Ethanol Infrastructure Push

OMAHA (DTN) -- After renewable biofuels appeared to be effectively shut out of President Joe Biden's plan for infrastructure, leaders in the ethanol industry and their advocates on Capitol Hill are trying to make the case that biofuels can accelerate moves to a low-carbon economy.

In a briefing Friday to congressional staff and journalists, staff from the Renewable Fuels Association (RFA) laid out an aggressive policy agenda that first began with requiring the EPA to reestablish its focus on the Renewable Fuels Standard by rejecting refiner exemption requests; restore 500 million gallons of biofuel use from 2016; finalize blend volumes for both 2021 and 2022; and ensure biofuel blend volumes continue to grow after 2022. At the same time, RFA is calling for the adoption of a national low-carbon fuels standard (LCFS) that would require a reduction in average carbon intensity on an annual basis across the transportation sector.

In infrastructure, RFA staff pointed to the plans released by the Biden administration that would invest $170 billion long-term into electric vehicles and infrastructure -- such as 500,000 charging stations for EV vehicles. RFA wants the Biden administration to fund grants to expand higher blend volumes, as well as offer incentives or rebates for the manufacturing and sale of flex-fuel vehicles. RFA also wants streamlined regulations that will rapidly expand the use of E15 nationally, as well as use fuel-economy and greenhouse gas emission rules that will compel automakers to ensure cars and pickups are designed and warrantied to use higher-octane, mid-level blends.

Geoff Cooper, president and CEO of RFA, said the group has been holding a lot of meetings both with Biden's staff and lawmakers on the infrastructure proposal. "We don't really oppose what is being proposed for electric vehicles, but if the goal is truly to reduce emissions from transportation as quickly and as significantly as possible, we need to look at what we can do with the existing 260 million vehicles on the road and the existing 140,000 gas stations that are selling liquid fuels today," Cooper said. "The answer is the need to be selling fuels with a larger concentration of low-carbon renewable fuels."

Transportation is the largest single source of U.S. emissions at 29%, followed by electricity at 25%, industry in general at 23%, residential and commercial emissions at 13% and agriculture at 10%, according to EPA.

In a separate interview with DTN, Rep. Cindy Axne, D-Iowa, said she had pointed to the value of biofuels during a meeting with members of the House Democratic caucus and Secretary of Transportation Pete Buttigieg. Axne said she stressed the importance of using biofuels as a tool in the clean energy economy.

"We can easily implement higher levels of ethanol, moving into people's tanks and reducing our impact on the climate by providing opportunities to deliver higher blend level of ethanol," Axne said.

The congresswoman added, "We've got a great opportunity here to change the course of climate right away by using biofuels. Electric vehicles, I know there's a move right now towards those, but not everyone will be able to afford one. Fleets can't change overnight. This is not going to be an overnight thing, and we've got ethanol right in our backyard right now. Clean biofuels across the country can be used if we put in the infrastructure there for them to be used across the country."

Axne and others also are talking to committee chairs and other lawmakers on the relevant infrastructure and energy committees, she said. A lot of lawmakers are not aware of the advances made over time to make ethanol a cleaner-burning fuel, she said.

"You can't judge something if you aren't aware of it. This is why it's so important to bring to people's attention. They have misconceptions and old perceptions of what biofuels, of what ethanol, looks like and they don't know what the current biofuels industry is doing to be innovative," Axne commented.

RFA also highlighted the low percentages of use for higher blends of ethanol right now. Nationally, about 97% of ethanol use is in E10, or 10% ethanol blends. E15 -- despite heavy policy focus in recent years -- only accounts for .5% of ethanol use. E85 accounts for about 2.4% of use. Cooper noted it would take "some modest incentives" to get automakers to build more flex-fuel vehicles because the average equipment cost is just around $50 a vehicle. "It would be pretty easy to offset that."

At the moment, corn ethanol on average reduces emissions compared to gasoline by around 46% but efficiencies and technologies already on the market could push those percentages to around 60% in just a few years, Cooper said. In total, ethanol has reduced emissions about 980 million metric tons since 2008. That's the equivalent of taking 16.4 million cars off the road every year since 2008.

"By the end of the decade, we expect most of ethanol to be close to carbon neutral on a full lifecycle carbon basis," Cooper said.

When it comes to achieving broad greenhouse gas emission reductions, Cooper said "we should not be putting all our eggs in one basket" by focusing exclusively on electric vehicles. Even in California, EVs account for just about 3% of the vehicles on the road. Cooper added, "You can't just flip a switch and convert 260 million light-duty vehicles on liquid fuel today into electric vehicles."

While the Biden package leans on electric vehicles, Sens. Joni Ernst, R-Iowa, and Amy Klobuchar, D-Minn., have introduced a bill that would create a $500 million grant program for renewable-fuels infrastructure. Klobuchar and Sen. John Thune, R-S.D., also have introduced a bill that would require EPA to update its modeling for emissions from ethanol and biodiesel using the Argonne National Lab's Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) Model. RFA also cited the need for EPA to change its scoring models for biofuel emissions.

Troy Bredenkamp, senior vice president of government and public affairs at RFA, pointed to some policing the group conducted with Morning Consult last month. Numbers showed voters were evenly split on the idea of demanding that 10% of all vehicles become electric by 2035. That broke down to 42% each either supporting or opposed with 14% unable to answer. The survey showed 65% of people liked providing tax credits or other incentives for buying hybrid vehicles that can run on high volumes of renewable fuels such as 85% ethanol.

RFA maintains a majority of voters, 57%, would support a low carbon fuels standard to reduce emissions. The group's polling shows hesitancy around electric vehicles with 74% agreeing EVs are too expensive for everyday consumers and 79% of those polled agreeing the source of electricity is important when considering the environmental friendliness of an EV. Just 16% of those polled said they would strongly consider buying an electric vehicle as their next auto.

Other questions raised by RFA over a conversion to electric vehicles come down to the energy and natural resources it will take to expand battery production. Like computer chips and other technology, EV batteries demand large volumes of rare earth minerals. Biden's infrastructure plans call for increased investment in U.S. semiconductor production. The Department of Energy also is investing in more research into increasing domestic supplies of minerals needed in making batteries. China has taken over as the dominant force in rare earth minerals, accounting for nearly 63% of global mining production for those minerals over the past few years, according to the U.S. Geological Survey. The U.S. is a distant second in production at 12% in 2019, but the U.S. does not have the known reserves of rare earth minerals that exist in countries such as China, Brazil, Vietnam and Russia.

Chris Clayton can be reached at: Chris.Clayton@dtn.com

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