E85 Boondoggle Of The Day: EPA Lets Corn-Free Ethanol Goal Slide

Edward Niedermeyer
by Edward Niedermeyer

Since corn-based ethanol began coming under attack for a wide variety of negative environmental and social impacts, the renewable fuels industry has sought to cover the sins of its corn juice gravy train with a coat of “advanced biofuel” greenwash. Accordingly, the ethanol blending mandate (from the 2007 Energy Independence and Security Act (EISA)) has included requirements for cellulosic and non-corn-derived biofuels which the industry says will replace corn… eventually. Unfortunately it seems that “eventually” is going to take longer than was expected, as the EPA has already slashed the 2010 mandate for advanced biofuel blending from 100m gallons to 6.5m gallons. And today the EPA announced rules for the 2011 advanced biofuel blending goal, and once again the non-corn fuels are getting the short end of the stick.

The new goal is as follows:

Biomass-based diesel (0.80 billion gallons; 0.68 percent)

Advanced biofuels (1.35 billion gallons; 0.77 percent)

Cellulosic biofuels (5 – 17.1 million gallons; 0.004 – 0.015 percent)

Total renewable fuels (13.95 billion gallons; 7.95 percent)

The new goal allows for a range of cellulosic biofuel production of between 5m gallons and 17.1m gallons. That means that it’s possible that next year’s cellulosic biofuel blending level could actually be lower than this year’s 6.5m target. The overall blending level for all renewable fuels next year is now set at 7.95 percent (13.95b gallons), down from 8.25 percent.

Why the reduction in renewable biofuel mandates, especially cellulosic ethanol which can be made from waste biomass? According to the EPA’s release

Based on analysis of market availability, EPA is proposing a 2011 cellulosic volume that is lower than the EISA target. EPA will continue to evaluate the market as it works to finalize the cellulosic standard in the coming months. Overall, EPA remains optimistic that the commercial availability of cellulosic biofuel will continue to grow in the years ahead.

Not that market demand (or lack thereof) has ever stopped the government from subsidizing corn-based ethanol. In fact, sales of E85 are so low that renewable f uel lobbyists worry that the so-called “blend wall” which prevents the blending of more than 10 percent ethanol in regular gasoline will hurt cellulosic and corn-based ethanol producers alike. But even the lobbyists from the Renewable Fuels Association admit that this drop in cellulosic biofuel blending goals will hurt the struggling industry, telling BusinessWeek

While this may be prudent for EPA based on market conditions, it does send a chilling effect through the investment community with respect to cellulosic ethanol technologies

And since the overall biofuel blending mandate hasn’t gone down, the cellulosic ethanol industry’s loss is the corn ethanol industry’s gain… even though the whole point of biofuel subsidies is to promote environmentally responsible options (weak demand hasn’t stopped subsidies for corn ethanol or electric cars). With 36b gallons of biofuel mandated by 2020 but no government support available for the struggling cellulosic and advanced biofuel industry, there’s little doubt but that corn ethanol will continue to benefit heavily from the EISA mandate. And until such time as renewable biofuels start receiving extra help (or the corn ethnaol industry is cut off from its flow of federal cheddar), the US will be no closer to a widely-available, environmentally-responsible gasoline alternative.

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  • Tparkit Tparkit on Jul 13, 2010

    "...even though the whole point of biofuel subsidies is to promote environmentally responsible options..." The whole point of biofuel subsidies was to create a federal transfer payment to Big Agra and the farmbelt states. (This is why the U.S. puts heavy taxes on biofuel imports.) Secondary and incidental to the wholly political nature of the federal government's biofuel program, the environmentalist industry picked up on biofuel to help sell their larger agenda of eco-frauds to the public. They hitched their horses to anything that could be played up as green.

    • George B George B on Jul 14, 2010

      Correct. Corn based ethanol goes away without the 54 cent per gallon duty on imported ethanol. Ethanol in gasoline may disappear without the oxygenate mandate that requires ethanol or the now banned MTBE in reformulated gasoline. Ethanol demand craters without the 51 cent per gallon economic incentive to add ethanol to gasoline. Very artificial market propped up by the US federal government because Iowa has an insanely large influence on who gets on the ballot for the presidential election. I'd like to see a deal between the US and Brazil where the US eliminates it's duty and incentives on imported Ethanol from Brazil in exchange for Brazil making corresponding duty reductions on cars exported from the US to Brazil. Potential win-win two-way trade.

  • Benders Benders on Jul 14, 2010

    George, You realize Brazil doesn't have ethanol to export, right? They actually imported US ethanol in March.

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