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Unintended Consequences from EPA Proposal Could Limit U.S. Access to Advanced Biofuels
Leticia Phillips — posted 17/02/2017
The U.S. Environmental Protection Agency (EPA) has accepted comments on a proposal that would allow, among other things, biofuel producers to partially process renewable feedstocks at one facility and further process them into renewable fuels at another facility. EPA intends this broad rule to increase the economics and efficiency of producing biofuels, particularly advanced and cellulosic biofuels, a goal Brazil’s sugarcane biofuel producers broadly support.
However, we are seriously concerned the proposal as currently written would upend nearly a decade of established practice and effectively prevent Americans from importing and using Brazilian sugarcane ethanol, one of the cleanest and most available advanced biofuels on the market, by changing how “biointermediates” are treated.
Since the beginning of the Renewable Fuel Standards (RFS) program, sugarcane ethanol has played a modest but important role supplying Americans with nearly 2 billion gallons of advanced biofuel. This important designation under the RFS indicates that a fuel reduces greenhouse gas emissions by at least 50 percent compared to fossil fuels.
The troubling concern with EPA’s proposal is characterizing undenatured imported ethanol, like sugarcane ethanol from Brazil, as a biointermediate product. Denaturing is the addition of chemicals to ethanol to ensure the alcohol is both not suitable for human consumption and clearly “marked” for use in automobile fuel tanks in the United States. For many technical and regulatory reasons, nearly all sugarcane ethanol leaves Brazil in an undenatured state and the denaturing chemicals are then added in the United States to comply with regulations set by the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Treasury Department. To underscore, this approach has worked well for the past decade without any reported cases of fraud that have hampered other parts of the RFS program.
Categorizing undenatured imported ethanol as a biointermediate will impose significant and costly new obligations that may be infeasible and unfair for Brazilian sugarcane producers to meet. The unintended consequence may be blocking American access to this important source of advanced biofuel, and would treat foreign products differently from domestic biofuel supplies.
We also believe EPA’s definition of biointermediate does not fit undenatured sugarcane ethanol. The Brazilian ethanol producing process does not involve “sequential” production of pre-processing feedstock at one facility and transportation to another nearby facility for the ultimate conversion to renewable fuel. Rather, the product exported to the United States is a finished product, not a feedstock. It is a liquid fuel that can be used, without further processing, for transportation.
Formal comments from Brazil’s sugarcane ethanol producers urge EPA to clarify that the biointermediate definition does not include undenatured sugarcane ethanol fuel that is subsequently imported into the United States and denatured. This exception will not alter the status quo for foreign ethanol producers, but would allow EPA to provide the biointermediate provisions to the few US-based producers to which they should logically apply.
Brazilian Sugarcane Biofuel Producers Applaud Increased EPA Support for Advanced Renewable Fuels
Elizabeth Farina — posted 23/11/2016
The Brazilian Sugarcane Industry Association (known by the acronym “UNICA”) today commented on the final 2017 renewable fuel standards from the Environmental Protection Agency (EPA). The association’s statement should be attributed to UNICA’s President, Elizabeth Farina.
“Brazil’s sugarcane ethanol producers applaud EPA for its continued leadership and support of advanced renewable fuels. By setting a higher final 2017 RFS volume requirement for advanced biofuels than originally proposed in May, EPA makes a powerful statement on the economic and climate benefits of renewable fuels.”
“Increasing requirements for advanced biofuels help ensure continued American access to sugarcane ethanol, one of the cleanest and most commercially ready advanced biofuels available today. This signal of support will also encourage innovations and increase production of second-generation biofuels, which hold incredible potential to increase per-acre ethanol productivity and unlock vast new cellulosic feedstocks.”
“We are proud of the modest but important role Brazil plays supplying the United States with clean, low-carbon renewable fuel. Over the past four years, nearly 1.2 billion gallons of sugarcane ethanol imported from Brazil flowed into American vehicles. During this time, sugarcane ethanol comprised only two percent of all renewable fuels consumed by Americans, but provided one-tenth of the entire U.S. advanced biofuel supply.”
“With the right market conditions, Brazil has the capacity to supply the U.S. with significantly greater quantities of advanced biofuel than the 200 million gallons assumed by EPA’s 2017 rule. Together, America and Brazil have built a global biofuels market, and we look forward to continuing to ensure the road to sustainable transportation is fueled by renewable biofuels.”
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The Brazilian Sugarcane Industry Association is the leading trade association for the sugarcane industry in Brazil, representing nearly 60 percent of the country’s sugarcane production and processing. More information on sugarcane ethanol and its role as an advanced biofuel is available at www.sugarcane.org/rfs.
Biofuels Play Central Role in Brazil’s Climate Goals
The Paris Agreement on Climate Change entered into force in September, starting a coordinated effort by the world’s governments to reduce carbon dioxide emissions and limit climate change impacts. It’s far from the end, though. Entering into force starts the hard work—meeting each nation’s decarbonization targets. Every country’s intended nationally determined contributions (INDCs) will reduce emissions and expand economic opportunities for clean energy. More than any other nation, Brazil’s INDC relies on biofuels to meet these goals.
Brazil’s INDC targets 37 percent lower emissions by 2025 compared to 2005, with further reductions by 2030. This assumes biofuels supply approximately 18 percent of the country’s energy mix by 2030 through greater sugarcane ethanol production, expanded second-generation biofuels and additional biodiesel for transportation.
Biofuels can meet this challenge. Ethanol and bioenergy produced from sugarcane already constitute 15.7 percent of Brazil’s energy mix, replacing more than 40 percent of gasoline and avoiding 600 million tons of carbon dioxide emissions since the beginning of the ethanol program in the 1970s. Just this past harvest, Brazil produced 7 billion gallons of advanced ethanol and 15 million megawatt-hours of bioelectricity from cogeneration.
While Brazil’s INDC and its related biofuel goals are ambitious, experience shows they are also realistic. Ultimate success relies on three fundamental pillars: predictable policy, sustainable production and technological innovation.
First, government policy must be clear and stable. Well-established rules of the road fostered Brazil biofuels with the first wave of ethanol’s growth government driven from the mid-1970s to the 1980s. The second wave of growth, starting in 2003, resulted from the introduction of flex-fuel vehicles. In the past few years, however, regulatory uncertainty has reduced investments and inhibited technological development. The lack of predictable policy has its cost and instead of having 10 to 30 new mills built per year, we see mills shutting their doors.
Brazil should maintain a regulatory framework, incorporating the positive externalities of renewable fuel into prices via consumption mandates or tax differentials favoring biofuel over gasoline.
Second, we must ensure sugarcane production continues to expand sustainably. Brazil’s Agro-Ecological Zoning policy prevents sugarcane expansion in the most sensitive biomes and in native vegetation, while authorizing expansion into 64.7 million hectares of suitable land. That’s about 7.5 percent of Brazil’s territory, compared to the one percent of land currently used for sugarcane production. Sustainability extends to paying sugarcane growers fair prices for their product. Brazil’s current approach is very effective, with the Council of Sugarcane Industry and Growers creating clear rules for cane prices and minimizing potential conflicts.
While there’s no sustainability silver bullet, Brazil’s current policies are a good start and must be maintained. In addition, we should consider innovative models like self-regulatory commitments and third-party certifications.
Third, we must enhance research and development to unlock next-generation biofuels and increase ethanol’s competitiveness. Second-generation ethanol is a reality in Brazil. Raizen is producing ethanol from cane bagasse in Sao Paulo and Granbio is producing ethanol from bagasse and straw in Alagoas. The Center for Sugarcane Technology has demonstrated we can quadruple ethanol’s productivity through innovation in the near future. Optimizing production, advancing genetic enhancements and expanding agronomy to increase feedstocks, on top of industrial re-engineering of our first-generation production to second-generation ethanol, can raise production from 1,850 gallons per hectare to 6,500 gallons per hectare.
From the beginning of Brazil’s ethanol program, technological innovations multiplied ethanol production by 20-fold, doubled cane yields and cut prices in half. We believe current innovations will create similar results in the next few decades, if research and development continue on track.
Reducing power sector emissions is an important start to slowing climate change, but to truly decarbonize, we must tackle transportation emissions. Earlier this year, U.S. transportation emissions passed power sector emissions for the first time since 1979 as new clean energy came online, and this trend will likely play out elsewhere as countries decarbonize. Biofuels are a proven solution to replace fossil-based transportation fuel. Together, America and Brazil have built a global biofuels market, showing how stable policy can create economic growth and environmental benefits.
Brazilian Sugarcane Biofuel Producers Urge Increased EPA Support for Advanced Renewable Fuels
“Brazilian sugarcane producers are proud of the modest but important role they play supplying the United States with clean, low-carbon renewable fuel. Over the past four years, nearly 1.2 billion gallons of sugarcane ethanol imported from Brazil flowed into American vehicles. During this time, sugarcane ethanol comprised only 2% of all renewable fuels consumed by Americans, but has provided one-tenth of the entire U.S. advanced biofuel supply.”
“Our official comments make clear that with the right market conditions, Brazil has the capacity to supply the U.S. with significantly greater quantities of advanced biofuel than the 200 million gallons assumed by EPA’s 2017 proposal.”
“EPA has the ability to stimulate the market for advanced biofuel. We urge the Agency to keep as close to the statutory volume requirements as possible and take measures to encourage the production and import of low-carbon renewable fuels, rather than discouraging these fuels by lowering their demand.”
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The Brazilian Sugarcane Industry Association is the leading trade association for the sugarcane industry in Brazil, representing nearly 60 percent of the country’s sugarcane production and processing. More information on sugarcane ethanol and its role as an advanced biofuel is available at www.sugarcane.org/rfs.
UNICA Appreciates EPA Increasing Advanced Biofuels in Final RFS Rule
Leticia Phillips — posted 30/11/2015
The Brazilian Sugarcane Industry Association (known by the acronym “UNICA”) issued the following statement regarding the Environmental Protection Agency’s (EPA) final renewable volume obligations for 2014-2016 through the Renewable Fuel Standard (RFS). It should be attributed to Elizabeth Farina, UNICA President.
“UNICA is heartened by EPA’s recognition the RFS requirements for advanced biofuel can and should increase. Today’s decision appears to leave the door open for continued American access to sugarcane ethanol from Brazil, one of the cleanest and most commercially ready advanced biofuels available today.”
“EPA has taken another step toward a cleaner, healthier environment, and Brazilian sugarcane producers stand ready to make even higher volumes of advanced biofuel available to America. According to the latest estimates, Brazil is on track to produce nearly six percent more sugarcane ethanol this year compared to 2014 – an additional 450,000 gallons. Under the right market conditions, Brazil has the capacity to produce up to two billion additional gallons of this advanced biofuel for export according to installed capacity figures.”
“America and Brazil have built a thriving global biofuels market, creating economic growth and environmental benefits, through good policy implementation. UNICA applauds today’s decision by EPA to maintain that growth by encouraging production of clean, low-carbon fuels.”
# # #
The Brazilian Sugarcane Industry Association is the leading trade association for the sugarcane industry in Brazil, representing 60 percent of the country’s sugarcane production and processing. More information on sugarcane ethanol and its role as an advanced biofuel is available at www.sugarcane.org/rfs
Our Authors
Eduardo LeãoExecutive Director
Emily ReesRepresentative for Europe
Leticia PhillipsRepresentative, North America
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