EPA Final RFS2 Rule Seen as a Boost for Corn-Based Ethanol

February 3, 2010 06:00 PM

Roger Bernard, Farm Journal Policy & Washington Editor

The final rule for the Renewable Fuels Standard2 (RFS2) was finalized by the Environmental Protection Agency (EPA), and ethanol interests are mostly heartened by the changes in the final version versus the proposed rule previously released.

The key areas in the RFS2 rule:

Greenhouse gas (GHG) emission reduction requirements: EPA's final regs state that corn-based ethanol provides a 21% advantage over conventional gasoline, making it qualify as a conventional biofuel under the RFS2 rule. This means that all ethanol using corn as a feedstock -- existing grandfathered capacity as well as new production -- will qualify toward the conventional biofuels targets in the RFS2.

What helped corn-based ethanol meet that requirement that it provide a 20% reduction in GHGs relative to conventional gasoline? EPA Administrator Lisa Jackson says the agency used revised crop-yield projections and that land productivity helped drive the new guidelines, along with a greater use of corn residues, or distillers of grains and solubles, for animal feed than originally estimated. This will take less corn out of the world market, she says, leading to lower emissions from clearing forest land to grow crops.

The Energy Indpendence and Security Act (EISA) of 2007 required EPA to analyze indirect emissions arising from land-use changes resulting from using corn and other food grains for energy. The final rule found less impact on overseas GHGs from the production of corn-based ethanol.

EPA recalculated its estimates of emissions from indirect land-use changes (ILUC). In its initial analysis, it looked at land use in some 40 countries, but the new calculations were based on 160 countries, Jackson says. "This is, at its root, an effort to reduce greenhouse gas emissions," she says.

Setting the 2010 Cellulosic Standard: EPA also revised the requirement for biofuels produced from cellulosic materials. The original RFS2 proposal called for 100 million gallons of cellulosic biofuel in 2010, but that standard was revised to 6.5 million ethanol-equivalent gallons. "While this volume is significantly less than that set forth in EISA for 2010, a number of companies and projects appear to be poised to expand production over the next several years," EPA says. "In addition, while we have lowered the cellulosic standard below the level otherwise required in the Act, we have maintained the advanced biofuel and total renewable standards as that set in EISA for 2010. We are continuing to assess the growth of the cellulosic biofuel industry and intend to issue a notice of proposed rulemaking [NPRM] each spring and a final rule by Nov. 30 of each year to set the renewable fuel standards for each ensuing year."

EPA set the ethanol standard at 12.95 billion gallons for 2010, with a requirement of 950 million gallons of advanced biofuels, including cellulosic ethanol and biomass-based diesel fuel.

Jackson says the new rule also allows production of soybean biodiesel to go toward meeting the renewables mandate.

Here's a link to read more about EPA's decision.

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