFuel Standard Program for 2010 and Beyond,” fact sheet(Washington, DC: May 2009), p. 3.

10. Ibid.

11. Ibid.

12. Joseph Fargione et al., “Land Clearing and the BiofuelCarbon Debt,” Science, 29 February 2008, pp. 1235–38;Timothy Searchinger et al., “Use of U.S. Croplands forBiofuels Increases Greenhouse Gases Through Emissionsfrom Land Use Change,” Science, 29 February 2008, pp.1238–40; California Air Resources Board (ARB), ProposedRegulation to Implement the Low Carbon Fuel StandardVolume I, Staff Report: Initial Statement of Reasons(Sacramento, CA: 5 March 2009).

13. EPA, “Regulation of Fuels and Fuel Additives:Changes to Renewable Fuel Standard Program,” pre-published draft implementation rules (Washington, DC:5 May 2009).

14. EPA, “EPA Lifecycle Analysis of Greenhouse GasEmissions from Renewable Fuels,” fact sheet (Washing-ton, DC: May 2009), p. 3.

15. See, for example, Union of Concerned Scientists,“EPA Proposes Rule to Reduce Global Warming Emis-sions from Biofuels,” press release (Washington, DC: 5May 2009).


17. Ibid.

18. 12 billion gallon nameplate capacity per U.S. Depart-ment of Energy (DOE), Energy Efficiency and RenewableEnergy, “Biofuels Data” (Washington, DC: updated 23March 2009).

19. EPA, op. cit. note 13, pp. 55–61.

20. CBO, op. cit. note 6, p. 2. See also U.S. Internal Rev-enue Service (IRS), “Chapter 2: Fuel Tax Credits andRefunds or IRS Instructions for Form 720,” in IRS Publi-cation 510: Excise Taxes, available at www.irs.gov/publications/p510.

21. U.S. Farm Bill of 2008, Public Law 110-234; Brent D.

Endnotes


Before the U.S. Senate Committee on Homeland Securityand Government Affairs,” Hearing on Fuel Subsidies andImpact on Food Prices, 7 May 2008; for climate benefits,see U.S. Department of Energy (DOE), “Ethanol Green-house Gas Emissions,” Alternative Fuels and AdvancedVehicles Data Center, www.afdc.energy.gov/afdc/ethanol/emissions.html, updated 4 February 2009.

6. Biomass Research and Development Board, NationalBiofuels Action Plan (Washington, DC: October 2008).

7. U.S. Department of Agriculture (USDA), “HighlyErodible Land and Wetland Conservation ComplianceProvisions,” Farm Bill Forum Comment Summary andBackground,” available at www.usda.gov/documents.

8. USDA, “USDA Announces New Office of EcosystemsServices and Markets,” press release (Washington, DC: 18December 2008).

9. Electric Power Research Institute, EnvironmentalAssessment of Plug-In Hybrid Electric Vehicles Volume 1:Nationwide Greenhouse Gas Emissions (Palo Alto, CA: July2007), p. 5-5 through 5-7; DOE and U.S. EnvironmentalProtection Agency, “Electric Vehicles (EVs),” www.fueleconomy.gov/feg/evtech.shtml, viewed 27 April 2009.

10. Six times greater from Christopher Flavin, Low-Carbon Energy: A Roadmap (Washington, DC: World-watch Institute, 2008), p. 21.

The Road Ahead: Policy Options forSustainable U.S. Biofuels

1. See, for example, Clean Air Task Force et al., “AmericaNeeds a True Renewable Energy Policy,” press release,(Washington, DC: 9 February 2009).

2. See, for example, Robbin S. Johnson and C. FordRunge, “Ethanol: Train Wreck Ahead?” Issues in Scienceand Technology (University of Texas at Dallas), 9 October2007.

3. Massachusetts Executive Office of Energy andEnvironmental Affairs, “Clean Energy Biofuels Act,”www.mass.gov/legis/laws/seslaw08/sl080206.htm, viewed3 March 2009.

4. See, for example, “Bernanke Backs Lower Tariff onBrazil Ethanol,” Reuters, 28 February 2008; Mark Steil,“Rising Corn Prices Heat Up Ethanol Tariff Debate,”Minnesota Public Radio, 15 April 2008.

5. For cropland discussion, see Cole Gustafson, “BiofuelEconomics: How Many Acres Will Be Needed For Bio-fuels? Part II,”North Dakota State University ExtensionService, www.ag.ndsu.edu/news/columns/biofuels-eco-nomics/biofuel-economics-how-many-acres-will-be-needed-for-biofuels-part-ii/, viewed 3 March 2009; forcosts, see Bruce A. Babcock, Iowa State University Centerfor Agricultural and Rural Development, “Statement

Endnotes


defined, 7microalgae and, 17reliance on, 24, 32–33switchgrass and, 18

Biomass Research and Development Board, 31Biorefinery Assistance Program, 20blend wall, 12blender’s tax credit, 28blue grass, 16Brazil, 7–8, 28

CCalifornia Air Resources Board, 29California Low Carbon Fuel Standard (2007),

28–29, 32camelina, 22Canada, 8carbon credits, 22carbon debt, 14carbon dioxide, 13, 17–18, 24carbon storage

corn stover and, 16in feedstocks, 13switchgrass and, 18

Caribbean Basin Initiative, 28cellulose

converting to biofuels, 5policy options, 6

cellulosic ethanoldefined, 7environmental impact of, 13, 15evaluating fuel lifecycle, 17fossil energy balance, 13greenhouse gas emissions and, 18job creation from, 12locations of refineries, 20production costs, 19

Chicago Carbon Exchange, 22climate impacts

of biofuels, 13–15mitigating, 16, 25

coal, 24co-firing process, 24

Aadvanced biofuels, see second-generation biofuelsagricultural crops, see feedstocksair pollution, 15Algal Biofuels Roadmap, 17American Recovery and Reinvestment Act (2009), 28Aquatic Species Program, 17aquifers, 15Archer Daniels Midland, 9Argonne National Laboratory, 17, 22Arkansas, 23Asian grass, 16

Bbagasse, 13biobutanol, 7biochemical platform, 19biodiesel

algae for, 17climate impacts of, 14defined, 7energy crops, 16environmental impact of, 15feedstocks, 7, 10, 14, 17fossil energy balance, 13global production, 8job creation from, 11–12production incentives, 28production increases, 7, 9–10production process, 7, 19water use, 15

biodiversity conservation, 15, 18, 25biofuels

climate impacts, 13–15defined, 7environmental impacts, 13–15evaluating fuel lifecycle, 13production by country, 8promise of, 7–8

Biofuels Interagency Working Group, 32biogas, 7, 22biomass

advanced biofuels from, 16

Index

Colorado, 17–18combined heat-and-power (CHP) method, 24Congressional Budget Office, 10Conservation Reserve Program (CRP), 15, 18corn ethanol

economic impacts, 10–11, 15environmental impacts, 5, 13–15evaluating fuel lifecycle, 17greenhouse gas emissions and, 8, 13locations of refineries, 20policy requirements, 27production costs, 19production increases, 9–10production process, 7water use, 15

corn production and costs, 9–10corn stover, 16Council on Sustainable Biomass Production, 23

Ddeforestation, 27Denmark, 24Department of Energy (DOE)

as funding source, 20, 28on job creation, 12on microalgae costs, 17on sustainability standards, 31

distiller’s grains, 22

EE. coli, 19economic impacts

of corn and soybean production, 10–11, 15of global recession, 12

electricity, 24, 32–33energy balance, 13, 17energy cane, 16energy crops, 16Energy Independence and Security Act (2007), 26,

29–32environmental impacts

of biofuels, 13–15first-generation biofuels, 5, 13–15policy reporting requirements, 27second-generation biofuels, 18

Environmental Protection Agencybiofuel policies, 26–27implementation rules, 27, 31on blend levels, 12on greenhouse gas reductions, 13–14, 18on Renewable Fuel Standard, 31

esterification, 7ethanol, see also cellulosic ethanol; corn ethanol

biochemical process, 19defined, 7

energy crops, 16feedstocks, 7, 9, 13–14, 16food costs and, 10–11fossil energy balance, 13industry, 9–11job creation from, 11–12production increases, 7, 9production process, 7, 19production subsidies and incentives, 12, 26–29sugar cane, 13, 19tariffs on, 28thermochemical process, 19trade, 8VEETC and, 28water use, 15

ethanol blending limit, 12European Union

biofuel production, 8import taxes, 28land use change study, 25sustainability criteria, 23

Ffeedstocks

advanced biofuels and, 16carbon storage in, 13changing, 22ethanol production and, 9land use changes and, 14microalgae and, 17producing biofuels from, 5, 7sustainable production, 32thermochemical process, 19

fertilizers, greenhouse gases and, 13–14first-generation biofuels

environmental impacts, 5, 13–15land use changes and, 14production process, 7

Fisher-Tropsch liquids (FTLs), 19food costs, ethanol production and, 10–11fossil energy balance, 13fossil fuels

evaluating fuel lifecycle, 13transitioning, 24

fuel lifecycle, 13, 17, 27

Ggammagrass, 16gasoline

biofuels and, 7environmental impact of, 15ethanol blending limit, 12ethanol displacement, 9evaluating fuel lifecycle, 13MTBE additive, 9


Index


Obama, Barack, 20Office of Ecosystem Services and Markets, 32Ogallala Aquifer, 15oil palm, 21–22

Ppesticides, greenhouse gases and, 13petroleum diesel

biofuels and, 7evaluating fuel lifecycle, 13

PHEV (plug-in hybrid-electric) vehicles, 32phosphorus, 14POET, 9policies

federal and state, 26–29for sustainable biofuels, 5–6, 30–33

pollution, biofuel contribution to, 14–15poplar trees, 16population, land use changes and, 14prairie grasses, 18promise of biofuels, 7–8

RRenewable Fuel Standard (RFS)

background, 26climate impacts and, 23corn ethanol production and, 15job creation and, 12policy options for, 31requirements, 8, 26

Renewable Fuels Association, 11, 29Roundtable on Responsible Soy, 23Roundtable on Sustainable Biofuels, 22–23Roundtable on Sustainable Palm Oil, 23

SSandia National Laboratory, 20second-generation biofuels

benefits, 16–20fossil energy balance, 13job creation from, 11–12policy options, 6, 30–33production process, 5, 7sustainability of, 5, 21–25technologies for, 19

sodbuster program, 32soil erosion, 18Solix Biofuels, 17–18soybean production

economic impacts, 10–11environmental impacts, 14

Spain, 17splash-and-dash loophole, 28subsidies for ethanol production, 12sugarcane ethanol

VEETC and, 28Georgia, 20glycerin, 22grain sorghum, 7, 22–23GreenFuel Technologies, 17greenhouse gas emissions

advanced biofuels and, 16corn ethanol and, 5, 8evaluating fuel lifecycle, 13fertilizers and, 13–14microalgae and, 17pesticides and, 13policies on, 26–27reducing, 22transportation sector and, 7

Gulf of Mexico, 15

Hheating, 24, 33hydrolysis, 19

IIowa, 11, 18, 22

Jjatropha, 22

Lland conservation, 15, 18land use changes

biofuel sustainability and, 21–23climate impact of, 14feedstocks and, 14policies and, 25, 27, 29, 31population increases and, 14, 31

Lawrence Berkeley National Laboratory, 24, 28lignin, 18

Mmanure, 22Massachusetts Clean Energy Biofuels Act (2008), 31meat consumption, 14microalgae, 17Minnesota, 11Mississippi River, 15MTBE gasoline additive, 9

NNational Biofuels Action Plan, 31nitrogen, 14–15nitrous oxide, 13–14no-till cultivation, 22

OOak Ridge National Laboratory, 24

Index

Index

greenhouse gas emissions and, 13production costs, 19

sulfur dioxide, 24sustainability

developing criteria, 21–22federal/state policies on, 26–27policy options for, 5–6, 30–33of second-generation biofuels, 5, 21–25

Sustainable Biodiesel Alliance, 23swampbuster program, 32Sweden, 24switchgrass, 16, 18, 28syngas, 19

Ttariffs, 28tax credits, 28technologies for advanced biofuels, 19thermochemical platform, 19third-generation biofuels, 17transportation sector

greenhouse gas emissions and, 7energy policy, 32–33transitioning fuels, 24

UUnited States

biofuel production, 8–12biomass usage, 24ethanol production, 7

University of California, 14University of Minnesota, 15U.S. Department of Agriculture (USDA)

Conservation Reserve Program, 15, 18on corn production, 9on sustainability standards, 31

U.S. Farm Bill (2008), 20, 28U.S. National Academy of Sciences, 15

VVeraSun, 9–10volumetric ethanol excise tax credit (VEETC), 28

WWashington, 12water consumption, 15, 17water quality

corn ethanol production and, 15microalgae and, 17switchgrass and, 18

Western Climate Initiative, 29wildlife conservation, 15, 18willow trees, 16wood chips, 16, 20, 22



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Red,White, and Green:Transforming U.S. Biofuels


Ethanol demand in the United States is nearing 10 billion gallons per year,

enough to displace about 5 percent of domestic gasoline consumption. But

government mandates and other incentives envision a much larger role for

U.S. biofuels, with a goal of reaching 36 billion gallons of use by 2022.

Recent experience has shown that the environmental costs of producing

“first-generation” biofuels, such as corn ethanol, likely outweigh the benefits.

Large-scale production depends on intensive energy, chemical, and water

inputs and can pollute water, destroy wildlife habitat, and degrade soils.

First-generation biofuels also result in minimal, if any, reductions in green-

house gas emissions, and the increased demand for biofuels is contributing

to rising food prices and deforestation worldwide.

Advanced biofuels such as cellulosic ethanol show promise as a way to over-

come many of these problems and to mitigate climate change, but decision

makers must take the time to get biofuels right. This includes setting verifi-

able industry standards that identify more-sustainable production methods

and guarantee improvements.

The biofuels challenge facing the United States today is to find new trans-

portation and energy policies that take the country down a truly red, white,

and green path—before it is too late.

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