U.S. biofuels policy: Let’s not be fit for failure

Often to much acclaim, the Biden Administration has placed climate at the forefront of its political agenda. This includes commitments to decarbonize the electric power sector by 2035 and reach economy-wide net-zero greenhouse gas (GHG) emissions by mid-century. In fits and starts, Congress has also taken actions on climate, with bills that allocate funding for electric vehicle charging infrastructure and hydrogen power research and development (R&D). For the $18 billion U.S. biofuels industry, however, the path forward is as unclear as ever.

The Renewable Fuel Standard (RFS), first introduced in 2005 and later revised and expanded upon through 2010, remains the leading federal policy on biofuels. As we come up on 2022, the year in which the Environmental Protection Agency (EPA) will gain additional jurisdiction over the RFS, a period of reflection is warranted. What role can low-carbon fuels play in a transport decarbonization strategy amidst strong commitments by industry and state governments in support of battery electric vehicles? And how can competing demands for limited resources be reconciled to utilize biofuel feedstocks as efficiently and sustainably as possible?

The RFS sets volume mandates for blending alternative, biomass-based fuels into the U.S. transportation mix. It promised to deliver affordable fuels compatible with vehicle technology and fueling infrastructure, all while benefitting the U.S. economy and the environment. However, food-based biofuels make up the majority of the fuel under the RFS program and they have high direct and indirect emissions impacts. Some of EPA’s analysis suggests they might even be worse for the climate than fossil fuels. The problem mostly comes from land-use change, when carbon-rich land is converted to cropland to meet the supply shortage of agricultural commodities caused by biofuel production. Cellulosic biofuels, on the other hand, provide much greater GHG emissions savings, but the industry has faced difficulties ramping up production.

Figure 1 presents a range of life-cycle GHG emissions for common biofuels, measured in grams of carbon dioxide equivalent (gCO2e) per megajoule (MJ) of fuel. These estimates, also known as a fuel’s carbon intensity (CI), are calculated for major environmental regulations such as the RFS and vary based on underlying modeling assumptions. EPA’s average fossil fuel baseline is included for comparison, calculated as the average CI between gasoline and diesel fuel.

Figure 1. Life-cycle GHG emissions estimates for common biofuels. Data is sourced from major regulatory studies including the EPA RIA, California LCFS, Oregon CFP, and EU RED. Direct GHG emissions reported in the EU RED are supplemented with indirect land-use change (ILUC) estimates reported in the MIRAGE model. RED II emissions estimates are supplemented with ILUC estimates drawn from the Valin/GLOBIOM model. All estimates are adjusted for a 25-year amortization period.

To date, RFS compliance has largely been met by biofuels produced from commodity crops like corn and soybean. Indeed, corn ethanol and soy biodiesel made up a staggering 96% of biofuel volumes produced in the United States between 2010 and 2019, calculated using data from EPA and the U.S. Energy Information Administration. Meanwhile, liquid cellulosic biofuels derived from agriculture and forestry residues have made up only 1% of biofuels produced in the United States since 2010.

Despite growing scientific understanding that food-based biofuels are associated with high GHG emissions, the United States is not on track to correct this. EPA is 16 months late (and counting) with its 2021 volume mandates. Squabbling between oil refiners and agricultural lobbyists dominates the biofuels news cycle, as exemplified by the small refinery exemption court case taken up by the U.S. Supreme Court earlier this year. While so much attention is on the demands of two industry giants, far less goes toward building up and scaling advanced biofuel technologies with abundant domestic resources. Cost constraints aside, the U.S. Department of Energy has estimated that cellulosic biofuels produced from domestic resources could displace up to 30% of U.S. petroleum consumption. That’s a sizeable amount.

Amidst all the political deadlock, it’s easy to grow pessimistic about the future role of low-carbon fuels. Thankfully, though, we have the European Union (EU) to look to as an example. The European Commission’s recent policy proposal, “Fit for 55,” is one of the most ambitious cross-sector carbon reduction strategies ever laid out. Within the transport fuels sector, Fit for 55 replaces a previous renewable energy blending target with a 13% GHG reduction target; adds a 2.6% energy mandate for hydrogen and e-fuels made from renewable electricity; and increases its advanced biofuel sub-target to 2.2%. Notably, the proposal also maintains a 7% cap, by energy content, on the contribution of food-based biofuels toward meeting targets. Although there are always areas for improvement, this new directive aims to transform the EU fuel supply rather than maintain the status quo. With low-carbon fuels, then, the European Union is operating miles ahead of the United States.

It’s clear that relying on food-based biofuels will not solve, and might only exacerbate, the climate crisis. Any regulation that prioritizes these feedstocks instead of zero-carbon alternatives is sure to fall short. Since the introduction of the RFS, regulatory and legislative holdups have served to limit progress on domestic uptake of truly low-carbon fuels. So maybe it’s time to scrap the federal biofuels policy playbook and start on a whole new vision for how to support clean transport fuels.

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