This talk describes a recently launched research project that builds on multi-stakeholder discussions over the past three years. My recent biofuels policy discussion paper represents an early product of the project.
Note that the AEO projections are inaccurate because they count biofuels as having zero transportation sector CO2.
BAU projection is without CAFE and RFS; for sketch model, normalize to 2005 level of 1,985 TgCO2/yr
Concludes that ethanol from this facility has a GHG intensity of 55 gCO2e/MJ, or 40% lower than gasoline at 92 g/MJ. This ethanol result is 21% lower than the GREET default of 69 g/MJ.
Biofuels in a Cap & Trade Context John M. DeCicco School of Natural Resources and Environment University of Michigan 17 November 2009
Scientists and policy analysts focused on land use issues, forest and grassland protection well understood the importance of carbon stocks
Righelato & Spracklen Science (2007): "Carbon mitigation by biofuels or by saving and restoring forests?"
Extensive work and debate on best approaches for forest protection, particularly in the tropics
Complexity of factors (e.g., Lambin et al. 2001)
Role of incentives (e.g., Mollicone et al. 2007); other work on the issue, such as efforts on REDD
Ratio of natural land area converted per unit area of biofuel feedstock expansion Source: John Reilly (MIT) presentation at CRC Workshop on Lifecycle Analysis of Biofuels, Argonne National Laboratory, Oct. 21, 2009.
The Big Debate on Biofuels and Land-Use Change
It was generally recognized that, as for any expansion of agriculture, biofuel feedstock production increases land conversion pressure
See, e.g., IEA (2004) Biofuels for Transport report
Recent literature has amplified the concern:
Searchinger et al. Science 29 Feb 2008 Using cropland for biofuel increases GHG from LUC
Fargione et al. Science 29 Feb 2008 Land clearing and biofuel carbon debt
Wise et al. Science 29 May 2009 Integrating energy and land use systems for CO 2
LIFECYCLE GREENHOUSE GAS EMISSIONS.—The term ‘lifecycle greenhouse gas emissions’ means the aggregate quantity of greenhouse gas emissions (including direct emissions and significant indirect emissions such as significant emissions from land use changes), as determined by the Administrator, related to the full fuel lifecycle, including all stages of fuel and feedstock production and distribution, from feedstock generation or extraction through the distribution and delivery and use of the finished fuel to the ultimate consumer, where the mass values for all greenhouse gases are adjusted to account for their relative global warming potential.
Sketch Model for Analyzing Transportation Sector GHG Emissions Missed by a Cap Derived from DOE EIA Annual Energy Outlook 2008 and 2009, normalized so that the 2005 level of U.S. transportation sector CO 2 emissions = 100. Business-as-usual (BAU) scenario has neither vehicle efficiency gains nor RFS. Vehicle efficiency includes CAFE per EISA (prior to California compromise) plus EIA's projected efficiency gains in other transportation modes. "Apparent emissions" are the levels projected by DOE, incorporating the effect of the RFS and using the renewability shortcut (that is, excluding biogenic CO 2 ).
Apparent Reductions from Biofuels Apparent reductions from biofuels are the difference between EIA's projections ("Apparent emissions") and the levels projected based on vehicle efficiency only. These reductions would be fully "real" only if all uncapped biofuel and feedstock related emissions are included and no leakage is involved. Major uncertainties are involved for N 2 O and CO 2 leakage from land-use change.
Wide Uncertainties for Actual Biofuels GHG Impacts Lower GHG intensity values assume that the nominal lifecycle carbon intensity requirements of the RFS are met and that real-world impacts are in fact limited to the levels required by the regulation. Higher GHG intensity values are double the lower values.
Summary Estimates of U.S. Transportation-Related GHG Emissions Missed by a Cap In 2020, for example, missed emissions amount to 17%-22% of the sector's 2005 emissions level, comparable to the relative magnitude of economy-wide reductions proposed for that time frame. Converted to absolute values, missed emissions range 342-430 TgCO 2 e in 2020.
U.S. Transportation Sector CO 2 Emissions: Plausible Real Impacts vs. EIA AEO Projections
Economists may say "as upstream as possible," but …
Not possible to ascertain net GHG emissions impacts at either refinery input or output ("refinery gate")
Biofuels and other fuel components are commonly blended at points farther downstream
Point of Finished Fuel Distribution
Corresponds to EPA's traditional expansive definition of "refiner" for regulatory purposes
This is the point in the supply chain where the final characteristics of fuel distributed to retail outlets is determined
Appropriate Legal Definition for POR This definition has long been used by EPA for regulating fuel composition, for example, in the Tier 2 sulfur rule and the RFS. It is often the point where fuel suppliers "break bulk," as it is known in the trade, which can be at a refinery but is often at a blending rack or other terminal facility where blendstocks from bulk carriers (pipelines) are combined with blending components to formulate finished fuels meeting a given specification.
Correctly Specifying the Cap for Transportation
The renewability shortcut misplaces accounting responsibility
Tailpipe CO 2 is an "emissions certain" in the sector regardless of the origin of the fuel
Restriction to "fossil-based" is too narrow
Balancing competitive considerations with ideal carbon accounting suggests that refiners:
Report total energy value of all fuel they distribute
Hold allowances sufficient to cover carbon content based on conventional fuel energy equivalence
Obtain credit against allowance requirements only to extent of fuel or feedstock net uncapped emissions based on supply-chain accounting (described below)
Example Allowance Calculation for Unrated E85 Calculation for 1 million gallons of E85 (85% ethanol, 15% gasoline): By way of comparison, 1 million gallons of gasoline would directly emit 8,498 tCO 2 (metric tons of carbon dioxide), which determines a refiner's allowance submission requirements for distributing that fuel. The lower number of allowances needed for the unrated ethanol reflects only the lower volumetric energy density of ethanol. Carbon emissions for cap accounting purposes are assumed to be the same as those of gasoline on an energy-equivalent basis.
Fuel and Feedstock Accounting Standards (FFAS)
Accounting standards, not performance standards (a reporting protocol rather than a regulation)
Voluntary: intended to track uncapped emissions
Applies to facilities in the commercially traceable supply chain
"Facility" can be a farm, forest, biorefinery or multi-product processing plant
Practically speaking, agricultural facilities are likely to be treated at some level of aggregation, such as district or cooperative, but localization is needed to minimize adverse selection problems
system boundaries are restricted to flows physically connected to the product under study*
static accounting, using current (e.g., annual) data
boundaries expanded to include all system-wide impacts that occur as a consequence of an action, even if not physically connected*
dynamic accounting, including intertemporal effects
*Gnansounou et al. (2008), review of accounting approaches for biofuels ILUC Businesses will argue forcefully against being held legally accountable for impacts not reasonably attributable to their own actions and which may (or may not) occur in the future.
Facility-level carbon balances for tracking GHG emissions in the fuel supply chain
Mueller, S., et al. 2008. The Global Warming and Land Use Impact of Corn Ethanol Produced at the Illinois River Energy Center. Report for Illinois Corn Marketing Board and Illinois River Energy. Chicago: Energy Resources Center, University of Illinois at Chicago, July.
A well-documented traditional LCA using GREET model, deconstructed here to illustrate how FFAS could be applied.
Allowance Calculation for FFAS Rated E85 Adding the net uncapped emissions credit of 88.8 g/MJ to the direct CO 2 emissions from fuel combustion of 71.52 g/MJ yields a net credit of 17.25 g/MJ, which enters into the calculation below: Therefore, a refiner would need to submit only 100 CO 2 allowances for this batch of fuel, a large reduction from the 6,167 allowances needed for unrated E85. Note that this value is much smaller than, and not directly comparable to, LCA results, because the FFAS approach needs to address only uncapped emissions. This illustration entails many LCA defaults as used in the referenced case study (Mueller et al. 2008). Suppose, for example, actual N 2 O emissions from corn growing were 3x as large as the IPCC default. That change alone would raise the allowance requirements to 3,073 tCO 2 e.