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Draft Final Recommendationsand Issues for ConsiderationAdditions/Revisions Since the October 15 EWG MeetingSubgroup 2:Issues Related to Co-Product CreditsAlan Glabe, Philip Heirigs, Paul Hodson,Stephen Kaffka, Don O’Connor, Mark Stowers, Oyvind VessiaPresented to the LCFS Expert Workgroup November 5, 2010Sacramento, CA
Outline • Priority List of Recommendations • Issues Discussed/Evaluated Since Last Meeting • More specificity in DGS displacement ratio recommendations • Review of Wang et al. (2010) paper on co-product accounting methods • Detail on soy biodiesel modeling issues • Miscellaneous Questions from Last EWG Meeting • Negative effects associated with co-products • Recommendation on how to treat corn oil as a co-product • Impact of DGS displacement ratios on carbon intensity
Priority of Recommendations Near-Term Assessment by ARB Staff: • Special issues in co-products related to soy oil (e.g., negative crushing margins in GTAP). • Consistent treatment of co-products between GTAP and GREET. • Diet substitution effects/displacement ratios for co-products used in animal feed. Short-Term Assessment by ARB Staff: • Diet substitution effects/displacement ratios for co-products used in animal feed. Longer-Term Assessment by ARB Staff: • Issues related to oilseed meals. • Issues related to new products developed from biofuel co-products. • Future directions in biofuel processing and co-products. • Integrated bio-refineries.
More specificity in DGS displacement ratio recommendations • No clear direction based on meetings with animal feed and nutrition experts • As such, three options available: • Develop a baseline close to what ARB is currently using (i.e., 1:1 ratio), which assumes no significant improvement in animal performance with DGS, but which better reflects the fact that DGS displaces both feed corn and SBM. • Develop a baseline similar to that recommended in the most recent Argonne work, which may be a better representation of real-world performance at the current time. • An improved Method 2A procedure that would be more dynamic and would allow biofuel producers to suggest alternative co-product credits estimates that are more applicable to their region and how their co-products are used in the animal feed market.
Review of Wang et al. (2010) paper on co-product accounting methods • Authors examined several methods of co-product accounting. • Although ISO stds recommend displacement method, there are cases in which that method gives “distorted fuel-based results” citing soy-based biodiesel. • Subgroup discussion/comments: • Noted concern about possible distortion, but equally concerned about potential arbitrary nature of selection on a case-by-case basis. • CARB should strive to use the displacement method to account for co-products as that is most reflective of real-world conditions. • All methods have advantages and disadvantages, but need to get as close as possible to ISO guidance. • If not consistent with ISO, ramifications need to be fully understood.
Detail on Soy Biodiesel Modeling Issues Synergy of Corn and Soybean Shock 7
Negative effects associated with co-products • At the Oct. 15 EWG meeting a question about negative side effects associated with biofuels co-products was posed, citing nitrogen/ammonia run-off, dairy methane emissions, and transport of DGS as potential issues. • Nitrogen Issue: • Feed experts did not think it would be an issue if nutritionists were doing their job (i.e., properly balanced diets). • There are constraints on nitrogen and phosphorus in animal manure in some regions. • Transport Issue: • As the export market expands, CARB should be mindful of additional emissions from transportation of DGS. However, transportation emissions are typically small inputs to the LCA of a product.
Recommendation on how to treat corn oil as a co-product • EPA’s analysis of corn ethanol for the RFS2 rulemaking assumed that in the timeframe evaluated for that rule corn oil would be extracted in the process, which would then be used as a feedstock for biodiesel or renewable diesel • Should be treated with a displacement method, as corn oil would likely displace soy oil as a feedstock for biodiesel or renewable diesel.
Impact of DGS displacement ratios on carbon intensity • This issue was also brought up at the Oct. 15 EWG meeting. • This issue can readily be evaluated for direct emissions based on modifying inputs to the GREET model. • However, the impact on indirect emissions (i.e., indirect land use change) is much more complicated as numerous GTAP runs would be required. • Unfortunately, the subgroup did not have time to quantify this impact.