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Sugarcane Ethanol Producers Applaud EPA’s 2013 RFS Standards, Urge Reasonable Adjustments to 2014 Requirements

By Leticia Phillips posted Aug 06, 2013
Sugarcane ethanol producers applaud today’s EPA announcement on 2013 annual percentage standards for the RFS, which maintains the advanced biofuel volume at 2.75 billion gallons.

Sugarcane ethanol producers applaud the Environmental Protection Agency (EPA) announcement on 2013 annual percentage standards for the Renewable Fuels Standard (RFS), which maintained the advanced biofuel volume at 2.75 billion gallons.

We also support EPA extending the time for obligated parties to demonstrate compliance with 2013 standards to June 30, 2014 – a common sense approach that will allow ethanol producers to take anticipated 2014 RIN obligations into consideration as they determine 2013 compliance actions.

Sugarcane ethanol producers also look forward to working with the EPA to find the right requirements for 2014 and the years ahead. We urge regulators to support reasonable proposed adjustments as the EPA considers 2014 requirements – especially the cellulosic and advanced biofuels volumes.

Brazilian exports provided nearly one-quarter of the entire U.S. advanced biofuel supply in 2012, are projected to supply nearly 700 million gallons in 2013, and could supply up to one billion additional gallons in 2014 – all with at least 61% fewer emissions than gasoline, according to the EPA.

Sugarcane biofuels are an important component of a diversified strategy to meet America’s RFS targets, and Brazilian producers stand ready to help America meet its goals for low-emission transportation by keeping clean renewable advanced biofuels flowing into U.S. vehicles.

Calls For Common-Sense Advanced Biofuel Regulation Keep Coming In

By Leticia Phillips posted Jul 24, 2013
The latest comments come from both Shell and BP America, producers and importers of renewable fuel, and a joint letter by the American Fuel & Petrochemical Manufacturers (AFPM) and the American Petroleum Institute (API), two trade associations that represent many importers of renewable fuel in the United States.

As Congress continues holding hearings on the future of America’s Renewables Fuels Standard (RFS), calls keep coming in for common-sense regulation and oversight of foreign renewable fuel producers by the Environmental Protection Agency (EPA).

When combined with formal comments submitted by other notable biofuel proponents and stakeholders, the din is hard to ignore. A growing chorus is raising concerns about EPA’s unnecessary proposed requirements on foreign biofuel producers and sounding the alarm that these changes could raise domestic fuel prices and threaten U.S. supplies of sugarcane ethanol, one of the cleanest and most advanced biofuels available to American drivers.

The latest comments come from both Shell and BP America, producers and importers of renewable fuel, and a joint letter by the American Fuel & Petrochemical Manufacturers (AFPM) and the American Petroleum Institute (API), two trade associations that represent many importers of renewable fuel in the United States.

  1. New requirements are unnecessary – Shell, a global group of energy and petrochemical companies with more than 90,000 employees in more than 80 countries and territories, calls EPA’s proposal “overly complex, unworkable and unreasonably retroactive.”  The company also points out these changes are not necessary:
  2. “There is quite simply no basis to conclude that the additional requirements are necessary to ensure that the regulations can be enforced against these [foreign] parties. The current version of the rule puts the responsibility on the RIN generator to ensure that all of the regulations are met, including the provisions related to the definition of renewable biomass. We carefully adhere to the current rules and understand our obligation there under. The additional proposed requirements are simply unnecessary…

    “Each foreign producer, in our experience and per our internal requirements, has provided substantial land-use traceability documentation, and separated food waste and animal fat traceability documentation, of feedstock tied specifically to volume of each parcel processed into renewable fuel, in support of each cargo volume loaded for US import and RIN generation, so that we can be assured that RINs that we generate from such ethanol are valid.”

    Similarly the Independent Fuel Terminal Operators Association (IFTOA) wrote:

    “This proposal is an extreme measure that would place the importers of these foreign-produced renewable fuels at a significant competitive disadvantage and could effectively prevent the importation of such fuels – contrary to the overall objective of the RFS Program. [...] U.S. importers are already subject to U.S. jurisdiction, are fully registered with the EPA and are responsible to ensure the generation of valid RINs.  No additional safeguards are required.”

  3. Impractical segregation requirements will hinder supplies and increase costs Shell also predicted segregating sugarcane ethanol could halt U.S.-bound shipments for a full year: 
  4. “EPA’s proposal would require additional segregation of renewable fuels. This is problematic because insufficient renewable fuel tankage exists in foreign ports to segregate each foreign producer’s biodiesel or ethanol as gathered via trucks, rail, and barges, until an oceangoing cargo size volume is accumulated for export to US. The likely result of EPA’s proposal is that foreign renewable fuel producers, and the US importers of those renewable fuels, would be forced to suspend activity for approximately one year while additional tankage is constructed on foreign soil to accomplish the Agency’s desired degree of load port segregation.

    “In addition, even if additional tankage could be built in foreign ports, such a requirement would delay receipt of foreign renewable fuels needed to meet RFS mandate, and raise cost of foreign renewable fuels relative to domestic fuels, inflating cost of all US renewable fuels.”

     BP America echoed Shells concerns, highlighting “serious logistical barriers” to segregate ethanol in the proposed rule:

    “BP strongly opposes this proposed change to the RFS rules … This would likely result in decreasing the amount of biofuel available and reducing the pool of advanced and cellulosic ethanol volumes available for compliance with the RFS program. Keeping each Mill’s product segregated to vessel and then on vessel is overly burdensome and costly. Segregation will be very difficult given logistics constraints in foreign countries.”

  5. Assessing retroactive financial penalties is unreasonable – AFPM and API echoed Shell’s concerns.  The trade associations also weighed in on EPA’s proposal to retroactively require compliance with new regulatory requirements on all fuel produced and exported as of January 1, 2013: 
  6. “We are hopeful that this is simply a printing error and that EPA will correct this before finalizing the rule. It is not reasonable for EPA to impose such requirements retroactively. It is simply impossible for EPA to enforce a regulation looking back on actions foreign renewable fuel producers and RIN generators should have taken throughout 2013, when at the time of production, transportation, import and RIN generation, those foreign renewable fuel producers and RIN generators had no knowledge of any proposed rule change.”

  7. Stifling impact on new technologies. The Biotechnology Industry Organization (BIO), shared our concerns that while EPA’s aim is laudable the unintended consequences of the proposed rule could have a chilling effect on development of new biofuel technologies: 
  8. “We would encourage the [EPA] to ensure its enforcement of the rule does not inadvertently discourage legitimate feedstocks and fuels developed by producers who are already complying with section 80.1466 from being able to import to the U.S. Doing so may unintentionally impact domestic producers who use these feedstocks or fuels from developing domestic gallons of advanced or cellulosic biofuels.

In fact, a small ethanol producer in Canada, Growing Power Hairy Hill, noted this impact saying the proposed rule’s costs are:

“... prohibitive to small plants such as ours. The proposed bond multiplier for Advanced RINs of $0.8/gallon is simply too high. Such requirement can, in our opinion, only result in the further escalation of the Advanced RIN values and hence increase the cost of ethanol and resulting gasoline for US consumers.”

EPA’s quest to ensure regulatory accuracy of U.S. biofuel consumption is noble, but ultimately quixotic. If the proposed rulemaking were finalized without the sensible changes suggested by these formal comments, the cost of producing sugarcane ethanol and the price of pumping it into American vehicles would both rise, with no apparent benefits.

Congress has already heard EPA say it won’t be able to meet the RFS mandate for advanced biofuels without Brazilian sugarcane ethanol – so why would the agency want to test its own theory? 

Sugarcane Ethanol Producers Aren't Alone Opposing Unnecessary EPA Policy Change

By Leticia Phillips posted Jul 22, 2013
Last week we weighed in with formal comments opposing a proposed rulemaking by the Environmental Protection Agency (EPA). Many important economic and environmental causes for concern were echoed in other formal comments submitted to EPA by biofuel proponents and stakeholders.

Sugarcane Ethanol Producers Aren’t Alone Opposing Unnecessary EPA Policy Change

Last week we weighed in with formal comments opposing a proposed rulemaking by the Environmental Protection Agency (EPA) that could effectively end U.S. imports of Brazilian sugarcane ethanol, a clean renewable fuel key to meeting the Renewable Fuels Standard (RFS).

But this week, debate on the future of biofuels in America will reach a new level when Congress considers the issue. The House Energy and Commerce’s Energy and Power Subcommittee will hold hearings on potential RFS changes tomorrow and Wednesday, with testimony from industry groups and environmental organizations.

Our position is clear – language in EPA’s proposed rulemaking is unnecessary and threatens American access to one of the few advanced biofuels on the market today that reduces greenhouse gases by more than 60 percent compared to gasoline.

But don’t take our word for it. Many important economic and environmental causes for concern were echoed in other formal comments submitted to EPA by biofuel proponents and stakeholders. We’ve parsed these filings and highlighted a few below to reveal exactly what’s at stake.

  1. Expensive changes for both producers and consumers – Adecoagro, one of South America’s leading renewable energy companies and a foreign producer of undenatured sugarcane ethanol who has exported to the U.S. since 2011, said EPA’s proposed rules would boost costs for advanced biofuel producers and consumers:
  2. “All exported ethanol from Brazil to U.S. will have to be segregated by producer…meaning increased costs and operational difficulties. According to ship operators, one ship is loaded with product coming from five different producers on average. In our case, we will not be able to mix product produced by our two registered mills, even being under the same company. To make the transport economically and operationally feasible, either will (sic) be excluded from business or there will be need for smaller cargos or incurrence of losses in dead freight, both of which will increase costs and prices for sugarcane ethanol…consequently increasing prices for final consumers in the U.S.

  3. Redundant requirements could price out supplies with no benefit – Chevron, a major refiner and marketer of petroleum products in the U.S., and an obligated party under the RFS, reported redundant bureaucratic reporting would hike ethanol prices with no net benefits:
  4. “Chevron does not agree with EPA’s proposal to require both foreign ethanol producers and importers to meet the requirements…we believe this blurs the line that had previously been established between foreign producers who generate RINs and domestic producers and importers who already have compliance requirements under the program.”

    “Requiring foreign ethanol producers and importers to meet the requirements…will result in duplicate reporting of the same information by both parties. This will increase the cost of supplying ethanol from foreign locations and will complicate enforcement by having multiple sets of records for the same transactions.”

    “The requirement to segregate shipments of ethanol from the foreign producers will also increase the cost of supply and may not be possible in certain circumstances… The net effect of this proposal will increase the cost of supply of renewable fuels under the RFS. Under certain circumstance, it may also reduce the supply of renewable fuels from overseas providers.”

  5. Unnecessary Oversight Could Harm Future Biofuel Supplies – the Advanced Biofuel Association, representing over 40 member companies who produce advanced biofuels and biofuels feedstocks, mentioned EPA’s unnecessary regulations could limit the future of biofuel supplies in the U.S.:

  6. “The proposed amendment…would significantly impact not just advanced ethanol producers (mainly in Brazil, where no denaturant is added to sugarcane ethanol) but also other cellulosic biofuel producers currently building plants around the world. By requiring complete segregation of the biofuel until it reaches the port of entry, the proposed amendments unnecessarily increase compliance costs particularly for ethanol. While the goal of reducing potential RIN fraud is laudable, we are unaware of any alleged fraud related to RINs associated with imported advanced biofuels.”

    “In addition, and of greater concern to the nascent advanced biofuel industry, the required bonds are unreasonably and prohibitively high... Such expenditures would most likely make the export of advanced biofuels to the United States infeasible from a commercial standpoint, particularly for startup companies.”

    “Based on our analysis of the negative impact to advanced biofuels trade, the ABFA recommends that EPA withdraw these proposed provisions from the final rule in order to consult with industry on a better approach to ensure the robustness of the RFS is maintained without increasing cost and emissions.  We are also greatly concerned about the trade implications of these provisions as well as the ramifications with our relationship which we have been fostering over the last 5 years in the area of biofuels with Brazil.”

As Congress and EPA 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 ensure a continued supply of reliable and renewable sugarcane ethanol flowing into U.S. vehicles.

Our Comments to EPA Opposing Unnecessary Change to U.S. Biofuels Policy

By Leticia Phillips posted Jul 16, 2013
Yesterday, sugarcane ethanol producers submitted formal comments to the Environmental Protection Agency (EPA) opposing a proposed rulemaking that could effectively end U.S. exports of clean renewable fuel.

Yesterday, sugarcane ethanol producers submitted formal comments to the Environmental Protection Agency (EPA) opposing a proposed rulemaking that could effectively end U.S. exports of clean renewable fuel.

Under the Renewable Fuels Standard (RFS), Brazilian sugarcane ethanol exports have become an important part of America’s advanced biofuels supply, providing 23% of the entire U.S. supply in 2012, nearly 700 million gallons in 2013, and up to one billion additional gallons in 2014.

Biofuels thrive on the global market, and more than half of Brazil’s sugarcane ethanol exports currently head to the U.S. – a formula for RFS success. But EPA’s proposal would cause several problems that could increase greenhouse gas emissions, spike the cost of this low-carbon biofuel by 20 cents per gallon, and drive future exports into other international markets.

We’re hopeful EPA will agree with us that increasing biofuel costs and associated transport emissions isn’t the right way to implement the RFS, and keep our reliable supply of clean and renewable sugarcane ethanol following into U.S. vehicles.

Our concerns were previewed yesterday, but we’re including a few highlights from the formally submitted comments below. If you agree with us that Brazilian sugarcane ethanol is an important part of America’s clean transportation future, make sure the EPA hears from you.

Brazilian sugarcane ethanol imports are critical to RFS targets:

Nearly all of the 1.5 billion gallons of fuel ethanol imported by the U.S. since EISA was passed have been from Brazilian sugarcane. This support continues today, as EPA has projected that 666 million gallons of Brazilian sugarcane ethanol will be required to achieve the EISA’s advanced biofuels requirement for 2013. The United States’ demand for Brazilian sugarcane ethanol will only increase in coming years, given the aggressive increases in the advanced biofuels mandate that Congress included in the EISA. In fact, even after taking Brazilian sugarcane ethanol imports into account, EPA has already expressed concern that producers may be unable to produce the additional 1 billion gallons of advanced biofuel needed to [meet] the 2014 requirement. Thus, as EPA has recognized, it cannot meet Congress’ aggressive goals for renewable fuel consumption without the continued assistance of Brazilian sugarcane renewable fuels producers.

EPA’s proposal would create cost-prohibitive requirements:

Applying this new bonding requirement to Brazilian sugarcane mills will add a substantial new cost that many mills may not be able to bear. For example a mill which exports 5 million gallons of sugarcane ethanol per year to the United States would be required to post a $1 million bond, or twenty cents per gallon. Put another way, based on EPA’s projections for Brazilian sugarcane ethanol imports for 2013, the industry would have to post a collective bond of $133 million. While some associate the Brazilian sugarcane industry with large integrated companies, much of the ethanol sent to the United States comes from small, independent producers. These bonding requirements will have the effect of pricing the small, independent producers out of the export market and will also create a significant barrier to entry for new mills.

EPA’s proposal would increase associated greenhouse gas emissions:

All batches [of] Brazilian sugarcane ethanol would effectively have to be shipped separately from hundreds of different mills to the port of entry to the United States if they originate from separate facilities, fundamentally disrupting the actual production of ethanol from the actual infrastructure in Brazil for transporting ethanol. The logistical demands associated with such detailed fuel segregation cannot be overstated and, as a practical matter, may render the export of Brazilian sugarcane ethanol infeasible.

Requiring the complete segregation of each batch of Brazilian sugarcane ethanol destined for export to the United States will require the exclusive use of trucks to transport the ethanol from the mill directly to the port of exit, in either Santos or Paranagua, because other transportation options all involve the commingling of ethanol from different facilities. While transportation by truck is not uncommon today, it is not often a straight shipment from the mill to the port of exit. For example, the use of transshipment storage tanks has been growing in recent years and offers a number of advantages as it increases the logistical efficiency of truck fleets in various regions. However this method as well the use of railcars typically involves the comingling of ethanol from different facilities and would, therefore, be rendered impracticable under the proposed amendments to 40 C.F.R. § 80.1466. Likewise, the shipment of ethanol to the ports by pipeline, which is scheduled to commence in the next 18 months, would effectively be barred, as pipeline shipments necessarily result in some commingling of fuels. In addition to the cost benefits that shipment by rail or pipeline can offer to ethanol producers, they produce fewer GHG emissions than transportation by truck. Thus, contrary to the overarching goal of the RFS2 program, applying 40 C.F.R. § 80.1466 to Brazilian sugarcane ethanol producers will have the perverse effect of increasing GHG emissions associated with Brazilian sugarcane ethanol and decreasing efficiencies. 

EPA ‘s regulatory oversight would be impossible to achieve: 

Despite the fact that EPA did not publish the proposed rule until June 14, 2013, it has inexplicably proposed to apply the rule retroactively by requiring all non-RIN generating foreign producers to demonstrate compliance by January 1, 2013 … If EPA were to finalize the rule with this compliance date in place, all Brazilian sugarcane ethanol producers would immediately be deemed out of compliance, jeopardizing future Brazilian sugarcane ethanol imports to the United States. Such an approach would impose new requirements on prior RINs generation and RINs transactions that have already taken place in 2013, calling into question the validity of the RINs generated from Brazilian sugarcane ethanol so far this year. Moreover, there can be no argument that Brazilian sugarcane ethanol producers had adequate notice of the changes, since the effective date predates the proposed rule by more than four months. As an example of the challenges that this compliance date would pose, Brazilian sugarcane ethanol producers would be required to immediately post a collective bond of $40 million or more, corresponding to the more than 200 million gallons of Brazilian sugarcane ethanol that have been imported to the United States so far this year.

Extending EPA regulations to foreign producers may conflict with WTO policy:

Three provisions would be vulnerable to challenge under WTO rules: (i) the requirement that foreign producers be subject to RIN certification, which is currently impossible for Brazilian producers to comply with, as RIN certification applies to ethanol that is denatured after the ethanol has left the Brazilian producers’ control; (ii) the requirement to retire RINs to account for evaporative losses of ethanol for which RINs were never generated in the first instance, and which, as a practical matter, will provide Brazilian producers with fewer RINs than for equivalent fuel from domestic producers; and (iii) the requirement to post a bond (and thus incur financial costs), which will be imposed on Brazilian producers but will not [be] required of domestic producers. These proposed amendments, if adopted and applied, would discriminate against Brazilian ethanol, be more restrictive of the ethanol trade than is necessary, and act as quantitative restrictions against Brazilian ethanol. It would be difficult for the United States to defend these provision based on environmental objectives, as these provisions would apply to arbitrarily Brazilian ethanol imports, despite the environmental benefits that accrue from using Brazilian ethanol instead of non-renewable fuels.

Regulatory Oversight Threatens Sugarcane Ethanol Supplies to U.S.

By Leticia Phillips posted Jul 15, 2013
Brazilian sugarcane ethanol has become an important component of America’s advanced biofuels supply. But language tucked away in a proposed Environmental Protection Agency (EPA) rulemaking could effectively end U.S. access to this clean renewable fuel.

Brazilian sugarcane ethanol has become an important component of America’s advanced biofuels supply. But language tucked away in a proposed Environmental Protection Agency (EPA) rulemaking could effectively end U.S. access to this clean renewable fuel.

Sugarcane ethanol producers are concerned the regulatory process is being used to impose onerous, anti-competitive requirements on foreign ethanol. So today, we submitted comments on EPA’s proposed “Regulation of Fuels and Fuel Additives: RFS Pathways II and Technical Amendments to the RFS2 Standards.” Our comments highlighted what’s at stake for advanced biofuels in the U.S. and underline the threat posed to reducing greenhouse gas emissions from transportation. While official comments close today – despite our request for an extension – EPA still wants to hear from you

First, a little background. Under the Renewable Fuel Standard (RFS), sugarcane ethanol has become an important part of meeting America’s desire to use more advanced biofuels. Brazilian exports provided nearly one-quarter of the entire U.S. advanced biofuel supply in 2012, are projected to supply nearly 700 million gallons of fuel required to meet 2013’s targets, and could supply up to one billion additional gallons in 2014 – all with at least 61% fewer emissions than gasoline, according to the EPA.

Economic and Environmental Causes for Concern

However, EPA’s proposal as currently written would cause three principal problems that could halt the steady supply of this clean fuel.  

  1. Cost-prohibitive requirements – If approved, every sugarcane ethanol producer exporting to America would be subject to a host of burdensome new requirements, like physically segregating the ethanol they export from the production plant all the way to port arrival in the U.S. and spending considerable sums on expensive third-party auditors and bonds. By our estimates, producers would have to post a compliance bond of roughly $1 million for every 5 million gallons exported to meet EPA’s proposed rules. In addition, every gallon of sugarcane ethanol would have to be segregated from the moment of production across each of Brazil’s 400 mills, and could no longer be combined for shipment to domestic or other international markets if even one drop was destined for America.

    These new requirements will drive up production costs to the point where sending this advanced biofuel to the U.S. may no longer make economic sense. Biofuels thrive on the global market, and since half of Brazil’s sugarcane ethanol exports already go to other countries, new costly mandates could force exports away from America.
     
  2. Increased emissions – Segregated supplies would also boost associated transportation emissions of shipping sugarcane ethanol. Producers could no longer use pipelines or bulk storage facilities, rail shipments would have to be separated for exports, and ocean vessels might have to be shipped at less than capacity. More ships and trains mean more emissions – a change that seems incongruent to President Obama’s climate goals.
     
  3. Impossible requirements – Perhaps most concerning, proposed rules would force all Brazilian sugarcane ethanol producers to demonstrate compliance by January 1, 2013 – a deadline that passed more than seven months ago! By our calculations, $40 million in bond payments would be retroactively due on the 200 million gallons of sugarcane ethanol imported into the U.S. so far this year.

An Unnecessary Change

EPA’s intentions are laudable, and we support the agency’s goal of ensuring the regulatory system that tracks U.S. biofuel consumption (known as Renewable Identification Numbers or RINs) is accurate. But the current system monitoring foreign producers isn’t broken.

Significant protections already guard against RIN concerns, and the Brazilian sugarcane industry worked proactively with EPA to ensure Brazilian producers maintain records to comply with reasonable expectations. Plus, there has never been an instance of RIN fraud linked to Brazil.

These proposed changes appear to be a solution in search of a problem that will have (what we trust are) unintended consequences – namely threatening American access to one of the few advanced biofuels on the market today. We hope EPA will take our comments into consideration, and keep our reliable supply of clean and renewable sugarcane ethanol flowing into U.S. vehicles.

Increasing the cost of low carbon sugarcane biofuels by 20 cents per gallon all the while increasing transport emissions doesn’t seem like the right way to implement the RFS. If you agree with us, make sure the EPA hears your concerns.

Our Comments So Far to Environmental Regulators and Legislators

By Leticia Phillips posted Jun 20, 2013
Sugarcane ethanol producers are stepping up our profile in the debate over the Renewable Fuel Standard (RFS). We’ve been active for a while sharing vital facts about clean, advanced biofuels like sugarcane ethanol and lending our expertise and support to policymakers currently exploring the issue. Here’s a quick update on our activities so far and future plans.

As I wrote a couple weeks ago in my last post, sugarcane ethanol producers are stepping up our profile in the debate over the Renewable Fuel Standard (RFS). We’ve been active for a while sharing vital facts about clean, advanced biofuels like sugarcane ethanol and lending our expertise and support to policymakers currently exploring the issue.  Here’s a quick update on our activities so far and future plans.

Where We’ve Been: On the Record

In April, the Brazilian Sugarcane Industry Association (UNICA) submitted comments to the Environmental Protection Agency in response to their proposed RFS requirements for 2013. Our letter touches on a number of key issues, but most importantly, addresses concerns that Brazil cannot supply enough sugarcane ethanol to meet America’s needs.  On the contrary, updated harvest and export capacity estimates confirm that Brazilian sugarcane ethanol producers can meet EPA’s projections for ethanol exports to the United States.  Our comments to EPA conclude:

UNICA is confident that Brazilian sugarcane ethanol producers will be able to meet—and if necessary surpass—EPA’s projections for Brazilian sugarcane ethanol exports to the United States. Further, we believe this updated information resolves any residual uncertainty regarding Brazilian sugarcane production and ethanol production and obviates any need to reduce the statutory volume requirement for advanced biofuels as a hedge against poor production in Brazil. (Page 12)

Congress is also getting into the act, with the House Committee on Energy and Commerce releasing a series of white papers seeking input on the renewable fuel standard.

We welcomed the opportunity to answer the committee’s questions and illustrate the ways sugarcane ethanol is helping America meet RFS goals – particularly improving energy security and reducing greenhouse gas emissions. Some of the highlights from last month’s letter to Congress:

The RFS – and sugarcane ethanol in particular – works to reduce greenhouse gas emissions (GHG). As demonstrated by EPA’s own lifecycle analysis, the GHG emissions reductions associated with Brazilian sugarcane ethanol exceed the emissions thresholds for all categories of advanced biofuels included in the RFS program. Sugarcane ethanol is the most efficient biofuel produced at a commercial scale and can reduce GHG emissions by over 60% when compared to a fossil fuel baseline. (Pages 1-2)

Sugarcane ethanol helps meet advanced biofuel mandates. The Environmental Protection Agency has conducted rulemakings each year that waive significant portions of the Energy Independence and Security Act of 2007 (EISA) cellulosic ethanol mandate.  As development of commercial-scale cellulosic biofuel facilities has been slow, that volume mandate has been met with other advanced biofuels that offer comparable GHG emission reduction benefits, such as Brazilian sugarcane ethanol.  As a result, the GHG emission reduction benefits anticipated by the EISA have been achieved, even if through different paths. (Page 5)

Brazil is dedicated to the current and future success of the RFS. Our members are committed to producing increasing quantities of Brazilian sugarcane ethanol to help ensure compliance with the RFS program’s advanced biofuel mandate in the future. Brazilian sugarcane producers  have made a long-term commitment to providing clean, renewable sugarcane ethanol to meet  energy and environmental goals in Brazil and globally as evidenced by the considerable investments by major global energy companies, such as Shell, BP, Total and Petrobras, in the sugarcane industry. (Page 2)

Where We’re Going

We’re proud of the role that sugarcane ethanol plays in helping the U.S. reduce greenhouse gases. And sugarcane ethanol producers are committed to providing clean, renewable fuel for Brazil, the U.S. and the world. As the debate heats up and congressional scrutiny intensifies this summer, we will continue to highlight the benefits and stress the importance of access to clean, advanced biofuels like sugarcane ethanol.

We’ll also be keeping a close eye on RFS rulemaking coming out of EPA later this year.  We’ve seen troubling signs that the regulatory process might be misused to impose onerous, anti-competitive requirements on foreign ethanol.  More to come.

A Renewed Voice in the Debate Over Renewable Fuels

By Leticia Phillips posted May 28, 2013
Sugarcane ethanol plays a modest but important role supplying the United States with clean renewable fuel. Last year, Brazilian sugarcane ethanol comprised only 3 percent of all renewable fuel consumed by Americans, but provided nearly one-quarter of the U.S. supply of advanced biofuels. These vital facts are getting lost in a debate that’s heating up in Washington, D.C., so sugarcane ethanol producers plan to step up our profile.

Sugarcane ethanol plays a modest but important role supplying the United States with clean renewable fuel. Last year, Brazilian sugarcane ethanol comprised only 3 percent of all renewable fuel consumed by Americans, but provided nearly one-quarter of the U.S. supply of advanced biofuels. Is that amount significant? It is if you care about cleaner air and a healthier planet! The 460 million gallons of sugarcane ethanol Americans used in 2012 cut CO2 emissions by the same amount as planting nearly 57 million trees and letting them grow for 10 years.

These vital facts are getting lost in a debate that's heating up in Washington, D.C. over renewable fuels. The key policy – known as the Renewable Fuel Standard – was enacted to improve U.S. energy security and reduce greenhouse gases. And the Renewable Fuel Standard (RFS) is clearly working as Congress intended when measured in terms of increasing American consumption of renewable fuel. It has grown production and use of biofuels in the U.S. from around 4 billion gallons in 2006 to 15 billion gallons last year. But critics and special interests are lining up to urge changes by both Congressional legislators and environmental regulators.

So sugarcane ethanol producers, along with our colleagues in the advanced biofuels industry, plan to step up our profile. We'll take a more active role setting the record straight on the importance and benefits of this advanced biofuel – starting with new information available at our dedicated website: Sugarcane.org/rfs. Here you'll find a brief summary of the issue and our position that Congress and environmental regulators should maintain American access to clean, advanced biofuels like sugarcane ethanol. We also answer many frequently asked questions. Topics like: What is sugarcane ethanol? Why would Americans want it? What are advanced biofuels and other biomaterials from sugarcane? And many more.

You'll also see more regular posts from me and other collaborators here on the Sugarcane Blog. So to kick things off, I'd like to reiterate some guiding principles (first articulated by my friend and colleague Joel Velasco) that will serve as ground rules for our blogging and participation in the RFS debate:

  1. Honesty. Americans' trust in government keeps getting lower. I think this decline is mostly because our policy discussions are no longer honest debates, but a litany of overheated talking points that all too often veer from the truth. So, on this blog, we commit to sticking to the truth and promise to admit if we come up short. Honesty is the best prescription to regain the public trust.
  2. Consistency. Cherry-picking may be a good strategy at an orchard, but not for public policy. Being consistent means practicing what we preach, demanding accountability and, yes, being fair and balanced.
  3. Sweet Humor. There's nothing wrong with mixing a little fun with work, and we'll try to do that on this blog as well. Like this: In Brazil, a common sugar industry saying is "drink the best, drive the rest." That's because the national drink in Brazil, the "caipirinha", is made with sugarcane alcohol, which, when it fills the tank of our cars, is called ethanol. We're eagerly awaiting the "booze vs. fuel" debate to heat up. Any takers?

So take a look around and check back whenever you want an update. You'll find that the United States and Brazil are the world's largest biofuels producers and exporters. Both countries recently removed trade barriers protecting their domestic ethanol industries and have taken initial steps towards greater energy cooperation. And I firmly believe that 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. That's the ultimate goal of the campaign we renew today.

Why do Americans pay more for sugar?

By Leticia Phillips posted May 15, 2013
Most Americans who start the day stirring a spoonful of sugar into their coffee would be surprised to learn they generally pay more for the sweetener than residents of other countries buying it on the global market. Major American commodities traders track two prices for sugar – a world price and a more expensive U.S. price. Why the difference?

Most Americans who start the day stirring a spoonful of sugar into their coffee would be surprised to learn they generally pay more for the sweetener than residents of other countries buying it on the global market.  Major American commodities traders track two prices for sugar – a world price and a more expensive U.S. price.

Why the difference? According to the Wall Street Journal, "U.S. prices tend to be higher than world prices because the U.S. restricts sugar imports as part of the [U.S. Department of Agriculture’s] price-support program” for sugar (subscription required).  One USDA economist recently estimated this price-support scheme could cost American taxpayers $80 million in 2013 on top of requiring U.S. consumers to pay artificially higher prices for raw sugar, candy and other confections.

Given these sour facts and movement in the U.S. Congress to reform the sugar program, I'm not surprised the American Sugar Alliance is trying to change the subject to defend its price supports. Last month, the group released a report arguing that Congress must maintain current U.S. sugar policy "to shield consumers from foreign market manipulation," particularly by Brazil which subsidizes sugar production according to the American Sugar Alliance.

The influential Cato Institute took a look at the group’s report and summarized its findings succinctly:

The sugar lobby for years have been complaining that we need the sugar program, which keeps prices high for producers by keeping imports strictly controlled, in order to enable “reliable” (i.e., managed) access to sugar. Now they think sugar is too available (i.e., cheap)? For sure, if I was a Brazilian taxpayer, I would baulk at the thought of subsidising (if that in fact is the situation) the sugar addictions of my richer neighbours to my north, but as a consumer? Muito obrigado! The sugar lobby’s talking points are getting ever more creative. But none of them are valid. 

I added emphasis on the last line above and was tempted to end my rebuttal there!  However, the Brazilian Sugarcane Industry Association felt obligated to set the record straight on this misleading report which overstates Brazilian support for domestic producers and turns a blind eye to comparable programs in the U.S.  You can download our point-by-point response here, and see for yourself how the American Sugar Alliance’s report reveals “the desperate need of the American sugar industry to keep the U.S. market closed and protected from competition.”

UNICA @Rio+20, be ready to commit!

By Géraldine Kutas posted Jun 19, 2012
The day we have all been waiting for has come. Over the last few months, governments have been working on a document that needs signatures of more than 130 international leaders coming to Rio from all over the world. Keeping in line with the level of ambition associated with the summit the paper is called “The Future We Want”. It is meant to commit its signatories to do their best to put the world on a more sustainable development path and ultimately a green economy.

The day we have all been waiting for has come.  

Over the last few months, governments have been working on a document that needs signatures of more than 130 international leaders coming to Rio from all over the world.

Keeping in line with the level of ambition associated with the summit the paper is called “The Future We Want”. It is meant to commit its signatories to do their best to put the world on a more sustainable development path and ultimately a green economy.

But just how much agreement governments reach should not be the only measure of success for Rio+20. At Rio, private sector and NGOs will be working in partnership across platforms to chart a path towards a more sustainable use of resources. Our commitment to each other is just as real and as binding. I’m excited that UNICA will be part of this historic moment, and we hope that what’ve learnt is a good blueprint for others.

I have previously talked on this blog about the future that UNICA wants and the urgency to take action and act responsibly.

In a world of rising energy demand, decreasing traditional energy supplies and a rapidly growing population, renewable energies are essential. And because the Brazilian experience shows that they can be an engine for economic growth there is even more good reason to hear us out. Times are tough for everyone, but if you can open up market opportunities, grow GDP and satisfy consumer demand for clean fuels, there is a solid business case. 

We’ve been preparing for Rio+20 for some time now because we see an opportunity, economic as much as environmental. We have also been actively telling our story,  and with great authority, through the "Dialogues for Sustainable Development", a UN platform for civil society participation in official discussions that has given an outstanding support to all our energy proposals. And for those of you here in Rio or those who’ll be following us from far, we plan to continue showing our commitment to a green economy and engaging with our stakeholders at a number of events this week:

On June 18th, UNICA talked about the potential of sustainable bio-energy at an event organised by the Global Bioenergy Partnership (GBEP).

On June 19th, UNICA will give a speech at the ICTSD Trade and Sustainable Development Symposium called “Enabling Climate Mitigation, Fostering Low-Carbon Growth”.

On June 20th, UNICA will take part in the World Green Summit.

On the 21st, we will venture into the Bioeconomy debate alongside Novozymes and Electrobras.

And we will round off our busy Rio schedule on June 22nd with a presentation on the opportunities and challenges for bioenergy in Brazil at a conference organised by the CNA.

Sound busy? It’s not all.

A few days ago, we unveiled our latest contribution to understanding the potential of Brazilian sugarcane. We have launched an interactive digital tool that tells the story of our industry, provides timely information about market developments, and gives an overview of prospects and future uses of sugarcane ethanol. And it’s good fun to use it.  You can also download the app on your mobile devices and connect to our facebook page.

As you all see, much of the action in Rio+20 will not just take place at the negotiating table. We invite you to follow the debate and take part in the conversation.

We hope that this conference will mark the beginning of the future we all want.  

The future we want

By Géraldine Kutas posted Apr 22, 2012
Today is Earth Day. And this year we have a number of reasons to celebrate it. Perhaps the most significant one is the chance to build the future we want. In June, the world will see Brazil hosting the largest forum ever in the history of the United Nations: Rio+20. The UN Conference on Sustainable Development represents a historic opportunity to define pathways to a more sustainable future. World leaders, along with thousands of participants from the private sector, NGOs and other groups, will come together to shape a more sustainable world where economic growth, poverty reduction, social equity and environmental protection go hand-in-hand.

Today is Earth Day.

And this year we have a number of reasons to celebrate it. Perhaps the most significant one is the chance to build the future we want.

In June, the world will see Brazil hosting the largest forum ever in the history of the United Nations: Rio+20. The UN Conference on Sustainable Development represents a historic opportunity to define pathways to a more sustainable future. World leaders, along with thousands of participants from the private sector, NGOs and other groups, will come together to shape a more sustainable world where economic growth, poverty reduction, social equity and environmental protection go hand-in-hand.

The fact is that by 2050, our planet will be a home to nine billion people. Nine billion people who will need to feed themselves and power their lives. In a world of rising energy demand, decreasing traditional fossil energy supplies and growing concerns about climate change, we all urgently need to act.

At Rio+20, the international community will seek ways to make theoretical solutions become reality. Many of those solutions already exist; the goal is to scale them up, share best practice. And here is where we at UNICA have something to say.

At a time when most countries around the world are searching for clean, commercially viable, renewable options, sugarcane has proved to be a successful alternative to reduce greenhouse gas emissions in Brazil while diversifying energy supplies and reducing our dependence on oil.

In the last decade alone, sugarcane has been the centrepiece of Brazil’s renewable energy expansion strategy, and this gives Brazil a leading role in the search for low-carbon solutions to climate change, while promoting economic growth.

All this is largely possible because of sugarcane’s unique versatility. Just look at sugarcane derived ethanol - it is an affordable transportation fuel that, compared to gasoline, reduces C02 emissions by an average of 90 percent, and diminishes local air pollution and harmful emissions. Brazil replaced almost half of its gasoline consumption with ethanol, using just 1.4% of its arable land.

Bioelectricity is another great asset. Clean electricity generated from the stalks and straw of sugarcane (bagasse) has a lower environmental impact than fossil fuel thermoelectric plants or large hydroelectric power stations.  

Sugarcane has the potential to help reshape the world energy markets, as high-tech innovation is unlocking many other uses of this plant that go beyond food, ethanol and bioelectricity, such as bioplastics, biohydrocarbons and biochemicals.

The Brazilian experience represents a successful example of what happens when private sector innovation and know-how and supportive policy go hand-in-hand. I am glad that industry will play a greater role at Rio+20, especially in helping demonstrate that many of the smart solutions we need to fight climate change already exist. We just need our governments to put in place incentive structures and enable the environment required for those solutions to grow in scale. Rio+20 gives Brazil the opportunity to lead by example - we hope that our unique journey can be a useful one for others.

The future we want is not just a mere ‘wish list’. The future we want is reflected every day through actions and decisions. We need energy to power our lives and our economies. But we no longer have to rely on fossil fuels - today we have a choice that allows us to tread lightly on the environment. On a day like today, I/we give our governments a vote of confidence and hope Rio+20 marks the difference between ‘what we say’ and ‘what we do’.

Shouldn’t every day be Earth Day?

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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

 

Sugarcane Solutions Blog

COP 23 – We are here!

• Visit UNICA’s booth at COP23, Bonn zone • Attend our discussion on how biofuels can fight climate change and promote sustainable development at the Brazilian Pavilion on 15 November at 14:00 CET with speakers from ApexBrasil, SE4ALL / Below 50, the World Bank, and UNICA.

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