Report: the future of biofuels is not in corn, better alternatives available

A new report released today by Food & Water Watch, the Network for New Energy Choices, and the Vermont Law School Institute for Energy and the Environment shows that of all possible biofuels, corn based ethanol scores worst when it comes to environmental impacts, consumer benefits, and greenhouse gas emission reductions. The corn ethanol refinery industry, the beneficiary of new renewable fuel targets in the proposed energy legislation as well as proposed loan guarantee subsidies in America's 2007 Farm Bill, will not significantly offset U.S. fossil fuel consumption without unacceptable environmental and economic consequences, the report finds.

The findings do not come as a surprise to Biopact and other energy experts (such as Claude Mandil or Fatih Birol from the IEA). American consumers should know that there is a sound alternative to the subsidised 'lobby fuels' they are now forced to pay for. They could import fuels that do benefit the environment, have a positive energy balance, reduce greenhouse gas emissions, are far less costly and that may benefit poor countries in the developing world. Ethanol made from sugarcane would be an example (earlier post), biofuels made from cassava (more here) or sweet sorghum another. But these good biofuels are currently blocked out from the U.S. consumer market because of a $54 cent per gallon import tariff, put in place to protect corn ethanol, which costs 76% more to make than sugarcane ethanol.

The European Union has recently admitted that imported biofuels are much better for all of us. Trade chief Peter Mandelson has said biofuel subsidies for farmers in the wealthy West can no longer be defended (here). And Sweden has even become a staunch advocate of a 'biopact' of sorts, explicitly fighting for trade distortions to be removed (earlier post). It is time the U.S. follows the example.

Food & Water Watch Executive Director Wenonah Hauter says that the new Farm Bill which supports corn ethanol in the U.S. benefits only a specific group of people: "Rural communities won't benefit from the Farm Bill becoming a fuel bill. In the long run, family farmers and the environment will be losers, while agribusiness, whose political contributions are fueling the ethanol frenzy, will become the winners".

Rising oil prices, energy security, and global warming concerns have led to today's 'go yellow' hype over corn ethanol. But all biofuels are not equal. Expansion of the corn ethanol industry will lead to more water and air pollution and soil erosion of America's farm belt, while failing to significantly offset fossil fuel use or combat global warming. - Scott Cullen, Senior Policy Advisor for the Network for New Energy Choices.

The report, The Rush to Ethanol: Not all BioFuels are Equal [*.pdf], is a comprehensive review of the literature on the environmental and economic implications of pinning America's hopes on corn ethanol to reduce dependency on fossil fuels. Report findings include the following:

• Not all biofuels are equal. Corn - now used to produce 95 percent of U.S. ethanol and the only commercially viable ethanol feedstock prepared to capitalize on refinery subsidies in the Farm Bill - is the least sustainable biofuel feedstock of all raw materials commonly used.
• The capacity of corn ethanol to offset U.S. fossil fuel use is extremely limited. Dedicating the entire U.S. corn crop to ethanol production would only offset 15 percent of gasoline demand. Conversely, modest increases in auto fuel efficiency standards of even one mile per gallon for all cars and light trucks, such as those passed by the Senate last month could cut petroleum consumption by more than all alternative fuels and replacement fuels combined.
• Corn ethanol is the wrong biofuel for combating global warming. The most favorable estimates show that corn ethanol could reduce greenhouse gas emissions by 18 percent to 28 percent, while cellulosic ethanol is estimated to offer a reduction of 87 percent compared to gasoline. [Note, first-generation sugarcane ethanol reduces GHGs by 80 to 90 percent]
  
• Ethanol is not the solution to revitalizing rural America. While higher commodity prices and cooperatively owned ethanol refineries could be a boon to independent farmers, unregulated ethanol industry growth will further concentrate agribusiness, threatening the livelihood of rural communities.

Michael Dworkin, of the Vermont Law School Institute for Energy and the Environment, says that "as long as we spend more on subsidizing energy suppliers than we do on investments in energy efficiency, we are on a path to pain. We are already subsidizing corn-ethanol with more money than we spend on high-mileage cars or on quality mass-transit. That's good for some companies and some politicians, but it"s bad for our nation and our world."

Both the farm and energy legislation being debated in Congress contain provisions that will set biofuels policy for years to come. While the politicians promise that America will be driving on switchgrass-based ethanol instead of gasoline in the next decade, the majority of the subsidies will go to corn-based ethanol refiners in the near term:
energy :: sustainability :: corn :: ethanol :: biofuels :: energy balance :: greenhouse gas emissions balance :: subsidies :: tariff :: lobby :: agribusiness :: United States ::

The groups made recommendations on U.S. biofuels policy including the following proposed reforms to ethanol provisions of the 2007 Farm Bill:

• Biofuels promotion policies should be tied to a sustainable fuel standard that ensures best management practices of land, water, and soil use, and other measures to reduce impacts on wildlife and natural ecosystems.
• Any ethanol funding in the U.S. Farm Bill should focus on research and development of cellulosic ethanol. There is sufficient private investment in corn ethanol development and refining already. Because cellulosic ethanol is not ready for market, any subsidies for refining in this year's bill will only lock U.S. ethanol production even more tightly to corn.
• No coal-fired ethanol refineries should be eligible for federal subsidies. Instead, small scale ethanol refineries should be encouraged to use lignin, a cellulosic byproduct, as fuel.
• Loan guarantees for refineries should be directed to locally owned facilities that benefit farmers and rural communities. The farm bill should include measures similar to those in place in Minnesota to ensure that subsidies are only provided to refinery operations that are farmer majority-owned.

Biopact welcomes this report, but has some small additional remarks:

(1) of course, energy efficiency and smart conservation are always the single biggest priority whereas policies that stimulate life-style changes are important too (e.g. promoting more public transport, which is far more efficient, or healthy mobility options); biofuels clearly come in at the bottom of a long list of priorities.

But (2) if biofuels are introduced, U.S. consumers should have the right to import fuels that are much better than corn ethanol. They should be allowed to choose biofuels made elsewhere that can be demonstrated to effecively reduce GHGs, and that benefit small, poor farmers and rural communities in the developing world. Unlike corn ethanol, these fuels might be competitive without subsidies. Brazilian ethanol costs 76% less to make than U.S. corn ethanol.

(3) A set of social and environmental sustainability criteria should be introduced, which shows consumers which biofuels have what kind of impacts. This allows them to make informed decisions, that go beyond the non-choice they now face.

(4) For a win-win scenario to materialise - importing good biofuels from the Global South - both subsidies for Big Corn must be removed, and the $54 cent per gallon import tariff on imported ethanol must be scrapped.

(5) Finally, subsidies are not bad in themselves, provided they are temporary and distributed in a fair way. Subsidies can be used to kickstart the establishment of a biofuel distribution infrastructure in the U.S. and to help refiners to invest in production capacity. It is important that such an infrastructure is in place, for imported biofuels to make a chance in the U.S.

However, the subsidies and trade distortions as they exist today to support the corn ethanol industry are both unjust, cost the consumer dearly (both in the U.S. and in corn importing nations), is bad for the environment and for the economy as a whole.

Americans have a choice: they can pick good biofuels, or bad biofuels. Ultimately, they have the political power to decide on the matter. If they want to make the right choice, all they have to do is to vote for the right Congressmen. Some suggestions: Jeb Bush, Richard Lugar or Michael Bloomberg. All have called for the $54 cent import tariff on Brazilian ethanol to be scrapped. On the other hand, the political system in the U.S. is such that even the most rational politicians, once elected, have the tendency to fall prey to the irrational demands of the mighty agribusiness lobby.

The Network for New Energy Choices promotes safe, clean, and environmentally responsible energy solutions. We advocate for energy conservation, energy efficiency and renewable energy as the solutions to our energy crisis and we work to educate the public about the way we produce, distribute and consume energy.

Food & Water Watch is a nonprofit consumer organization that works to ensure clean water and safe food in the United States and around the world. We challenge the corporate control and abuse of our food and water resources by empowering people to take action and by transforming the public consciousness about what we eat and drink.

The Vermont Law School Institute for Energy and the Environment distributes scholarly, technical and practical publications; provides forums and conferences for professional education and issue development; and serves as a center for graduate research on energy issues, with an environmental awareness.

References:
New Energy Choices: The Rush to Ethanol: Not All Biofuels are Equal [*.pdf] - July 2007.

Eurekalert: The future of biofuels is not in corn - New, comprehensive analysis shows how ethanol is being oversold - July 19, 2007.