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New ethanol bill receives mixed reviews

August 27, 2021

Next Generation Fuels Act penalizes efficient ethanol producers, while others believe it positions corn ethanol for future clean fuel use.

By: Jacqui Fatka

Ethanol and corn industry groups welcomed the introduction of the Next Generation Fuels Act of 2021 by Rep. Cheri Bustos, D-Ill., and a bipartisan group of co-sponsors. However, the American Coalition for Ethanol warns it may actually penalize many dry mill ethanol plants in production today that have taken steps to lower their carbon intensity.

“Ethanol is uniquely positioned to immediately and affordably decarbonize transportation, including through paving the way to future vehicles with greater fuel efficiency and fewer emissions,” says National Corn Growers Association President John Linder. “The Renewable Fuel Standard was a game-changer for corn farmers, and the Next Generation Fuels Act builds on that success in advancing our commitment to providing the cleanest, most efficient and lowest cost energy solution.”

The legislation would require high octane fuel, limit aromatics in gas, ensure all blends of ethanol receive the same RVP treatment as E10, and require future vehicles and retail fuel stations to be compatible with higher ethanol blends.

Renewable Fuels Association President and CEO Geoff Cooper notes that low-carbon liquid fuels like ethanol will be an essential part of the strategy to reach net-zero GHG emissions by mid-century. He added that in a recent letter to President Biden, RFA’s member companies committed to achieving a net-zero carbon footprint for ethanol by 2050 or sooner.

“Waiting and hoping for massive growth in battery electric vehicle sales and a greener electricity grid is not the way to address today’s energy security, air quality and climate concerns. We need real solutions right here, right now,” Cooper adds.

Illinois Corn Growers Association President Randy DeSutter, a farmer from Woodhull, Ill., notes, “One of the biggest concerns in rural Illinois is that our current energy policy chooses which renewable energies will win and which will lose. A policy like the Next Generation Fuels Act levels the playing field and allows fuels that can meet the standard to compete.”

The bill would reduce the carbon intensity of liquid fuels and passenger vehicles through increased use of higher ethanol blends. Recognizing the benefits of ethanol’s high-octane, low carbon properties in optimized vehicles, corn grower groups say the legislation promises to increase demand for corn and biofuels, reduce greenhouse gas emissions, improve air quality and human health, and increase fuel efficiency, all while supporting agriculture’s contribution toward addressing climate change and decarbonizing transportation.

Additionally, this bill provides automakers with more options to meet increasingly stringent fuel economy and greenhouse gas emission standards by utilizing ethanol blends up to 30% in vehicles designed and warranted for these fuels.

“This policy is even a win for automakers,” DeSutter adds. “They would now certify their new vehicles to meet emissions and fuel economy standards using this new fuel. The high-octane fuel makes it easier for them to meet their goals because these engines will get more miles per gallon. That increased fuel efficiency reduces emissions.”

Specifically, the Bustos bill would establish high-octane (95 and 98 RON) certification test fuels containing 20-30% ethanol, while requiring automobile manufacturers to design and warrant their vehicles for the use of these fuels beginning with model year 2026. The bill also includes a low-carbon requirement, specifying that the source of the octane boost must reduce lifecycle greenhouse gas emissions by an average of at least 40% compared to a 2021 gasoline baseline, as measured by the Department of Energy’s GREET model.

The legislation also includes a restriction on the aromatics content of gasoline, ensures parity in the regulation of gasoline volatility (Reid vapor pressure), corrects key variables used in fuel economy testing and compliance, requires an update to the EPA’s MOVES model, ensures infrastructure compatibility, and addresses many other regulations impeding the deployment of higher octane blends at the retail level.

Concerns on carbon accounting

Brian Jennings, CEO for the American Coalition for Ethanol, says, “While this legislation checks much off the ethanol industry wish list, like the previous version, its inadequate approach to carbon accounting would undermine many ACE-member plants and other U.S. dry mill producers who have made investments to reduce the carbon intensity of their ethanol.”

The Biden administration and many members of Congress are focused on how to reach net-zero emissions in the transportation sector by mid-century. “Since ethanol is the only transportation fuel that can achieve both net-zero and net-negative emissions, we should push for technology-neutral policy that holds all fuel producers accountable for their individual carbon footprints. This will ensure a growing market for low carbon ethanol in the future despite the hysteria surrounding electric vehicles,” Jennings adds.

The Next Generation Fuels Act contains a new “low carbon” octane standard which requires high octane fuel to be produced from sources with average lifecycle GHG emissions at least 40% cleaner than gasoline. Because every ethanol facility has its own unique carbon intensity, the legislation’s use of “average” to determine the lifecycle GHG emissions of ethanol shortchanges many producers.

“Under this legislation, ethanol from a coal-fired ADM facility, whose fuel is nearly as carbon-intensive as gasoline, would get the same access to the market as the most efficient farmer-owned ethanol facility, whose carbon footprint is at least 50% cleaner than gasoline, and in most cases 60 to 70% cleaner,” Jennings explained. “In other words, the bill as currently drafted would perversely reward ADM for doing nothing to reduce the CI of the fuel produced in its coal-fired facilities and penalize companies like Poet, KAAPA, Little Sioux Corn Processors, Ringneck Energy and dozens like them that have invested in technology innovations to reduce the CI of their fuel.”

“If this legislation were improved to allow individual CI scores for ethanol producers and give credit to farmers for practices that reduce emissions from fertilizer use and sequester carbon in the soil, not only would ACE enthusiastically support it, but it would be taken more seriously in Congress,” Jennings says.