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A Technical Detail with Big Implications

By Leticia Phillips posted May 30, 2014
The debate over American biofuels policy has centered on the Renewable Fuels Standard (RFS), but there’s another issue unfolding under the radar with significant implications for renewable fuels – the Reid vapor pressure (RVP) volatility waiver. RVP may be a technical issue, but inconsistent application of the volatility waiver by the U.S. Environmental Protection Agency (EPA) is limiting widespread introduction of E15 ethanol-blended gasoline, threatening compliance with the RFS, and creating an arbitrary barrier to ethanol use in America.

The debate over American biofuels policy has centered on the Renewable Fuels Standard (RFS), but there’s another issue unfolding under the radar with significant implications for renewable fuels – the Reid vapor pressure (RVP) volatility waiver. 

RVP may be a technical issue, but inconsistent application of the volatility waiver by the U.S. Environmental Protection Agency (EPA) is limiting widespread introduction of E15 ethanol-blended gasoline, threatening compliance with the RFS, and creating an arbitrary barrier to ethanol use in America. 

That’s why UNICA has written to EPA urging consistent treatment of RVP requirements for both E10 and E15 – action that would reduce the potential for “boutique fuels,” maximize flexibility for refiners and gasoline marketers, and pave the way to greater ethanol use in the U.S. as mandated by the RFS.

Lower RVP, Lower Emissions – Brazil’s Experience

First, a little background on what RVP is and why it matters. The RVP is a common measure of gasoline’s volatility, defined as the absolute vapor pressure exerted by liquids at 100 degrees Fahrenheit. EPA regulates vapor pressure of fuel sold at retail stations during the summer ozone season to diminish health risks by reducing evaporative emissions of gasoline that contribute to ground-level ozone. 

EPA currently allows E10 a one pound-per-square-inch (psi) RVP volatility tolerance, enabling ethanol to be blended into conventional gasoline year-round without requiring marketers to secure specially tailored gasoline blendstock. EPA currently does not extend this same one-psi waiver to E15, making sales extremely difficult for gasoline marketers, as they have to incur the added costs and logistics of obtaining appropriate blendstocks. 

A higher percentage of renewable ethanol, as opposed to fossil fuel-based gasoline, makes environmental and climate sense: Less fossil fuel equals fewer harmful emissions. In Brazil, ethanol has been blended well above 10 percent in gasoline (up to 25 percent for all light-duty vehicles) while lowering emissions like carbon monoxide, sulfur oxides, and other particulate emissions without any degradation in general air quality. 

Brazil has accepted RVP ranges between 6.5–10 psi for gasoline depending on ethanol blend levels for years as a reasonable compromise between refinery flexibility, gasoline quality, and environmental requirements. 

In fact, Brazil’s experience over the past 30 years shows if high RVP becomes a concern for any given gasoline stock, then increasing the ethanol blend is a simple and cost-effective solution to lower RVP. 

EPA Findings Extend From E10 To E15

Ample scientific justification exists for EPA to extend the RVP volatility waiver to E15, and recent analyses show the vapor pressure of E15 is slightly lower than E10 while creating greater reductions in carbon monoxide and exhaust hydrocarbon emissions. 

EPA’s initial decision to grant the one-psi waiver to E10 was based on its findings that increased volatility associated with the waiver was offset by reduced emissions if low-RVP gasoline was available for E10 blending. Unfortunately, insufficient supply of low-RVP gasoline blendstock exists in the U.S. to accommodate broad E15 blending without the one-psi waiver. 

Using the same reasoning EPA used to issue the one-psi waiver to E10, the waiver should also apply to E15. As long as the waiver applies to E10, there’s no logical reason it shouldn’t also extend to E10.

Another Market-Based Alternative

But even if EPA doesn’t follow this logic, another alternative exists. Instead of extending the one-psi waiver to E15, EPA could instead discontinue the E10 waiver; effectively ensuring “standard” gasoline blendstock would have an RVP low enough to facilitate both E10 and E15 blending. 

Either way, EPA should treat both E10 and E15 consistently in the marketplace with regard to RVP. This issue is critical not only from an economic perspective, but from an environmental perspective, as E15 is attempting to enter the U.S. market and RFS-obligated parties are increasingly interested in higher-level ethanol blends.

Environmental And Economic Imperatives

Given both the Obama Administration’s efforts to combat climate change, and the unique role of U.S. regulations on global acceptance of alternative fuels, we encourage the EPA to act quickly by either extending the one-psi waiver to E15 or removing the waiver entirely for E10.

Our association has played an active role in smart fuels policy formation, and looks forward to the opportunity to continue working with EPA on this important issue – not only to help reduce U.S. dependence on fossil fuels while creating economic benefits for American drivers, but to help mitigate climate change. 

EU Member States miss another opportunity to lead on advanced biofuels

By Géraldine Kutas posted May 28, 2014
After the stalemate at the December Council where a blocking minority of Member States prevented the adoption of a Council common position on ILUC, Member States’ Permanent Representatives finally agreed today on a compromise text proposed by the Greek Presidency after two Ad Hoc Working Party meetings took place in April and May. The Council position will still need to be officially endorsed by EU Energy Ministers on 13 June.

After the stalemate at the December Council where a blocking minority of Member States prevented the adoption of a Council common position on ILUC, Member States’ Permanent Representatives finally agreed today on a compromise text proposed by the Greek Presidency after two Ad Hoc Working Party meetings took place in April and May. The compromise text was discussed already last week by the COREPER but there were still some concerns on the legal nature of the advanced biofuels targets and the text could not be agreed. The Council position will still need to be officially endorsed by EU Energy Ministers on 13 June.

The compromise text – which didn’t really introduce any ground breaking changes compared to the text proposed by the Lithuanians in December 2013 – proposes a non-binding 0.5% reference number for the use of advanced biofuels (with plenty of options for Member States to actually adopt an even lower target) and keeps a cap for conventional biofuels at 7%.

In the spirit of traditional European compromises, this low number bridges the gap between the more ambitious Member States wishing to develop advanced biofuels and those who don’t want to be bound by a commitment. Bottom line for the biofuel sector is that the compromise doesn’t offer any incentives to invest in second and third generation biofuels. Worse still, in its attempt to square the circle on the topic the Council is even likely to block any substantial investments.   

Developing advanced biofuels requires considerable R&D efforts and their market uptake is necessarily slow before they reach commercial scale. Greater clarity on the policy environment is an essential parameter for such investments to take place. It is no wonder why “the need for regulatory certainty” have become such buzzwords in Brussels in the past few years.

I repeat: biofuels, despite all the discussion on ILUC, currently represent the only economically viable way to decarbonise transport, provided that the EU manages to find a way to guarantee they are produced in a sustainable way.

Despite this, EU decision-makers continue to overlook the economic parameters within which the biofuels industry operates. First of all, there is no legislative clarity and there will not be any until the whole legislative process is finalised, which isn’t likely to happen before 2015. Second, the current measures on the table would harm the conventional biofuels industry even though it is precisely from this part of the industry that investments in more sustainable production are likely to come from. Third, the EU is not providing any truly interesting incentive for the development of advanced biofuels. On which premises is the biofuels industry supposed to invest in more sustainable production solutions?

Outside Europe, the Brazilian Sugarcane Ethanol (BSCE) industry demonstrates that conventional biofuels can be produced sustainably, alongside advanced biofuels. UNICA member companies produce second generation biofuels from waste and residues (i.e. bagasse and straw) as well as bio-electricity (by 2020 bioelectricity produced from BSCE can cover 18% of Brazil’s electricity needs).

As a matter of fact, by 2015 Brazil will have four commercial plants producing cellulosic ethanol (GranBio, Raizen, Odebrecht Agroindustrial e Petrobras) with a production for the first year foreseen at 168 million liters according to BNDES. The EU would be an interesting market for Brazil, if only the legislative framework was a bit clearer.

But the game isn’t over yet. The second reading in the European Parliament is just around the corner. One can only hope that the new MEPs adopt a more balanced approach to the file once they reopen it in the second half of the year. 

“Misleading” Study Confuses Fossil Fuel Use with Environmental Benefits

By Joel Velasco posted May 22, 2014
Scholarly research and government policy have long documented the environmental benefits of sugarcane biofuels – first and foremost significant greenhouse gas emissions reduction compared to fossil fuels. Unfortunately, a Northwestern University recent report stirred controversy by ignoring key facts about the relationship between this clean fuel and air quality in Sao Paulo, Brazil to suggest drivers burning more gasoline caused ozone pollution levels to fall 20% from 2010-2011.

Scholarly research and government policy have long documented the environmental benefits of sugarcane biofuels – first and foremost, significant greenhouse gas emissions reduction compared to fossil fuels. 

Unfortunately, a recent report stirred controversy by ignoring key facts about the relationship between this clean fuel and air quality in São Paulo, Brazil to suggest drivers burning more gasoline than ethanol in flex fuel vehicles caused ozone pollution levels to fall 20% from 2010-2011.

Let’s look at the facts. Research by the Air Pollution Laboratory at São Paulo University’s Faculty of Medicine reported replacing gasoline and diesel in the city’s vehicle fleet with sugarcane biofuels would significantly improve air quality – saving more than 850 lives per year, preventing more than 12,000 hospital admissions, and saving Brazil more than $190 million annually.  São Paulo has been doing just that, running its light vehicles on high-blends of ethanol (yes, E15+ is just fine!) and 400 buses in São Paulo are running on renewable diesel, known locally as Diesel de Cana.

So how could these researchers come up with such contradictory findings? A combination of ignoring actual air quality data, misinterpreting the sources of ozone formation, ignoring fundamental principles of photochemistry, leaving out changes in fossil fuel quality, and basing findings on a short time period.

Brazilian Experts Say Northwestern Report “Misleading”

Five Brazilian climate and environmental experts, including a coordinating lead author of the United Nations Intergovernmental Panel on Climate Change’s 5th Assessment Report, presented this rebuttal in recent correspondence, saying the report’s conclusions are “misleading.” 

According to these experts, the report’s primary data set has a number of shortcomings that results in questionable claims and inconsistent with actual air pollution measurements from the São Paulo state government’s environment agency (CETESB). The actual data tells a different story for the same period in the study:

  • Ozone pollution has worsened from 2009 (58.8% of year rated “good”) to 2011 (48.4% of year rated “good”)
  • 57 days were above ozone maximum standard level, in 2009 compared to 96 in 2011.

Moreover, the report didn’t consider all sources of ozone precursors, mainly nitrogen oxides (NOx) and volatile organic compounds (VOCs), ignoring high emitters like motorcycles and heavy-duty vehicles that burn fossil fuels like gasoline and high-sulfur diesel, as well as an increasing number of stationary sources, such as back up power generators, which were not included in the study.

These experts countered the erroneous claims pointing out that Brazilian fuel quality is improving, namely with reductions in sulfur content due to regulatory changes. These reductions, as well as improvements in engine technology is ignored by this ill-informed report.

Finally, in their rebuttals, these experts pointed out that the report’s three-year study period is “not sufficient to draw long-term conclusions such as the preference for a given fuel,” and real gasoline share “distorted” from a modeled and confirmed 10% share to a 50% as-shown share.  

As we have often said in these pages, everyone is entitled to their opinion, but not their own facts.

Ethanol: A Better Environmental Option

Add it all up, and the study’s findings about ethanol’s contribution to air quality are misleading at best. In fact, without cleaner-burning sugarcane biofuels fueling Brazilian vehicles and sugarcane field bagasse generating bioelectricity, the country’s greenhouse gas emissions from transportation and power generation would have been 22% higher in 2006 and could be 43% higher in 2020. Since March 2003, when flex fuel vehicles were first introduced in the Brazilian market, the use of ethanol has avoided over 240 million metric tons of CO2-eq in emissions, which is about what the state of Florida emits every year.

That reality is important, considering the climate change imperative. I second what these experts said in one of their comments. They warned “readers to take precautionary steps before following such recommendations for the use of fossil fuels instead of a recognizable advanced biofuel which could [be] sustainably produced and consumed in many regions throughout the world.” 

EU political groups are apathetic on transport issues

By Géraldine Kutas posted May 08, 2014
Having looked at the recently published manifestos of the European political groups, I realized surprisingly that the main groups, EPP and PES, do not even mention transport issues in their priorities for the next five years. Isn’t it odd?

Having looked at the recently published manifestos of the European political groups, I realized surprisingly that the main groups, EPP and PES, do not even mention transport issues in their priorities for the next five years.

Isn’t it odd? Transport is still one of the main sources of emissions in Europe, and in the world really. According to the European Commission, transport is the only sector where GHG emissions are still rising, and yet this seems not to be a major concern for the European political groups. Only the Greens and the Liberals mention transport and only the Greens have priorities on greener and sustainable transport.

To be honest, this doesn’t appear to be in the top-10 issues for the European Commission either, which in January proposed to remove transport specific targets from the 2030 Policy Framework. And, now that I think about it, only very few Member States raised concerns over the lack of transport targets and the proposed end of the Fuel Quality Directive (FQD) during the Energy and Environment Council meetings in March.

In my blog on “Full U-Turn on Decarbonizing European Transport”, ahead of the publication of the 2030 Package, I ironically said that it is good to know that the Commission thinks we can stop worrying about carbon emission in transport. Clearly, this isn’t true and the scientific body of the Commission, the JRC, just released a study which concludes that in every scenario considered the existing targets for 2020 (10% RED and 6% FQD) cannot be sustainably met without blending in more advanced biofuels, assuming they are available.

If the solution doesn’t come from the energy policy, it will come from the transport side, I thought! Maybe the Commission is going to issue another Communication on Transport – equivalent to the 2030 Climate and Energy Package – revamping the objective of the White Paper of 2011, or assessing the results achieved so far and raising awareness of what still needs to be done in the road to 2050. However, the White Paper was published only 3 years ago and I learned that a mid-term review will most likely only happen between 2015 and 2016. The highest levels of DG MOVE are not even thinking about a new White Paper yet.

Well, I guess the uncertainty over the biofuels policy cannot be cleared from the transport side either!

Meanwhile, biofuels still remain the most promising way to reduce transport emissions in the short and medium term. However, the ILUC discussion stopped in the last couple of years the developments (and the investments) of the biofuel industry and so far the EU hasn’t managed to provide legal certainty on how sustainable biofuels should be counted against the 2020 targets. Not only did a legal certainty not come from the energy policy, but the proposal put on the table in 2012 by DG CLIMA and DG Energy even risked (and still does) damaging also those sustainable biofuels with a very low-ILUC impact, only because they are food-based, such as Brazilian sugarcane ethanol.

As pointed out several times in my blogs, the Commission should work on a more balanced approach to the biofuels policy and the targets for sustainable transport should not be taken out from of the picture. For the first time, the candidates for the Commission Presidency from the main pan-European parties are debating publically on their priorities ahead of the elections, as a result of the changes introduced by the Lisbon Treaty, and this could have had the potential of raising the awareness of a wider audience than the usual ‘Brussels bubble’ on topics such as sustainable transport and biofuels. However, the candidates for the next Parliament – which is usually the institution that most promotes high standards of sustainability – missed the opportunity to be carriers of sustainable transport ideas and makes me wonder what will be the level of interest on these issues in the next 5 years. 

Our Authors

 

Géraldine Kutas, Head of International Affairs & Senior International Adviser to the President of UNICA Géraldine Kutas
Head of International Affairs & Senior International Adviser to the President

 

Leticia Phillips, Representative-North AmericaLeticia Phillips
Representative, North America

 

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