UNICA’s Comments to EPA on the 2014 Renewable Fuel Standards

Leticia Phillips — posted 29/01/2014

Brazil’s sugarcane ethanol producers submitted formal comments to the EPA Tuesday that expressed the industry’s serious concerns about the agency’s proposed standards for the 2014 Renewable Fuel Standard (RFS). UNICA’s (The Brazilian Sugarcane Industry Association) comments encourage the EPA to revise the proposed extreme and unjustified reductions in statutorily-specified volume requirements for advanced biofuels. The comments urge the EPA to amend the proposal to set volume targets that are in line with Congress’ and the Administration’s twin goals of replacing fossil fuels with advanced biofuels and other renewable fuels, and reducing greenhouse gas (GHG) emissions from transportation fuels.

You can read UNICA’s full comments here.

Previewing Our Comments to EPA on Proposed 2014 Renewable Fuel Standards

Leticia Phillips — posted 24/01/2014

The Environmental Protection Agency shocked the biofuels community in November by proposing to slash consumption requirements for advanced biofuels in the Renewable Fuel Standard (RFS). Even though advanced biofuel producers easily exceeded EPA’s 2013 target of 2.75 billion gallons, and in fact delivered nearly 3 billion ethanol-equivalent gallons of advanced renewable fuel last year, EPA suggests setting the 2014 requirement at 2.2 billion gallons – a 20 percent cut. EPA is currently accepting public comments on their proposal. Next week, Brazil’s sugarcane ethanol producers – under the auspices of UNICA, our trade association – will submit formal comments expressing the industry’s profound concerns about EPA’s unnecessary and unjustified proposed reductions in statutorily-specified volume requirements for advanced biofuels. UNICA’s well-founded comments (more than 80 footnotes and growing!) will urge EPA instead to set volume targets that are in line with Congress’ and the Administration’s twin goals of replacing fossil fuels with advanced biofuels and other renewable fuels, and reducing greenhouse gas (GHG) emissions from transportation fuels.

Here’s a preview of a few key points we plan to stress with environmental regulators.

OUR PRINCIPAL CONCERNS
First, UNICA believes implementing the proposal would mark a significant step backward from recent progress toward increased use of efficient, renewable biofuels with low lifecycle GHG emissions. Insofar as the proposal prioritizes more carbon intensive fuels over cleaner, more efficient advanced biofuels like sugarcane ethanol, it is contrary to the purposes of the Clean Air Act and to the President’s Climate Action Plan. Second, UNICA believes that all or a significant portion of the proposed reductions for advanced biofuels and total renewable fuels are beyond the scope of EPA’s authority under the Clean Air Act. Congress, as evidenced by the legislative history and reaffirmed by courts, intended the RFS to force technological change through increased production and mandatory use of biofuels.

A DEPENDABLE PARTNER
Brazilian sugarcane producers have made a long-term commitment to providing clean, renewable advanced biofuels to meet energy and environmental goals in Brazil and the United States, along with many other countries. We have invested billions in increasing production and infrastructure to meet the expected demand for clean renewable fuels. As a result, the Brazilian sugarcane industry has more than adequate capacity to help achieve the statutorily-mandated volumes of advanced biofuel. We continue to lead the way in showing that higher blends of ethanol (hint: we’ve been using E25 in Brazil for three decades!) are not only possible but also beneficial to the environment and economy.

BENEFITS OF ADVANCED BIOFUELS
Multiple studies confirm that sugarcane ethanol is the most efficient and environmentally responsible advanced renewable fuel in widespread commercial use today, generating precisely the type of environmental benefits Congress sought to promote in carving out a preference for advanced biofuels in the RFS and that President Obama seeks to further in his Climate Action Plan. To be consistent with both Congressional intent and Administration policy, EPA should avoid taking steps—such as those in this proposed rule—that prioritize other, less GHG-efficient fuels over more GHG-efficient advanced biofuels like sugarcane ethanol.

EPA CANNOT IGNORE SUGARCANE ETHANOL
Congress did not in any way distinguish between ethanol and non-ethanol biofuels when it created the advanced biofuel category in the RFS. The statute treats both equally and indistinguishably as the same thing – advanced biofuels. EPA has previously determined that sugarcane ethanol is an advanced biofuel because of its low lifecycle GHG emissions, a conclusion it reaffirmed most recently in its 2013 RFS final rule. There is no basis in the statute for discounting, excluding, or otherwise ignoring sugarcane ethanol volumes or other ethanol advanced biofuel volumes in calculating the advanced biofuel required volumes for 2014, as EPA has proposed to do. When Congress specified volumes for the subcategories of advanced biofuels (like cellulosic biofuels and biomass-based diesel) but not others, it deprived EPA of discretion to create and either favor or discriminate against other subcategories. EPA must consider and include the available volumes of ethanol advanced biofuels when calculating the total required volume of advanced biofuels to be used in 2014.

INSUFFICIENT AUTHORITY UNDER THE CLEAN AIR ACT
To justify its proposed reduction of the total renewable fuel volume from 18.15 billion gallons to just 15.21 billion gallons, EPA cites two statutory provisions in the Clean Air Act: (1) the cellulosic waiver authority and (2) the general waiver authority. While no one contests the necessary reduction of cellulosic biofuels obligations to reflect lower-than-anticipated production of such biofuels, EPA grossly exaggerates this authority – and engages in regulatory gymnastics – in proposing a much larger than allowed reduction in the RFS. First, the “cellulosic waiver provision” cannot support the reduction because EPA’s authority under that provision is limited to reducing the required volumes of advanced biofuel and total renewable fuel by, at most, an amount equivalent to the projected production shortfall for cellulosic biofuel. For 2014, EPA projects a cellulosic biofuel shortfall of roughly 1.73 billion gallons, yet it proposes to cut required total renewable fuel volumes by 2.94 billion gallons—1.21 billion gallons more than the cellulosic biofuel waiver authority authorizes under any circumstance. Second, the “general waiver provision” cannot support the reduction because EPA has not even attempted to show that severe economic or environmental harm, at least one of which EPA must show to justify a cut, would result if the statutorily-mandated volumes were required. Adding insult to injury, EPA proposes a reading of “inadequate domestic supply” that stands Adam Smith on his head and defines inadequate supply to mean inadequate demand. What’s next? Changing the rules of soccer so red cards now count as goals? Let’s get real: Congress meant for the RFS to be technology-forcing. Otherwise they would have called it Renewable Fuels Suggestion.

THE BOTTOM LINE
The proposed rule will inevitably have two effects. First, it will reduce investment in, and production of, advanced biofuels at a critical time, as investors and producers reevaluate EPA’s commitment to the standards and goals Congress clearly set out in the RFS program. Second, by reducing incentives to produce and supply advanced biofuels, the proposed rule will increase the use of less-eco-friendly fuels, increasing GHG emissions and exacerbating the very environmental harms the law was meant to correct.

As environmental regulators consider the future of the RFS, we hope they’ll hear the chorus of voices from across the biofuels community urging common sense for America’s renewable fuel policy and urging EPA to ensure that a continued supply of reliable and renewable sugarcane ethanol keeps flowing into U.S. vehicles. If you agree with us, make sure that EPA regulators hear your concerns.

Telling Sugarcane Ethanol’s Full Sustainability Story

Leticia Phillips — posted 22/01/2014

The debate over America’s Renewable Fuels Standard (RFS), and the role that advanced biofuels like sugarcane ethanol play in meeting our clean energy goals, has largely focused on what the Environmental Protection Agency’s (EPA) appropriate volume targets should be moving forward.

But centering the debate on volume targets for all biofuels has let two key benefits of advanced biofuels slip out of focus: the potential for non-corn ethanol to drastically cut lifecycle emissions compared to gasoline, and the ability of biofuel feedstocks to be sustainably grown without harming the environment.

LAND-USE ADVANTAGES COMPARED TO CORN

Let’s start with emissions reductions, arguably the most important imperative to fighting climate change. EPA certified sugarcane ethanol as an advanced biofuel that cuts emissions 61% compared to gasoline after a careful lifecycle analysis of the entire production-to-consumption process in 2010.

Examining the “well-to-wheels” impact of this clean fuel shows sugarcane ethanol cut emissions from American drivers 2.2 million tons in 2012, equal to growing 57 million trees for 10 years. By itself, that’s impressive data, but the full sustainability sum is revealed when land-use benefits are included in the equation.

Sugarcane fields store roughly 60 tons of carbon per hectacre, including above and below ground and soil organic carbon. That is a significant amount of carbon sequestration potential, but it’s made even more impressive because unlike corn, sugarcane only needs to be replanted every six years. This reduces land tilling, cutting the amount of carbon released from the soil.

In turn, each hectacre of sugarcane produces around 7,000 liters (1,850 gallons) of ethanol, roughly twice the ethanol yield of corn. This means more energy is created on less land with less fuel burned to harvest the crops.

One step further along the production process, self-sufficient sugarcane mills in Brazil use leftover stalks and leaves (called “bagasse”) to power operations instead of fossil fuels, often producing enough power to sell clean electricity back to the grid. In 2010 alone, bioelectricity from these mills powered the homes of 20 million people.

INCREASING PRODUCTION WITHOU INCREASING ENVIRONMENTAL IMPACTS

And it gets better. Brazil’s sugarcane ethanol production can continue to grow while still protecting its native ecosystems and rainforests. A recent analysis by the international think tank Climate Policy Initiative concluded “there is room to increase Brazilian agricultural production via productivity gains, at no apparent cost to environmental conservation.”

These key sustainability facts are important to keep in mind when considering Brazil as a reliable partner for supplying Americans with advanced biofuels. Indeed, Brazil has the potential to replace 14% of global transportation fuel demand without altering current sugar production.

Brazilian sugarcane ethanol plays a modest but important role supplying America with clean renewable fuel, but it also plays an equally important role in creating a healthier and cleaner planet. By 2050, global energy needs could double, potentially increasing emissions 80% – unless we continue to pursue low-carbon and environmentally sustainable fuel options.

As Congress and the EPA deliberate over the future of the RFS, we hope they’ll consider the entire sustainability story of this advanced biofuel in their decision and set volume targets that continue to encourage the production and consumption of all available biofuels.

Previewing Our Testimony to EPA Supporting Advanced Biofuels

Leticia Phillips — posted 23/12/2013

The Environmental Protection Agency is hosting a public hearing on December 5 to hear from industry leaders on the agency’s proposed renewable fuel standards for 2014. I will be testifying on behalf of Brazilian sugarcane producers, and here’s an advance look at what I will say:

Good morning. My name is Leticia Phillips, and I am the North American Representative for the Brazilian Sugarcane Industry Association (UNICA). UNICA is the leading trade association for the sugarcane industry in Brazil, representing 60 percent of the country’s sugarcane production and processing.

Sugarcane ethanol production uses only 1.5 percent of Brazil’s arable land, reduces greenhouse gas emissions by 90 percent on average, compared to conventional gasoline, and helps move beyond fossil fuels.

For over six years, the Brazilian sugarcane industry has worked collaboratively with EPA and the U.S. renewable fuel industry. Since the beginning of the RFS program, EPA had been a strong supporter of the modest but important role Brazilian sugarcane ethanol plays supplying Americans with sustainable fuel.

In 2010, the agency certified that Brazilian sugarcane ethanol cuts carbon dioxide emissions by more than 60 percent and designated it as an advanced renewable fuel. Following congressional intent, EPA has encouraged advanced biofuels because they are the category of renewable fuel with the greatest greenhouse gas reductions. So it came as an extraordinary shock and is deeply concerning that EPA has proposed to drastically reduce the volumes of advanced fuels for the 2014 RFS.

Slashing next year’s target for advanced biofuels is a huge step backwards from the Obama administration’s goal of decreasing greenhouse gases and improving energy security. Advanced biofuels, including Brazilian sugarcane ethanol, reduce carbon dioxide emissions by over 50 percent compared to gasoline and are a proven solution for addressing climate change. Yet, EPA’s proposed formula for setting advanced biofuel targets blatantly ignores its own estimates that 650-800 million gallons of sugarcane ethanol can be supplied to the United States in 2014.

As my colleagues on this and other panels will testify, EPA’s proposal pulls the rug from under the advanced biofuels industry, not just Brazilian sugarcane producers. EPA is proposing to cut advanced biofuel volumes next year by more than 40 percent compared to the requirements written into the RFS statute. Ironically, EPA is proposing a less than 10 percent reduction to volume requirements for conventional biofuels, which include a number of grandfather facilities that may well not meet the minimum requirement of 20 percent reduction.

EPA should set renewable fuel standards that encourage production and consumption of all available advanced biofuels. Because the domestic market for American biofuels is growing rapidly. EPA originally projected that the U.S. would need to import around 660 million gallons of Brazilian sugarcane ethanol to meet the 2013 advanced biofuel standard. However, total sugarcane ethanol imports will end this year at only 450-500 million gallons – not because Brazil has exhausted its capacity for exports – but because American production of advanced biofuels is expanding quicker than EPA forecast.

Congress clearly intended to encourage greater use of advanced biofuels year over year, in order to achieve the largest GHG reductions possible. That’s why UNICA supports EPA’s Option 1, which would set the advanced biofuel volume requirements based on the availability of advanced biofuels plus carryover RINs.

We also encourage EPA to consider implementation of California’s low carbon fuel standard when setting the RFS targets. The Golden State considers Brazilian sugarcane biofuels the low-carbon fuel with the best performance today and the only fuel available at commercial scale to contribute to meeting its low-carbon fuel standard. Similarly, we urge the Administration to consider the repercussions for trade policy. Europe has already assessed dumping charges on some U.S. biofuels, and the last thing the global biofuels market needs is policy reversals that flood other countries with unwanted product.

Our association looks forward to commenting further on this proposal and will continue to play an active role in the RFS rulemaking process, serving as a source of credible information about the efficiency and sustainability of sugarcane ethanol. Likewise, Brazil will continue to be a strong, dependable partner helping America meet its clean energy goals. Thank you.

Our Holiday Wish List

Leticia Phillips — posted 19/12/2013

‘Tis the season for family, friends and holiday wishes. December is also a nice time to reflect back and think ahead to the New Year.

In 2013, advanced biofuels continued to flourish, and Brazilian sugarcane producers stayed active in sharing vital facts about clean, advanced renewable fuels like sugarcane ethanol. Here in the United States, the federal Renewable Fuel Standard (RFS) remained the primary focus of debate.  We submitted comments in April to the Environmental Protection Agency on their proposed 2013 RFS requirements and delivered a white paper in May to the House Committee on Energy and Commerce to illustrate the ways sugarcane ethanol is helping America meet its RFS goals. More recently, we sounded the alarm on the damage EPA’s 2014 RFS proposal will cause to the emerging advanced biofuels industry.

Heading into the New Year, it’s clear the decisions confronting lawmakers and EPA regulators on the RFS will have a great impact on our world’s journey towards decreasing greenhouse gases and improving energy security.  So in the spirit of the season, here’s our wish list naming the top three presents we’d either like to see under the tree or delivered in 2014.

1 – EPA reconsiders the agency’s current proposal and sets renewable fuel standards that encourage production and consumption of all available advanced biofuels.
Slashing 2014’s target for advanced biofuels is a leap backwards on the path to reach the Obama Administration’s energy and environmental goals. Advanced biofuels, including Brazilian sugarcane ethanol, reduce carbon dioxide emissions by over 50 percent compared to gasoline and are a proven solution for addressing climate change. We hope EPA won’t finalize a proposal that ignores the 650-800 million gallons of sugarcane ethanol that are available to supply the United States with more advanced biofuel in 2014.

2 – No unnecessary, burdensome requirements on foreign biofuel producers.
Under a separate EPA proposal, sugarcane producers would be subject to a host of onerous new requirements when exporting to America. Requirements like physically segregating exported ethanol from the production plant all the way to port arrival in the U.S. and spending considerable amounts on third-party auditors would cost roughly $1 million for every 5 million gallons exported by our estimates. EPA’s intentions are laudable, and we support the agency’s goal of ensuring the regulatory system that tracks U.S. biofuel consumption is accurate.  But as currently written we are concerned the regulatory process is being used to impose burdensome, anti-competitive requirements on foreign biofuels.

3 – Global free trade in biofuels continues to flourish.
In 2013, the U.S. domestic market for biofuels grew rapidly. EPA originally projected that the U.S. would need to import around 660 million gallons of Brazilian sugarcane ethanol to meet the 2013 advanced biofuel standard. However, total sugarcane ethanol imports will end in 2013 at around 450-500 million gallons. The reduction in imports is because American production of advanced biofuels is expanding quicker than the EPA forecasted – NOT because Brazil has exhausted its capacity for exports. As I’ve said all along, Brazil and the U.S. have a responsibility to work together to build a global biofuels market that provides clean, affordable and sustainable solutions to the planet’s growing energy needs.  We’re making progress that should continue in 2014.

Brazilian sugarcane producers look forward to continuing to play an active role in the RFS rulemaking process and tackling the challenges that lay before us in the next year. Happy Holidays and best wishes for a happy, healthy and prosperous New Year!