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Unintended Consequences from EPA Proposal Could Limit U.S. Access to Advanced Biofuels

By Leticia Phillips posted Feb 17, 2017
The U.S. Environmental Protection Agency (EPA) has accepted comments on a proposal that would allow, among other things, biofuel producers to partially process renewable feedstocks at one facility and further process them into renewable fuels at another facility. EPA intends this broad rule to increase the economics and efficiency of producing biofuels, particularly advanced and cellulosic biofuels, a goal Brazil’s sugarcane biofuel producers broadly support.

The U.S. Environmental Protection Agency (EPA) has accepted comments on a proposal that would allow, among other things, biofuel producers to partially process renewable feedstocks at one facility and further process them into renewable fuels at another facility. EPA intends this broad rule to increase the economics and efficiency of producing biofuels, particularly advanced and cellulosic biofuels, a goal Brazil’s sugarcane biofuel producers broadly support. 

However, we are seriously concerned the proposal as currently written would upend nearly a decade of established practice and effectively prevent Americans from importing and using Brazilian sugarcane ethanol, one of the cleanest and most available advanced biofuels on the market, by changing how “biointermediates” are treated.

Since the beginning of the Renewable Fuel Standards (RFS) program, sugarcane ethanol has played a modest but important role supplying Americans with nearly 2 billion gallons of advanced biofuel. This important designation under the RFS indicates that a fuel reduces greenhouse gas emissions by at least 50 percent compared to fossil fuels.

The troubling concern with EPA's proposal is characterizing undenatured imported ethanol, like sugarcane ethanol from Brazil, as a biointermediate product. Denaturing is the addition of chemicals to ethanol to ensure the alcohol is both not suitable for human consumption and clearly “marked” for use in automobile fuel tanks in the United States. For many technical and regulatory reasons, nearly all sugarcane ethanol leaves Brazil in an undenatured state and the denaturing chemicals are then added in the United States to comply with regulations set by the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Treasury Department. To underscore, this approach has worked well for the past decade without any reported cases of fraud that have hampered other parts of the RFS program.

Categorizing undenatured imported ethanol as a biointermediate will impose significant and costly new obligations that may be infeasible and unfair for Brazilian sugarcane producers to meet. The unintended consequence may be blocking American access to this important source of advanced biofuel, and would treat foreign products differently from domestic biofuel supplies.

We also believe EPA’s definition of biointermediate does not fit undenatured sugarcane ethanol. The Brazilian ethanol producing process does not involve “sequential” production of pre-processing feedstock at one facility and transportation to another nearby facility for the ultimate conversion to renewable fuel. Rather, the product exported to the United States is a finished product, not a feedstock. It is a liquid fuel that can be used, without further processing, for transportation. 

Formal comments from Brazil’s sugarcane ethanol producers urge EPA to clarify that the biointermediate definition does not include undenatured sugarcane ethanol fuel that is subsequently imported into the United States and denatured.  This exception will not alter the status quo for foreign ethanol producers, but would allow EPA to provide the biointermediate provisions to the few US-based producers to which they should logically apply.

Decarbonizing transport in a post-fact world

By Géraldine Kutas posted Feb 02, 2017
At Politico’s recent debate on decarbonizing Europe’s transport,Maroš Šefčovič said that there is an international consensus that first-generation biofuels should be phased out. This is simply not true. Many countries including Australia, Brazil and the US are all producers of 1G biofuels and have no intention of phasing out these important CO2-reducing petrol alternatives.

2016 was the warmest year on record since the industrial revolution. At Politico’s recent debate on decarbonizing Europe’s transport, that was held in Brussels, DuPont’s Jan Koninckx recognised that the most immediate way to decarbonise transport is through cleaner fuels.  He correctly said that if implemented, the European Commission’s proposed reduction of first-generation biofuels from 7% to a cap of 3.8% would result in increased European dependency on oil.

Maroš Šefčovič said, last week, that there is an international consensus that first-generation biofuels should be phased out. This is simply not true. Countries such as Australia, Brazil, Canada, Colombia, India, Thailand and the US are all producers of first-generation biofuels and have no intention of phasing out these important CO2-reducing petrol alternatives. It is also important to note that none of these countries regard first- and second-generation biofuels as being in opposition with one another, as the European Commission seems to, but see them as complementary. This is exactly the spirit of the Biofuture Platform led by Brazil that was launched at COP22. The Biofuture Platform reflects the international consensus, and underscores the fact that the EU is, absurdly, the only major economy that is focused on phasing out first-generation biofuels.

This is precisely what Brazil’s Agriculture Minister emphasised during a recent roundtable discussion in Brussels. Brazil, Minister Maggi said, is committed to fighting climate change, and sugarcane ethanol is an important tool in its energy sustainability strategy. More than 40% of Brazil’s energy production comes from bioenergy and hydropower, and sugarcane is the number one source of renewable energy in the country. Minister Maggi advocated for the sustainability of first-generation biofuels, while welcoming the development of second-generation ethanol. He mentioned the Sugarcane Agro-Ecological Zoning, adopted in 2009, a law that prohibits the clearing of any type of native vegetation to plant sugarcane.

Vested interests in Europe are also pushing the falsehood that using first-generation biofuels means taking food from people’s mouths to run your car. This is a highly emotive accusation that has some European policymakers running scared. But while it makes a great headline, again, it is simply untrue. Swedish Minister for the Environment Karolina Skog said that she considered that differentiating conventional from advanced biofuels based on whether the feedstocks can be used to produce food is not an appropriate criterion, and does not make biofuels less or more sustainable. As Minister Maggi stated, there is absolutely no food-versus-fuel issue in Brazil in terms of the production of first-generation biofuels. Indeed, ethanol production accounts for only 1% of land use and Brazil is the world’s third largest agricultural product exporter.

Šefčovič has said that first-generation biofuels should be phased out, and has asked for innovation in the agriculture and chemical industries to deliver advanced biofuels. But the European Commission will not see the investments in second-generation biofuels it wants if policymakers do not also support traditional biofuels. You cannot kill the biofuels sector by eliminating first-generation biofuels and then expect it to rise miraculously phoenix-like from the ashes to deliver second-generation fuels.

If Europe is to achieve its ambitious targets and reduce its reliance on fossil fuels in transportation, the Commission should not pick winners. All the sustainable alternatives should be promoted and the proposed indiscriminate 3.8% cap on first-generation biofuels must be abandoned. 

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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