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.
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.”
In advance of the Senate Agriculture Committee hearing – entitled Advanced Biofuels: Creating Jobs and Lower Prices at the Pump – the Brazilian Sugarcane Industry Association (UNICA) released the following statement. It should be attributed to Leticia Phillips, UNICA’s representative in North America.
The United States and Brazil are the world’s top two ethanol exporters, and both nations enjoy the economic and environmental benefits of global biofuels trade. The U.S. Environmental Protection Agency identified Brazilian sugarcane ethanol as an advanced biofuel in 2010 after determining it reduces carbon dioxide emissions by at least 60% compared to gasoline. Thanks to those greenhouse gas savings, the benefits of using sugarcane ethanol are cleaner air and a healthier planet – benefits that will grow as Americans consume more advanced biofuels.
Sugarcane ethanol plays a modest but important role supplying the United States with clean renewable fuel. Last year, even though Brazilian sugarcane ethanol comprised only 3% of all renewable fuel consumed by Americans, it provided 15% of the U.S. supply of advanced biofuels. Experts expect those proportions to continue in 2014.
Brazilian sugarcane producers are making investments to expand production, and Americans can depend on more advanced biofuel from sugarcane. America imported nearly 435 million gallons of Brazilian sugarcane ethanol in 2013 – roughly half of all Brazilian biofuel exports last year. Brazil produces about 7.2 billion gallons of sugarcane ethanol annually, and UNICA estimates that at least 600 million gallons will be available for export to the U.S. this year, with the potential for growth.
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The Brazilian Sugarcane Industry Association (UNICA) is the leading trade association for the sugarcane industry in Brazil, representing 60 percent of the country’s sugarcane production and processing. UNICA works to encourage the continuous advancement of sustainable practices throughout the sugarcane industry and to promote sugarcane-based biofuels as a clean, reliable alternative to fossil fuels. For more information, including the latest updates on the Sugarcane Solutions Blog, check out www.sugarcane.org/RFS.
In response to proposed updates to the California Air Resources Board’s Low Carbon Fuel Standard, Leticia Phillips, North America Representative for the Brazilian Sugarcane Industry Association (known by the acronym “UNICA”), issued the following statement:
Washington, D.C., March 11, 2014 – Brazilian sugarcane producers applaud the California Air Resources Board (CARB) for once again declaring that sugarcane ethanol is one of the most environmentally friendly biofuels supplying today’s market.
Research unveiled today in CARB’s staff proposal to strengthen the State of California’s Low Carbon Fuel Standard (LCFS) provides new compelling evidence of the role sugarcane can play to lower greenhouse gas emissions and reduce petroleum use. This proposal moves California one step forward toward supporting a healthier, cleaner planet.
CARB’s proposal to revise indirect land-use change (ILUC) estimates in the LCFS shows the Brazilian sugarcane biofuel generates about half the indirect emissions that CARB originally suggested during its rulemaking process in 2009. If implemented, these revised ILUC estimates will confirm what numerous other studies have shown: sugarcane ethanol is one of the most environmentally friendly biofuels supplying today’s market.
UNICA welcomes CARB’s proposal to revisit its original estimates by putting science first. We look forward to providing detailed comments to this CARB proposal, as we have done in past.
California has always been a pioneer in clean energy policy, and today’s proposals reaffirms the state’s leadership role in establishing a cleaner, more sustainable world.
Previous comments submitted by UNICA to CARB proposals:
Brazil’s sugarcane ethanol producers submitted formal comments to the EPA Tuesday that expressed the industry’s serious concerns about the agency's proposed standards for the 2014 Renewable Fuel Standard (RFS). UNICA's (The Brazilian Sugarcane Industry Association) comments encourage the EPA to revise the proposed extreme and unjustified reductions in statutorily-specified volume requirements for advanced biofuels. The comments urge the EPA to amend the proposal to set volume targets that are in line with Congress’ and the Administration’s twin goals of replacing fossil fuels with advanced biofuels and other renewable fuels, and reducing greenhouse gas (GHG) emissions from transportation fuels.
You can read UNICA's full comments here.
The Environmental Protection Agency shocked the biofuels community in November by proposing to slash consumption requirements for advanced biofuels in the Renewable Fuel Standard (RFS). Even though advanced biofuel producers easily exceeded EPA’s 2013 target of 2.75 billion gallons, and in fact delivered nearly 3 billion ethanol-equivalent gallons of advanced renewable fuel last year, EPA suggests setting the 2014 requirement at 2.2 billion gallons – a 20 percent cut. EPA is currently accepting public comments on their proposal. Next week, Brazil’s sugarcane ethanol producers – under the auspices of UNICA, our trade association – will submit formal comments expressing the industry’s profound concerns about EPA’s unnecessary and unjustified proposed reductions in statutorily-specified volume requirements for advanced biofuels. UNICA’s well-founded comments (more than 80 footnotes and growing!) will urge EPA instead to set volume targets that are in line with Congress’ and the Administration’s twin goals of replacing fossil fuels with advanced biofuels and other renewable fuels, and reducing greenhouse gas (GHG) emissions from transportation fuels.
Here’s a preview of a few key points we plan to stress with environmental regulators.
Our Principal Concerns
First, UNICA believes implementing the proposal would mark a significant step backward from recent progress toward increased use of efficient, renewable biofuels with low lifecycle GHG emissions. Insofar as the proposal prioritizes more carbon intensive fuels over cleaner, more efficient advanced biofuels like sugarcane ethanol, it is contrary to the purposes of the Clean Air Act and to the President’s Climate Action Plan. Second, UNICA believes that all or a significant portion of the proposed reductions for advanced biofuels and total renewable fuels are beyond the scope of EPA’s authority under the Clean Air Act. Congress, as evidenced by the legislative history and reaffirmed by courts, intended the RFS to force technological change through increased production and mandatory use of biofuels.
A Dependable Partner
Brazilian sugarcane producers have made a long-term commitment to providing clean, renewable advanced biofuels to meet energy and environmental goals in Brazil and the United States, along with many other countries. We have invested billions in increasing production and infrastructure to meet the expected demand for clean renewable fuels. As a result, the Brazilian sugarcane industry has more than adequate capacity to help achieve the statutorily-mandated volumes of advanced biofuel. We continue to lead the way in showing that higher blends of ethanol (hint: we’ve been using E25 in Brazil for three decades!) are not only possible but also beneficial to the environment and economy.
Benefits of Advanced Biofuels
Multiple studies confirm that sugarcane ethanol is the most efficient and environmentally responsible advanced renewable fuel in widespread commercial use today, generating precisely the type of environmental benefits Congress sought to promote in carving out a preference for advanced biofuels in the RFS and that President Obama seeks to further in his Climate Action Plan. To be consistent with both Congressional intent and Administration policy, EPA should avoid taking steps—such as those in this proposed rule—that prioritize other, less GHG-efficient fuels over more GHG-efficient advanced biofuels like sugarcane ethanol.
EPA Cannot Ignore Sugarcane Ethanol
Congress did not in any way distinguish between ethanol and non-ethanol biofuels when it created the advanced biofuel category in the RFS. The statute treats both equally and indistinguishably as the same thing – advanced biofuels. EPA has previously determined that sugarcane ethanol is an advanced biofuel because of its low lifecycle GHG emissions, a conclusion it reaffirmed most recently in its 2013 RFS final rule. There is no basis in the statute for discounting, excluding, or otherwise ignoring sugarcane ethanol volumes or other ethanol advanced biofuel volumes in calculating the advanced biofuel required volumes for 2014, as EPA has proposed to do. When Congress specified volumes for the subcategories of advanced biofuels (like cellulosic biofuels and biomass-based diesel) but not others, it deprived EPA of discretion to create and either favor or discriminate against other subcategories. EPA must consider and include the available volumes of ethanol advanced biofuels when calculating the total required volume of advanced biofuels to be used in 2014.
Insufficient Authority under the Clean Air Act
To justify its proposed reduction of the total renewable fuel volume from 18.15 billion gallons to just 15.21 billion gallons, EPA cites two statutory provisions in the Clean Air Act: (1) the cellulosic waiver authority and (2) the general waiver authority. While no one contests the necessary reduction of cellulosic biofuels obligations to reflect lower-than-anticipated production of such biofuels, EPA grossly exaggerates this authority – and engages in regulatory gymnastics – in proposing a much larger than allowed reduction in the RFS. First, the “cellulosic waiver provision” cannot support the reduction because EPA’s authority under that provision is limited to reducing the required volumes of advanced biofuel and total renewable fuel by, at most, an amount equivalent to the projected production shortfall for cellulosic biofuel. For 2014, EPA projects a cellulosic biofuel shortfall of roughly 1.73 billion gallons, yet it proposes to cut required total renewable fuel volumes by 2.94 billion gallons—1.21 billion gallons more than the cellulosic biofuel waiver authority authorizes under any circumstance. Second, the “general waiver provision” cannot support the reduction because EPA has not even attempted to show that severe economic or environmental harm, at least one of which EPA must show to justify a cut, would result if the statutorily-mandated volumes were required. Adding insult to injury, EPA proposes a reading of “inadequate domestic supply” that stands Adam Smith on his head and defines inadequate supply to mean inadequate demand. What’s next? Changing the rules of soccer so red cards now count as goals? Let’s get real: Congress meant for the RFS to be technology-forcing. Otherwise they would have called it Renewable Fuels Suggestion.
The Bottom Line
The proposed rule will inevitably have two effects. First, it will reduce investment in, and production of, advanced biofuels at a critical time, as investors and producers reevaluate EPA’s commitment to the standards and goals Congress clearly set out in the RFS program. Second, by reducing incentives to produce and supply advanced biofuels, the proposed rule will increase the use of less-eco-friendly fuels, increasing GHG emissions and exacerbating the very environmental harms the law was meant to correct.
As environmental regulators consider the future of the RFS, we hope they’ll hear the chorus of voices from across the biofuels community urging common sense for America’s renewable fuel policy and urging EPA to ensure that a continued supply of reliable and renewable sugarcane ethanol keeps flowing into U.S. vehicles. If you agree with us, make sure that EPA regulators hear your concerns.
The debate over America’s Renewable Fuels Standard (RFS), and the role that advanced biofuels like sugarcane ethanol play in meeting our clean energy goals, has largely focused on what the Environmental Protection Agency’s (EPA) appropriate volume targets should be moving forward.
But centering the debate on volume targets for all biofuels has let two key benefits of advanced biofuels slip out of focus: the potential for non-corn ethanol to drastically cut lifecycle emissions compared to gasoline, and the ability of biofuel feedstocks to be sustainably grown without harming the environment.
Land-Use Advantages Compared To Corn
Let’s start with emissions reductions, arguably the most important imperative to fighting climate change. EPA certified sugarcane ethanol as an advanced biofuel that cuts emissions 61% compared to gasoline after a careful lifecycle analysis of the entire production-to-consumption process in 2010.
Examining the “well-to-wheels” impact of this clean fuel shows sugarcane ethanol cut emissions from American drivers 2.2 million tons in 2012, equal to growing 57 million trees for 10 years. By itself, that’s impressive data, but the full sustainability sum is revealed when land-use benefits are included in the equation.
Sugarcane fields store roughly 60 tons of carbon per hectacre, including above and below ground and soil organic carbon. That is a significant amount of carbon sequestration potential, but it’s made even more impressive because unlike corn, sugarcane only needs to be replanted every six years. This reduces land tilling, cutting the amount of carbon released from the soil.
In turn, each hectacre of sugarcane produces around 7,000 liters (1,850 gallons) of ethanol, roughly twice the ethanol yield of corn. This means more energy is created on less land with less fuel burned to harvest the crops.
One step further along the production process, self-sufficient sugarcane mills in Brazil use leftover stalks and leaves (called “bagasse”) to power operations instead of fossil fuels, often producing enough power to sell clean electricity back to the grid. In 2010 alone, bioelectricity from these mills powered the homes of 20 million people.
Increasing Production Without Increasing Environmental Impacts
And it gets better. Brazil’s sugarcane ethanol production can continue to grow while still protecting its native ecosystems and rainforests. A recent analysis by the international think tank Climate Policy Initiative concluded “there is room to increase Brazilian agricultural production via productivity gains, at no apparent cost to environmental conservation.”
These key sustainability facts are important to keep in mind when considering Brazil as a reliable partner for supplying Americans with advanced biofuels. Indeed, Brazil has the potential to replace 14% of global transportation fuel demand without altering current sugar production.
Brazilian sugarcane ethanol plays a modest but important role supplying America with clean renewable fuel, but it also plays an equally important role in creating a healthier and cleaner planet. By 2050, global energy needs could double, potentially increasing emissions 80% – unless we continue to pursue low-carbon and environmentally sustainable fuel options.
As Congress and the EPA deliberate over the future of the RFS, we hope they’ll consider the entire sustainability story of this advanced biofuel in their decision and set volume targets that continue to encourage the production and consumption of all available biofuels.
‘Tis the season for family, friends and holiday wishes. December is also a nice time to reflect back and think ahead to the New Year.
In 2013, advanced biofuels continued to flourish, and Brazilian sugarcane producers stayed active in sharing vital facts about clean, advanced renewable fuels like sugarcane ethanol. Here in the United States, the federal Renewable Fuel Standard (RFS) remained the primary focus of debate. We submitted comments in April to the Environmental Protection Agency on their proposed 2013 RFS requirements and delivered a white paper in May to the House Committee on Energy and Commerce to illustrate the ways sugarcane ethanol is helping America meet its RFS goals. More recently, we sounded the alarm on the damage EPA’s 2014 RFS proposal will cause to the emerging advanced biofuels industry.
Heading into the New Year, it’s clear the decisions confronting lawmakers and EPA regulators on the RFS will have a great impact on our world’s journey towards decreasing greenhouse gases and improving energy security. So in the spirit of the season, here’s our wish list naming the top three presents we’d either like to see under the tree or delivered in 2014.
- EPA reconsiders the agency’s current proposal and sets renewable fuel standards that encourage production and consumption of all available advanced biofuels. Slashing 2014’s target for advanced biofuels is a leap backwards on the path to reach the Obama Administration’s energy and environmental goals. Advanced biofuels, including Brazilian sugarcane ethanol, reduce carbon dioxide emissions by over 50 percent compared to gasoline and are a proven solution for addressing climate change. We hope EPA won’t finalize a proposal that ignores the 650-800 million gallons of sugarcane ethanol that are available to supply the United States with more advanced biofuel in 2014.
- No unnecessary, burdensome requirements on foreign biofuel producers. Under a separate EPA proposal, sugarcane producers would be subject to a host of onerous new requirements when exporting to America. Requirements like physically segregating exported ethanol from the production plant all the way to port arrival in the U.S. and spending considerable amounts on third-party auditors would cost roughly $1 million for every 5 million gallons exported by our estimates. EPA’s intentions are laudable, and we support the agency’s goal of ensuring the regulatory system that tracks U.S. biofuel consumption is accurate. But as currently written we are concerned the regulatory process is being used to impose burdensome, anti-competitive requirements on foreign biofuels.
- Global free trade in biofuels continues to flourish. In 2013, the U.S. domestic market for biofuels grew rapidly. EPA originally projected that the U.S. would need to import around 660 million gallons of Brazilian sugarcane ethanol to meet the 2013 advanced biofuel standard. However, total sugarcane ethanol imports will end in 2013 at around 450-500 million gallons. The reduction in imports is because American production of advanced biofuels is expanding quicker than the EPA forecasted – NOT because Brazil has exhausted its capacity for exports. As I’ve said all along, Brazil and the U.S. have a responsibility to work together to build a global biofuels market that provides clean, affordable and sustainable solutions to the planet's growing energy needs. We’re making progress that should continue in 2014.
Brazilian sugarcane producers look forward to continuing to play an active role in the RFS rulemaking process and tackling the challenges that lay before us in the next year. Happy Holidays and best wishes for a happy, healthy and prosperous New Year!
The U.S. Senate is holding an oversight hearing today examining the Renewable Fuel Standard. The head of the American Fuel and Petrochemical Manufacturers (AFPM) is scheduled to testify before the Environment and Public Works Committee, and according to prepared remarks, will make an exaggerated claim that deserves further scrutiny.
Among a litany of grievances and complaints, AFPM president Charles Drevna includes the following statement: “The prevalence of imports and failure of the RFS to develop domestic second and third generation biofuels ensures that RFS will continue to rely on imported ethanol to satisfy its advanced biofuel volumes. This situation belies the argument that the law is enhancing energy independence.” (Emphasis added)
Well, as the old saying goes, everyone is entitled to their own opinion, but only one set of facts. A little fact checking finds Mr. Drevna’s assertion deficient on three counts.
- First, a little context. The U.S. Environmental Protection Agency has designated Brazilian sugarcane ethanol as an advanced renewable fuel after determining it reduces greenhouse gas emissions by over 60% compared to gasoline. And advanced biofuels are a category of fuel that Congress hopes to grow significantly during the next decade.
However, the fact is imports are not prevalent. Instead, sugarcane ethanol plays a modest but important role supplying the United States with advanced renewable fuel. Last year, Brazilian sugarcane ethanol comprised only 3% of all renewable fuel consumed by Americans, but provided nearly one-quarter of the U.S. supply of advanced biofuels. The final numbers for 2013 are still coming in, but the proportions should go down a little this year with sugarcane ethanol providing less than 3% of all U.S. renewable fuel and less than 20% of advanced biofuels consumed by Americans.
- Far from a failure, the RFS is helping the domestic market for American biofuels to grow rapidly. For evidence, let’s look at EPA’s forecast for 2013. The agency originally projected that the U.S. would need to import around 660 million gallons of Brazilian sugarcane ethanol to meet the 2013 advanced biofuel standard. However, total sugarcane ethanol imports will end this year at only 450-500 million gallons – not because Brazil has exhausted its capacity for exports – but because American production of advanced biofuels is expanding quicker than EPA predicted.
- Finally, EPA’s proposed formula for setting the 2014 advanced biofuel standard ignores – rather than relies on – Brazilian sugarcane ethanol. It’s a change we oppose, and one we hope EPA will correct following the public comment period. But for now, EPA has proposed a methodology that excludes any available volumes of advanced ethanol from the formula that sets the 2014 RFS targets for advanced biofuels.
The current debate over the renewable fuels standard is an important one with far-reaching implications for America’s energy security and environmental goals. Many different opinions are involved, but Brazilian sugarcane producers hope we can all agree to stick to the facts.
The Environmental Protection Agency is hosting a public hearing on December 5 to hear from industry leaders on the agency’s proposed renewable fuel standards for 2014. I will be testifying on behalf of Brazilian sugarcane producers, and here’s an advance look at what I will say:
Good morning. My name is Leticia Phillips, and I am the North American Representative for the Brazilian Sugarcane Industry Association (UNICA). UNICA is the leading trade association for the sugarcane industry in Brazil, representing 60 percent of the country’s sugarcane production and processing.
Sugarcane ethanol production uses only 1.5 percent of Brazil’s arable land, reduces greenhouse gas emissions by 90 percent on average, compared to conventional gasoline, and helps move beyond fossil fuels.
For over six years, the Brazilian sugarcane industry has worked collaboratively with EPA and the U.S. renewable fuel industry. Since the beginning of the RFS program, EPA had been a strong supporter of the modest but important role Brazilian sugarcane ethanol plays supplying Americans with sustainable fuel.
In 2010, the agency certified that Brazilian sugarcane ethanol cuts carbon dioxide emissions by more than 60 percent and designated it as an advanced renewable fuel. Following congressional intent, EPA has encouraged advanced biofuels because they are the category of renewable fuel with the greatest greenhouse gas reductions. So it came as an extraordinary shock and is deeply concerning that EPA has proposed to drastically reduce the volumes of advanced fuels for the 2014 RFS.
Slashing next year’s target for advanced biofuels is a huge step backwards from the Obama administration’s goal of decreasing greenhouse gases and improving energy security. Advanced biofuels, including Brazilian sugarcane ethanol, reduce carbon dioxide emissions by over 50 percent compared to gasoline and are a proven solution for addressing climate change. Yet, EPA’s proposed formula for setting advanced biofuel targets blatantly ignores its own estimates that 650-800 million gallons of sugarcane ethanol can be supplied to the United States in 2014.
As my colleagues on this and other panels will testify, EPA’s proposal pulls the rug from under the advanced biofuels industry, not just Brazilian sugarcane producers. EPA is proposing to cut advanced biofuel volumes next year by more than 40 percent compared to the requirements written into the RFS statute. Ironically, EPA is proposing a less than 10 percent reduction to volume requirements for conventional biofuels, which include a number of grandfather facilities that may well not meet the minimum requirement of 20 percent reduction.
EPA should set renewable fuel standards that encourage production and consumption of all available advanced biofuels. Because the domestic market for American biofuels is growing rapidly. EPA originally projected that the U.S. would need to import around 660 million gallons of Brazilian sugarcane ethanol to meet the 2013 advanced biofuel standard. However, total sugarcane ethanol imports will end this year at only 450-500 million gallons – not because Brazil has exhausted its capacity for exports – but because American production of advanced biofuels is expanding quicker than EPA forecast.
Congress clearly intended to encourage greater use of advanced biofuels year over year, in order to achieve the largest GHG reductions possible. That’s why UNICA supports EPA’s Option 1, which would set the advanced biofuel volume requirements based on the availability of advanced biofuels plus carryover RINs.
We also encourage EPA to consider implementation of California’s low carbon fuel standard when setting the RFS targets. The Golden State considers Brazilian sugarcane biofuels the low-carbon fuel with the best performance today and the only fuel available at commercial scale to contribute to meeting its low-carbon fuel standard. Similarly, we urge the Administration to consider the repercussions for trade policy. Europe has already assessed dumping charges on some U.S. biofuels, and the last thing the global biofuels market needs is policy reversals that flood other countries with unwanted product.
Our association looks forward to commenting further on this proposal and will continue to play an active role in the RFS rulemaking process, serving as a source of credible information about the efficiency and sustainability of sugarcane ethanol. Likewise, Brazil will continue to be a strong, dependable partner helping America meet its clean energy goals. Thank you.