Transcript Slide 1

Carbon Tales: Information Infrastructures for
Sustainable Biofuels Governance
Adam Reed, J.D.
Research Fellow, CEES
William Boyd, J.D., Ph.D.
Professor of Law, CU Law
John Field, NSF IGERT Scholar
Colorado State University
MAS BioEnergy Program
Keith Paustian, Ph.D.
Professor of Soil Science
Colorado State University
CENTER FOR ENERGY & ENVIRONMENTAL SECURITY
UNIVERSITY OF COLORADO LAW SCHOOL
WOLF LAW BUILDING, 401 UCB
BOULDER, COLORADO
Overview
Biofuels Behaving Badly?
• Countries that make up much of the demand
for biofuels are now imposing a variety of
sustainability regimes to ensure that biofuels
production does not destroy rainforest or result
in excess GHG and pollutant emissions.
© Center for Energy and Environmental Security, 2009
A Brief and Selective Overview of Current Biofuels Policies
March 2010: EPA publishes RFS2 final rule in Federal Register
May 2009: EPA releases RFS2 draft rule
May 2009: DOE announces $786M in stimulus funding for “next-wave” biofuels
April 2009: California promulgates low carbon transportation fuel rule
April 2009: UK increases Renewable Transport Fuels Obligation from 2.5% to 3.3%
April 2009: EU Parliament and Council Directive 2009/28/EC Art. 17 establishes sustainability
criteria for biofuels.
March 2009: Europeans move to impose provisional tariffs on U.S. biodiesel producers: 261 407 Euros (~$328 - $511) per ton of U.S. biodiesel.
February 2008: Searchinger and Fargione articles published in Science
© Center for Energy and Environmental Security, 2009
The Challenge of Sustainability Regimes
• How do we ensure that a gallon of
“sustainable” biofuel is what it says it is?
•How do fuel producers and refiners comply
with multiple regimes at the US, EU, and State
levels?
• How can we drive the agricultural industry
toward better practices ahead of regulatory
schedule, through sustainable product
differentiation?
• How can we ensure that negative
environmental practices eliminated from
biofuel production don’t simply shift to the
less-regulated food production supply chain?
© Center for Energy and Environmental Security, 2009
U.S. Renewable Fuel Standard
Major Changes of RFS2 and EPA’s DRAFT Implementing Rules
• New Volumes of renewable fuel that must be blended into domestic fuel mixtures
• New Renewable Fuel Definitions, including the “renewable biomass” limitation
• New Lifecycle GHG Emission Reduction Requirements and Analysis
• Expanded Coverage of Fuel Use
• Changes to Renewable Identification Numbers (RIN) System
• Expanded Registration Process for Domestic/Foreign Renewable Fuel Producers
© Center for Energy and Environmental Security, 2009
United States Renewable Fuel Standard
Volumes
The United States renewable fuel standard (RFS) – 42 U.S.C. § 7545(o):
Renewable fuel volumes (a brief overview): 42 U.S.C. § 7545(o)(2)(B)(i)(I), (II), (III).
(fuel amounts Renewable Fuel
in bgal.)
Advanced Biofuel
Cellulosic Biofuel
(subset of
Advanced Biofuel)
Biomass-based
Diesel (subset of
Advanced Biofuel
2012
15.2
2.0
0.5
1.0
2015
20.5
5.5
3.0
TBD (at least 1.0)
2022
36.0
21.0
16.0
TBD (at least 1.0)
•
Existing U.S. ethanol plant capacity when the 2007 RFS was passed was approximately 8.2
bgal./year. (Renewable Fuels Assn., 2009). Any additional domestic supply beyond that must
come from new facilities, which are subject to higher standards.
•
BUT any ethanol plant that commenced construction in 2008 or 2009 that is/would be fired
with natural gas or biomass is also exempted from the new standards, so the numbers may
change around the margins (EPA says between 9 and 15 bgal. total may be grandfathered).
© Center for Energy and Environmental Security, 2009
U.S. Renewable Fuel Standard
Volumes (Detailed)
Source: EPA, “Regulation of Fuels
and Fuel Additives: Changes to the
Renewable Fuel Standard Program,”
EPA-HQ-OAR-2005-0161.
© Center for Energy and Environmental Security, 2009
Required Fuel Quantities of RFS2 by Fuel Type (Lifecycle GHG
Reductions Assumed)
The Renewable Fuel Standard
(36 Billion Gallons 2009-2022)
Advanced Biofuels
(21 Billion Gallons 2009-2022, 5.5 Billion Gallons by 2015)
Biomass Diesel
Cellulosic Biofuels
(2009-2012, 1 Billion Gallons
by 2012)
(16 Billion Gallons 2010-2022, 3 Billion Gallons
by 2015)
© Center for Energy and Environmental Security, 2009
United States Renewable Fuel Standard
Requirements for Fuels Produced at New Facilities
42 U.S.C. 7545(o)(2)(A)(i):
“Not later than 1 year after December 19, 2007, the Administrator shall revise the regulations
under this paragraph to ensure that transportation fuel sold or introduced into commerce . . .
contains at least the applicable volume of renewable fuel, advanced biofuel, cellulosic biofuel,
and biomass-based diesel . . . and, in the case of any such renewable fuel produced from new
facilities that commence construction after the date of enactment of this sentence, achieves at
least a 20 percent reduction in lifecycle greenhouse gas emissions compared to baseline
greenhouse gas emissions.”
What about “advanced biofuel,” “cellulosic biofuel,” and “biomass-based diesel?”
• “‘Advanced biofuel’ means renewable fuel, other than ethanol derived from corn starch,
that has lifecycle greenhouse gas emissions, as determined by the Administrator, after
notice and opportunity for comment, that are at least 50 percent less than baseline
lifecycle greenhouse gas emissions.” 42 U.S.C. 7545(o)(1)(B)(i). The same standard
applies for biomass-based diesel. 42 U.S.C. 7545(o)(1)(D).
• Cellulosic biofuel, “derived from any cellulose, hemicellulose, or lignin that is derived
from renewable biomass,” must achieve a 60 percent reduction in lifecycle GHG emissions
compared to baseline. 42 U.S.C. 7545(o)(1)(E).
© Center for Energy and Environmental Security, 2009
United States Renewable Fuel Standard
Definition of “Lifecycle Greenhouse Gas Emissions”
42 U.S.C. 7545(o)(2)(A)(i):
“The term ‘lifecycle greenhouse gas emissions’ means the aggregate quantity of greenhouse
gas emissions (including direct emissions and significant indirect emissions such as
significant emissions from land use changes), as determined by the Administrator, related to
the full fuel lifecycle, including all stages of fuel and feedstock production and distribution,
from feedstock generation or extraction through the distribution and delivery and use of the
finished fuel to the ultimate consumer, where the mass values for all greenhouse gases are
adjusted to account for their relative global warming potential.”
© Center for Energy and Environmental Security, 2009
U.S. Renewable Fuel Standard:
Definition of “Renewable Fuel” and “Renewable Biomass”
• Separate definition of “Renewable Biomass,” which refers to feedstocks that may be
used to make any renewable fuel.
• Planted crops, crop residue from land cleared or cultivated prior to 12/19/07
• Planted trees, tree residue from non-federal land cleared prior to 12/19/07
• Animal waste materials, byproducts
• Slash, pre-commercial thinnings from non-federal forestland, provided they are
not old-growth, late-successional forest, or classified as critically imperiled,
imperiled, or rare pursuant to a State Natural Heritage Program
• Biomass cleared from around buildings or public infrastructure to reduce risk
of wildfire
• Algae
• Separated yard or food waste
© Center for Energy and Environmental Security, 2009
U.S. Renewable Fuel Standard: Other RFS2 Changes
Renewable Identification Numbers (RINs)
• RINs ensure that volume mandates of the RFS are met by
fuel refiners.
• Every time a gallon of renewable fuel is produced, a RIN is
generated by the producer. When the refiner purchases the
fuel, they get the RIN with it.
• At the end of the year, every refiner must have a sufficient
number of RINs to ensure that they have blended the proper
amount of renewable fuel into their product. Refiners may
trade RINs.
• An expanded “D-code” covers the four new categories of
renewable fuel.
RIN:
KYYYYCCCCFFFFFBBBBBRRDSSSSSSSSE
EEEEEEE
K = Code distinguishing assigned RINs
from separated RINs
YYYY = Calendar year of production or
import
CCCC = Company ID
FFFFF = Facility ID
BBBBB = Batch number
RR = Code identifying the Equivalence
Value
D = Code identifying the renewable
fuel category
SSSSSSSS = Start of RIN block
EEEEEEEE = End of RIN block
Source: EPA, “Regulation of Fuels and Fuel Additives:
Changes to the Renewable Fuel Standard Program,” EPAHQ-OAR-2005-0161.
© Center for Energy and Environmental Security, 2009
U.S. Renewable Fuel Standard: Other RFS2 Changes
Renewable Identification Numbers (RINs)
• EPA has not proposed use of the RIN system to track GHG emissions related
to specific gallons of fuel. Instead, the final rule prescribes abstracted fuelpathway calculations (fuel, feedstock, process) to provide the basis for
compliance with GHG emission reductions.
• No mechanism exists to ensure that farmers do not switch non-feedstock
crops to new lands so as to skirt the requirement, and EPA claims such action
would be beyond its statutory authority.
© Center for Energy and Environmental Security, 2009
U.S. Renewable Fuel Standard: Other RFS2 Changes
Compliance with “Renewable Biomass” Limitations
• For domestic and foreign non-agricultural
feedstocks (trees, slash, animal waste), fuel
producers must comply with record-keeping and
reporting requirements for individual facilities.
Each facility must collect and maintain records
from feedstock producers to ensure that the
“renewable biomass” limitations are followed.
• For domestic agricultural feedstocks, EPA will
perform an “aggregate compliance determination.”
Individual record-keeping and reporting not
required, as long as baseline level of approved
agricultural land doesn’t increase.
• For foreign agricultural feedstocks, an aggregate
determination might be used if the source region
can provide sufficient monitoring data to support
it. Otherwise, foreign producers must verify using
individual record-keeping and reporting, as for
non-agricultural feedstocks.
© Center for Energy and Environmental Security, 2009
E.U. Renewable Fuel Goal
Broader in Scope of Energy Use
Percentage Goal Not Limited to Fuels Alone
“Each Member State shall ensure that the share of energy from renewable sources in
all forms of transport in 2020 is at least 10% of final consumption of energy in
transport in that Member State.” Eur. Parl. Doc. (COM(2008)0019 -- C6-0046/2008 –
2008/0016(COD)), Art. 3(4).
Unlike the U.S. RFS, electricity produced from renewable sources that is then used for
transport may be used to meet the goal.
© Center for Energy and Environmental Security, 2009
E.U. Renewable Fuel Goal
“Biofuels and other bioliquids that do not fulfill the sustainability criteria set out in
Article 17(2) to (6) shall not be taken into account.” Eur. Parl. Doc. (COM(2008)0019 - C6-0046/2008 – 2008/0016(COD)), Art. 5(1).
• Article 17’s detailed sustainability criteria apply to biofuels produced from raw
materials cultivated both inside or outside the territory of the Community. Id. at Art.
17(1). For all such biofuels, GHG emissions savings must be 35 percent. The number
ratchets up to 50% in 2017, and to 60% for biofuels produced from new facilities after
2017. Id. at Art. 17(2).
• The criteria allow only temporary “grandfathering” of existing facilities. While U.S.
facilities existing in 2008 – nearly 9 billion gallons of capacity – are permanently
exempted from the U.S. RFS’s GHG-reduction requirements, existing facilities in the EU
become subject to the sustainability criteria in 2013. Id.
© Center for Energy and Environmental Security, 2009
E.U. Renewable Fuel Goal
Sustainability Criteria
• Absolute prohibition on the qualification of biofuels produced from raw materials grown on land
with high biodiversity value, high carbon-stock, and peat-land. Eur. Parl. Doc. (COM(2008)0019 -C6-0046/2008 – 2008/0016(COD)), Art. 17(3) to (5).
• However, these prohibitions only refer to the land on which the raw material actually consumed as
fuel in the Community was cultivated. Indirect land-use changes due to rising global agricultural
commodity prices, themselves possibly a result of increased biofuel demand, are not considered.
© Center for Energy and Environmental Security, 2009
Future Voluntary Criteria
A Market Yet Untapped?
• Some consumers will want further assurances that their fuel was produced using the
most rigorous GHG reduction and land-protection practices.
• If this voluntary demand is large enough, renewable fuel producers going above-andbeyond sustainability regime requirements could charge a premium for their product.
• Of course, such a premium would have to come with credible third-party reporting to
verify what the producer claims. No such information system currently exists.
© Center for Energy and Environmental Security, 2009
A Developing Project Concept
Bridging the gap between biofuels sustainability regimes and information
infrastructures to ensure compliance
• CEES and CSU’s Natural Resource Ecology Laboratory (CSU-NREL) are developing a
project concept to:
• Construct a decision-support system for producers and biofuels emissions
analysts that allows estimations of batch-specific emissions (and emissions
savings) that occur “behind the factory gate;” in the production, transportation,
and refining of the feedstock. (CSU-NREL developing the BLUEGRAS model)
• Perform a series of assessments and case studies using the decision support
system to provide policy guidance in the further development of biofuels
sustainability regimes;
• Analyze the ways in which the decision-support system may integrate with
different sustainability regimes and information pathways in the US, EU,
California, and elsewhere; and
• Produce a report for policymakers detailing the capabilities of the system and
its implications for compliance systems vis a vis sustainability criteria
© Center for Energy and Environmental Security, 2009
Discussion and Questions
Thank you for your attention!
Interested in working with us on the proposal? Contact
[email protected]
© Center for Energy and Environmental Security, 2009