The ethanol industry could see huge growth this year, but much of that hinges on how policy in Washington shapes that growth.
From EPA’s announcement late last week to allow the sale of E15 year-round in eight Midwestern states, to the highly anticipated Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model - which calculates the life cycle GHG emissions for the corn ethanol pathway - leaders with the Renewable Fuels Association (RFA) showed optimism during the National Ethanol Conference last week.
“This is a pivotal year for ethanol,” Troy Bredenkamp, Senior VP: Govt. & Public Affairs at Renewable Fuels Association (RFA) told AgriTalk’s Chip Flory. “Our theme for this National Ethanol Conference was powered by partnerships. And we kind of just went right down the list of things. If they all break our way, it’s going to be a really good year for biofuels, and in particular ethanol.”
Flory spoke about that optimism during “Chip’s Corner” on U.S. Farm Report last weekend. Flory says the key statement within Troy’s interview is when he said, “If they all break our way.”
“That’s a critical point that Troy is making there,” Flory says. “There are several things on the horizon. E15 in the eight Midwest states - that’s probably going to be pushed over to 2025. Then, with E15 nationwide, we could see some movement on that.”
However, Flory says the GREET model could also be a pivotal policy point, as it’s unclear if it will make the ethanol to jet pathway clear for corn-based ethanol in the year ahead.
“These are questions that are going to have a major impact on the biofuels industry in the years ahead,” Flory says. “But here’s the problem: the Biden administration is making the same mistake that past administrations have made. What they’re doing is there trying to give a little bit to each of the interested parties in these biofuel decisions, which prevents them from going all in on biodiesel, all in on ethanol, all in on Sustainable Aviation Fuel (SAF), or all in on renewable diesel.”
Instead, Flory says when the administration tries to please all parties instead of focusing on the science, it ends up watering down the positive impact it could have on the ag industry.
“So, what we end up with is kind of some halfway efforts, rather than a full effort on the biofuels in the year ahead. That’s kind of how I see things playing out. I think it could be a frustrating year on a lot of fronts,” he says.
The ethanol industry expects some clarity on the GREET model on March 1, 2024. Flory says it’s possible EPA Administrator Michael Regan will make an announcement during Commodity Classic. Leading into that announcement, there’s a lot of anticipation on how the GREET model will be interpreted, and if it will favor U.S. corn for SAF.
So, what is the GREET model?
“The GREET model determines just exactly what the land use effect is of corn-based ethanol, and how it’s impacting how we’re using the ground for farming out there,” Flory says. “The GREET model leans more favorable to corn-based ethanol than some of the old models that are saying we’ve taken much more ground out of other areas of agricultural production and put it into corn production.”
According to the Office of Energy Efficiency and Renewable Energy, “GREET is a tool that assesses a range of life cycle energy, emissions, and environmental impact challenges and can be used to guide decision-making, research and development, and regulations related to transportation and the energy sector.”
The Office of Energy Efficiency and Renewable Energy also states for any given energy and vehicle system, GREET can calculate:
- Total energy consumption (non-renewable and renewable)
- Fossil fuel energy use (petroleum, natural gas, coal)
- Greenhouse gas emissions
- Air pollutant emissions
- Water consumption
Flory says the GREET model could impact more than just corn for SAF in the U.S., as it could also have an impact globally, including when calculating the impact of crops from Brazil.
