Purdue University

Apr 4, 2022

WEST LAFAYETTE, Ind. — Capturing the interactions between biofuels and agricultural industries and their connections with other economic activities was key to a first-of-its kind study.

“This is the first comprehensive examination of market factors and policies on the expansion of biofuels production in the U.S. to examine the economic impact of these individual drivers separately,” said Farzad Taheripour,  the Purdue University agricultural economist who led the study. “We found that RFS played a critical role in reducing uncertainties in commodity markets, and its most significant impact was to help farmers use their resources more efficiently. With producing more corn and soybeans, over time the farmers were able to bring fallow land that had been unused back to production, and U.S. annual farm incomes increased by $8.3 billion between 2004 and 2011, with an extra additional annual income of $2.3 billion between 2011 and 2016.”

Over the past 15 years, production and consumption of biofuels have increased in the U.S. due to various factors including market forces and biofuel policies, he said. The Renewable Fuel Standard,  or RFS, policy requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels. Examples of renewable fuels include the biofuels ethanol, most often made in the U.S. from corn; and biodiesel, most often made from soybeans. The policy was established in 2005, and was expanded and extended by the Energy Independence and Security Act of 2007.

The economic study looked at both short- and long-term price impacts of policies and other market forces on the expansion of the biofuels industry and was able to identify the impact of each individual market driver. A paper  detailing the team’s work is available in the journal Frontiers in Energy Research.

“A hybrid of models is needed to accurately assess the situation – one model can’t capture it all,” said Taheripour, a research professor of agricultural economics and member of Purdue’s Center for Global Trade Analysis or GTAP. “An introduction of a new policy shocks the market, but only for the short term. In the long run, people adjust, things stabilize and the true impact can be seen. For example, we are experiencing a shock now in crude oil. People are reacting to the war in Ukraine and to uncertainty, but we don’t yet know how it will impact the market on a scale of years or decades.”

The team developed economic analyses using both partial and general equilibrium models, which are the best modeling frameworks for short- and long-term analysis, respectively, he said. Through this work the team was able to differentiate the economic impacts of the RFS from other drivers that helped biofuels production grow and to evaluate the short- and long-run price impacts of RFS, as well as the contributions of the policy to improvements in farm incomes and use of agricultural resources. 

A key model used by the team was Purdue’s GTAP-BIO computational general equilibrium model for land use analyses related to the environmental, agricultural, energy, trade, and biofuel policies and actions. The model separates oil crops, vegetable oils, and meals into several categories. In addition to the standard commodities and services, the model includes the production and consumption of biofuels - corn ethanol, sugarcane ethanol, and biodiesel - and their by-products of dried distiller grains, commonly referred to as DDGS, and meals.

“The model takes into account the use of commodity feed stocks for food and fuel, and the competition or trade-offs between those and other market uses,” Taheripour said. “It also traces land use and handles intensification in crop production due to technological progress, multicropping and conversion of unused cropland to crop production. This is the first biofuels study to be able to piece out all of these factors individually and to combine that information with short-term models to capture finer and shorter-term impacts.”

Taheripour collaborated with Harry Baumes, a member of the National Center for Food and Agriculture Policy in Washington, D.C., and Wallace E. Tyner,  the late James and Lois Ackerman Professor of Agricultural Economics at Purdue.

“When we analyze policy implications, we need to look comprehensively and have a broad perspective,” Taheripour said. “The goal of my research is to guide policy makers to the best and most informed decisions that are safe and benefit us all.”

Read the original story here. 

Senator Amy Klobuchar

Apr 5, 2022

WASHINGTON - U.S. Senators Amy Klobuchar (D-MN) and John Thune (R-SD) urged the Environmental Protection Agency (EPA) to update its greenhouse gas modeling for biofuels. Specifically, the senators requested the EPA adopt the Argonne National Lab’s Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model. These long-overdue updates would permit consistent comparison between petroleum-based fuels, natural gas systems, electric generation, and renewable fuels.

“We urge you to adopt Argonne National Lab’s Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) Model. Adopting the GREET Model will not only permit the federal government to further standardize its comparison of GHG emissions for biofuels like ethanol, biodiesel, and sustainable aviation fuel, but enable over 50,000 registered GREET users to more readily compare renewable fuels to other sources of energy,”the senators wrote to EPA Administrator Michael Regan. 

“We applaud EPA for reviewing and updating its GHG modeling resources in accordance with its obligations under the RFS to ensure that accurate and reliable data can remain central to policies concerning energy consumption and reducing emissions,”the senators continued.“We hope that EPA will use the GREET Model as its primary resource for determining lifecycle GHG emissions of biofuels, which could immediately contribute to ongoing efforts to reduce energy emissions.”

The letter was also signed by U.S. Sens. Sherrod Brown (D-OH), Dick Durbin (D-IL), Tammy Duckworth (D-IL), Joni Ernst (R-IA), Chuck Grassley (R-IA), Roger Marshall (R-KS), and Mike Rounds (R-SD).

Last February, Klobuchar and Thune introduced theAdopt GREET Act, bipartisan  legislation  that would require the EPA to update its greenhouse gas modeling for ethanol and biodiesel. Their bill would require the EPA to update its modeling every five years, or report to Congress to affirm its modeling is current, or otherwise explain why no updates were made.

Klobuchar has been a strong advocate for investing in renewable fuel infrastructure, increasing American biofuel production, and upholding the Clean Air Act’s Renewable Fuel Standard (RFS). She recently introduced  theHome Front Energy Independence Actwith Senator Joni Ernst (R-IA), bipartisan legislation to expand the availability and production of American biofuel, following President Biden’s ban on importing Russian oil.

In February, she and Senator Chuck Grassley (R-IA) led  a bipartisan letter urging the Environmental Protection Agency (EPA) to prioritize the Renewable Fuel Standard (RFS) by maintaining the blending requirements for 2022; denying all pending Small Refinery Exemptions (SREs); eliminating proposed retroactive cuts to the renewable volume obligations (RVOs); and setting 2021 RFS volumes at the statutory levels.

Klobuchar and Grassley also introduced  bipartisan legislation in December to provide certainty to biofuel producers by preventing the EPA from retroactively reducing RVO levels once finalized.

The full text of the letter is available HERE  and below:

Dear Administrator Regan:

We write in response to the decision by the Environmental Protection Agency (EPA) to review the scientific methodology and modeling used in the transportation sector pursuant to the Renewable Fuel Standard (RFS) to accurately ascertain the GHG emissions of land-based biofuels . In support of this effort and the need for stakeholders to have a consistent and well-vetted standard through which all biofuels may be compared, we urge you to adopt Argonne National Lab’s Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) Model. Adopting the GREET Model will not only permit the federal government to further standardize its comparison of GHG emissions for biofuels like ethanol, biodiesel, and sustainable aviation fuel, but enable over 50,000 registered GREET users to more readily compare renewable fuels to other sources of energy.

As presented during the March 1, 2022, EPA workshop, the GREET Model has provided annually updated lifecycle “well-to-wheels” analysis for an expanding universe of energy sources since 1995. Importantly, the GREET Model permits consistent comparison between petroleum-based fuels, natural gas systems, electric generation, and renewable fuels derived from a variety of technology pathways, accounting for the lifecycle carbon intensity of key farming inputs. We ask that EPA utilize the GREET Model as the baseline GHG determination for biofuels so that stakeholders may have the opportunity to readily compare the GHG intensity of competing energy sources and policymakers may have a fuller picture of how to decarbonize the energy and transportation sectors.

The GREET Model has been among the most widely utilized sources of GHG data, underpinning research that finds corn ethanol can currently achieve 46 percent lower lifecycle carbon intensity than gasoline. This environmental benefit will only increase as biorefining and fuel technologies improve, the agriculture sector advances operational efficiencies and produces higher yields of renewable feedstock per acre, and as biofuel operations are paired with carbon capture projects. Updated and consistent GHG modeling can provide a positive feedback loop that drives continued progress to lower carbon intensity at both the farm and fuel level. From “field-to-tailpipe,” the reduction of carbon intensity provided by biofuels deepens as consumers select higher blends of biofuels like E15, E30, E85, and B20 for their energy needs.

We applaud EPA for reviewing and updating its GHG modeling resources in accordance with its obligations under the RFS to ensure that accurate and reliable data can remain central to policies concerning energy consumption and reducing emissions. We hope that EPA will use the GREET Model as its primary resource for determining lifecycle GHG emissions of biofuels, which could immediately contribute to ongoing efforts to reduce energy emissions.

Thank you for the timely consideration of our request and your assistance to enable homegrown biofuels to serve as a solution to our nation’s growing energy challenges.

Read the original press release here. 

Congresswoman Angie Craig

Mar 31, 2022

WASHINGTON, D.C. — Today, U.S. Representative Angie Craig led the six bipartisan Co-chairs of the Congressional Biofuels Caucus and 23 additional Members of Congress in a letter to President Joe Biden urging him to prioritize homegrown, renewable biofuels as a replacement for Russian energy sources. The letter comes after Congress banned the importation of Russian oil earlier this month. In their letter, the Members applauded the decision to ban imports of Russian oil and natural gas into the United States and argued that a renewed emphasis on renewable fuels would lower fuel prices for American consumers by more than $12 billion annually, generate substantial economic growth in rural communities and significantly decrease American dependence on foreign oil producers like Russia. 

The letter asks the President to consider directing the Environmental Protection Agency (EPA) to allow the summer sales of E15 this year and to direct the EPA to reverse course on proposed retroactive reductions to 2020 and 2021 Renewable Volume Obligations. As of today – and barring any action by Congress or the President – the summer sales of E15 in Minnesota and other states will be prohibited beginning on June 1, 2022 due to a D.C. Circuit Court  decision  on the Clean Air Act in July of 2021. 

“To ensure that this ban – and future actions that the U.S. may need to take to defeat Russian aggression – is economically sustainable for the American economy and American people, we urge you to consider the following actions that would prioritize homegrown and renewable biofuels,” the Members wrote. “Taken together, these actions would significantly increase U.S. energy independence, lower prices at the pump and ensure the continued success of our sanctions on the Russian economy.”

Actions to increase U.S. energy independence in light of Russian aggression are overwhelmingly supported by the American public. A recent Morning Consult poll indicated that 72% of Americans support increasing the availability of E15 as a way to replace Russian oil imports, and 83% of Americans support increasing domestic renewable fuel production – which includes renewable biofuels like ethanol and biodiesel – in the U.S. as a strategy to lower fuel prices.

“We thank these House members for encouraging President Biden to embrace domestic renewable fuels as a lower-cost, lower-carbon alternative to Russian oil imports,” said Renewable Fuels Association President and CEO Geoff Cooper. “E15 is typically selling for 20-30 cents per gallon less than regular gasoline right now; and as revealed by a new nationwide survey, three out of four voters support increasing the availability of E15 as a strategy for reducing pump prices and providing relief to American families. If the Biden administration fails to act on the straightforward request made by these Representatives, the lowest-cost fuel available at the pump today will disappear on June 1 and drivers will face another unnecessary price hike.”

“The message on both sides of the aisle remains loud and clear: to immediately offer relief at the pump and move toward a more secure energy sector, the Biden Administration must increase access to homegrown, low-carbon biofuels,” said Growth Energy CEO Emily Skor. “As gas prices hit their peak, higher blends of biofuels like E15 were selling for more than 50 cents cheaper per gallon at the pump in some areas of the country. Increasing access to lower-cost biofuels, through year-round E15 and robust RVOs, would offer these savings to more drivers and reduce our country’s dependence on foreign oil.”

“ACE members are incredibly grateful for the leadership being demonstrated by Rep. Angie Craig to spearhead this bipartisan letter urging the President to act now to allow E15 year-round and get the Renewable Fuel Standard back on track,” said Brian Jennings, American Coalition for Ethanol (ACE) CEO.“Ensuring year-round access to domestically-produced E15 for all parts of the country is the quickest way to address pain at the pump and make the U.S. more energy secure.”

“Corn farmers appreciate the bipartisan leadership of the House Biofuels Caucus and the 29 House Members who joined this letter asking President Biden to prioritize renewable fuels, like ethanol, when it comes to lowering prices for drivers and increasing our domestic energy supply,” said National Corn Growers Association (NCGA) President Chris Edgington. “Throughout this month, E15 has been priced around 10 to 40 cents less per gallon than regular, or E10, making ethanol the low-cost and low-emission solution the country needs now. However, unless the Biden administration or Congress act soon, drivers will lose retail access to lower-cost E15 on June 1. We urge continued bipartisan cooperation to keep this money-saving choice available.”

“Over the last two years, the more than 65,000 U.S. workers in the biodiesel and renewable diesel industry worked hard to maintain fuel supplies and provide value to consumers,” said Kurt Kovarik, Vice President of Federal Affairs at Clean Fuels Alliance America.” Clean Fuels and its members thank the members of the Biofuels Caucus – and especially Representatives Angie Craig, Rodney Davis, Cindy Axne, Dusty Johnson, Mark Pocan, and Adrian Smith – for prioritizing homegrown, clean fuels to boost America’s energy independence.”

You can find the full text of the letter  here  and below.

March 31, 2022

The Honorable Joseph R. Biden, Jr.
President of the United States
The White House
1600 Pennsylvania Avenue, NW
Washington, D.C. 20500

Dear President Biden:

Russia’s unjustified and brutal attack on Ukrainian sovereignty and Ukrainian citizens demands the type of unified domestic and international response that the United States has led over the past month. Given the Russian economy’s reliance on petroleum exports, banning the importation of Russian oil and natural gas into the United States was the right decision. 

To ensure that this ban – and future actions that the U.S. may need to take to defeat Russian aggression – is economically sustainable for the American economy and American people, we urge you to consider the following actions that would prioritize homegrown and renewable biofuels. Taken together, these actions would significantly increase U.S. energy independence, lower prices at the pump and ensure the continued success of our sanctions on the Russian economy. 

1. Permanently reinstate the year-round availability of E15 by directing the Environmental Protection Agency (EPA) to use its authority pursuant to Section 211(c)(4)(C)(ii) of the Clean Air Act or by taking executive action to respond to a potential energy crisis triggered by Russian aggression on the international stage. 
2. Support ethanol and biodiesel by directing the EPA to reverse its course on the proposed retroactive reduction to 2020 and 2021 Renewable Volume Obligations (RVOs) and adhere to the Renewable Fuel Standard’s (RFS) statutory obligations. 

Upholding the RFS and permanently reinstating the year-round availability of E-15 would lower fuel prices for hardworking Americans. Ethanol, biodiesel, and renewable diesel add to the nation’s fuel supply, lowering prices at the pump for nearly every consumer good that moves along the supply chain. Over the last decade, wholesale ethanol has saved consumers 17% when compared to wholesale gasoline. A recent report indicated that a nationwide shift to E15 could collectively save U.S. consumers more than $12 billion annually. And according to a recent World Agricultural Economic and Environmental Services (WAEES) study, availability of biodiesel and renewable diesel has saved consumers an average of 31 cents per gallon at the pump over the last ten years.

These actions would generate economic growth in rural communities that would reduce the impact of inflation on Americans’ pocketbooks. For example, ensuring the year-round availability of E15 would support an additional 182,600 jobs and generate an additional $17.8 billion in economic activity. Because ethanol production involves U.S. farmers and processing plants located in rural communities, these benefits would be most directly felt in rural America. 

Finally, these actions would significantly increase U.S. energy independence and lessen the domestic impact of our ban on Russian energy imports by replacing them with U.S. biofuels. For example, about 8% of U.S. imports of oil and refined petroleum products come from Russia. Ensuring the year-round sale of E15 would potentially replace up to 5% of the liquid petroleum-based gasoline in the U.S. transportation sector with homegrown biofuels. Protecting the RFS from retroactive reductions will ensure that biodiesel can fill liquid energy deficiencies created by trade and market instability. 

The American people and this Congress stand united in our resolve to support the Ukrainian people in the face of Russian aggression and imperialism. We will take the actions necessary to ensure democracy in Ukraine endures. Increasing domestic energy production is an important part of our effort to sustain sanctions on the Russian economy, and we urge you to increase U.S. energy independence and decrease 

Read the original press release here.

Renewable Fuels Association

Mar 28, 2022

Sales of E85 flex fuel in California surged to a new record in 2021, jumping 55 percent over 2020 levels and nearly doubling since 2018, according to new data  released by the California Air Resources Board (CARB). Last year, California drivers purchased nearly 62.5 million gallons (mg) of E85 flex fuel, a blend containing up to 85 percent ethanol and 15 percent gasoline, for use in flex-fuel vehicles (FFVs). That’s up from about 40 mg in both 2019 and 2020, and 33.8 mg in 2018.

The surge in California E85 sales has accelerated further in 2022, as record-high prices for regular E10 gasoline are driving greater demand for lower-cost, lower-carbon alternatives. In recent weeks, E85 has typically been priced 30-50 percent below gasoline at stations across the Golden State.

California is one of just a handful of states that reports annual E85 sales volumes, but Renewable Fuels Association President and CEO Geoff Cooper said it is safe to assume that California now leads the nation in consumption of low-carbon flex fuels.

“During this time of record-high gas prices and heightened concerns about climate change, California drivers are seeking out options at the pump that are both more affordable and better for the environment,” Cooper said. “E85 satisfies both of those consumer demands. This new data show that when the fuel is made available and marketed properly, FFV drivers will absolutely respond. The combination of the California Low Carbon Fuel Standard, federal Renewable Fuel Standard, and a concerted promotional campaign by innovative retailers proves that the so-called ‘ethanol blend wall’ is a fictional barrier that can be eradicated with smart policy and marketing efforts.”

California’s largest provider of E85 noted that the momentum witnessed in 2021 has continued to build in 2022. “Demand for E85 has been on the rise this year, with increases of over 20 percent from January to February, and we expect to see the same for March,” said Greg Jones, Director of Business Development at Pearson Fuels. “We always want to encourage motorists to check their gas caps to see if they're driving a flex-fuel vehicle, and we are seeing more and more Californians taking advantage of  our website  and mobile app to find E85 stations near them. Drivers are seeing a real difference and saving quite a bit of money. In addition to that, we're focusing on blending our E85 with renewable naphtha, resulting in a nearly 100 percent renewable fuel that is 60 percent lower in greenhouse gas emissions compared to unleaded gasoline. We believe E85 can play an important role for decades and has the opportunity to become a low carbon fuel option for the millions of drivers who own these vehicles.”

Data from the California Energy Commission  show that the number of FFVs on California roadways was nearly double the amount of electric vehicles at the end of 2020.

Read the original story here.