Ethanol: Envisioning Biofuel Policy’s Future

Could the California Air Resources Board’s plan to virtually eliminate the need for liquid fuels in the state in the years to come be the wave of the future for national or global policy aimed at bigger greenhouse gas emission reductions? That’s a question ethanol industry and other liquid-fuel proponents often ponder, speakers said during the National Ethanol Conference here Tuesday.

Companies like DuPont are developing cellulosic ethanol technologies at a time when the Renewable Fuel Standard has become too unstable for their liking — forcing such companies to look at fully launching their technologies commercially in other nations.

The CARB has been under fire from the ethanol industry for years for what the industry says are unfair greenhouse gas emissions penalties leveled at corn ethanol in the state’s low-carbon fuel standard, while simultaneously enacting state policies that favor the use of electric vehicles, for example.

However, there is no question about where California energy policy stands.

“Trying to eliminate liquid fuels terrifies the fuels community,” said John Eichberger, executive director of the Fuels Institute. “As California goes, so goes the nation. I’ve always been a big proponent of the consumer. Going to such dramatic positions that California has gone to doesn’t keep consumers in mind. We’re trying to evaluate these things to make sure the consumer has a voice.”

Jan Koninckx, global business director for advanced biofuels for DuPont Industrial Biosciences, said while the California way may not be suitable on a national scale, at least it’s consistent.

“You have to give California credit,” he said. “It puts its money where its mouth is, saying ‘we want to be more sustainable.’ It’s a choice California made. You can say they are consistent and predictable. What is key is not the perfect analysis. What is key is that you choose something that is pragmatic and you stick with it.”

Leading up to and following the announcement of the final Renewable Fuel Standard volumes in November 2015, cellulosic ethanol companies made a public push to make sure administration officials knew they were planning to invest in other countries because of uncertainty surrounding the RFS.

Koninckx said one of the reasons RFS support has wavered is because an environmental community that once stood firmly behind the production of biofuels to reduce carbon emissions has since changed course.

“One of the stakeholders we’ve lost is the environmental community,” he said. “We should go and listen to them.”

Koninckx said industries such as the cellulosic ethanol industry would benefit from some sort of a consistent global regulation directing the use of more low-carbon fuels.

“It would be perfect if there was a global regulation,” he said. “It is important that we have the environmental community with us in that process. I think it starts small, it starts local, then it works toward a global goal. You see a global awakening interest.”

POLICY INCONSISTENCY

Koninckx said that in the absence of consistent biofuels policy in the United States, DuPont has started to explore the world for other possibilities.

In particular, he said, cellulosic ethanol may have a significant inroad into China where vehicle technology is changing rapidly and may open the door for more biofuels.

During a panel earlier in the day, a group of scientists talked about the potential for expanding ethanol markets by establishing national standards for high-octane fuels. This could mean a larger market for higher blends of ethanol.

Eichberger said if the RFS proves not to be the future of low-carbon federal policy in the United States, finding and implementing the ‘correct’ policy likely could take many years in the current political environment.

“Federal government policy takes a long time to change,” he said. “It could take 10 years, then another 10 to 15 years to implement.”

Although times are tough for ethanol producers and the farmers who supply them corn, Koninckx said he believes it is a time of opportunity.

More on the RFS


“I’m very excited,” he said. “Oil prices are going to snap back. As farmer income is coming down, we will see politicians’ support increase on the ag policy side.”

Bob Dinneen, president and chief executive officer of the Renewable Fuels Association, said he believes the RFS may be the foundation for future low-carbon federal policy.

“I see the RFS morphing into a national carbon policy program,” he said. “I’m not so sure you need to have a whole new policy written in Washington. But we need the environmental community to come back to the table.”

Despite the push by environmental groups and others to move away from liquid fuels, Eichberger said the ethanol industry can take comfort in knowing such products will continue to be in high demand.

“In 110 years the oil industry has lost just 2% of its market share,” he said. “We won’t see a massive erosion in market share. We’re still going to see a 90% market share. With liquid fuels, there are tons of opportunities. The mixture of fuels will change, but there still is a bright future. We’re not going to lose out to electric vehicles.”


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