Biofuels Policy & Regulatory Issues

1. Applying Greenhouse Gas Emissions Lifecycle Assessment Biofuels Policy & Regulatory Issues Jennifer L. Christensen WISE Intern 2009 August 5, 2009

2. Agenda • Introduction • Renewable Fuels Potential • Legislative History • EISA Lifecycle GGE Criteria • Lifecycle Assessment Methodologies • Lifecycle Assessment Application • EPA Proposed Rule Issues • EPA Recommendations • Federal Government Recommendations

3. Introduction • What is the current global environmental crisis? • Global warming and climate change • What can we do about it? • Reduce Greenhouse Gas Emissions (GGE) • Capitalize on GGE reduction potential in transportation sector • 29% of total U.S. GGE in 2006

4. Renewable Fuels Potential • Current Transportation Fuel: • Gasoline & Diesel • Non-renewable: Fossil Fuel Feedstock • Significant Environmental Impacts • Alternative Transportation Fuel: • Biofuels • Renewable: Biomass Feedstock • Fewer Potential Environmental Impacts

5. Legislative History • Energy Policy Act (EPAct) of 2005 • Created Renewable Fuel Standard (RFS) • Mandated volumes maximizing at 7.5 billion gallons in 2012 • Failed to address sustainability issues regarding increased biofuel production • Energy Independence and Security Act (EISA) of 2007 • Modified RFS program • Increased mandated volumes to 36 billion gallons in 2022 • Addressed sustainability issues • Defined renewable biomass • Defined four biofuel categories depending on lifecycle GGE thresholds

6. EISA Lifecycle GGE Criteria • Lifecycle GGE Baseline: • 2005 average of gasoline and diesel transportation fuels

7. Lifecycle Assessment Methodologies • Developed to assess the environmental impacts of a product or process from “cradle-to-grave” • Included phases: • Primary or direct • Secondary or indirect Source: “Biomass Program,” United States, Department of Energy, Energy Efficiency & Renewable Energy, 2009, 29 July 2009 <http://www1.eere.energy.gov/biomass/>.

8. Lifecycle Assessment Application Goal Definition & Scoping Inventory Analysis Impact Assessment Interpretation • Environmental Protection Agency (EPA) • Applied four steps of lifecycle assessment • Issued proposed rule in May 2009 Source: United States, Environmental Protection Agency, Office of Research and Development, National Risk Management Research Laboratory, Life Cycle Assessment: Principles and Practice, By Scientific Applications International Corporation, May 2006: 4, 29 July 2009 <http://www.epa.gov/ORD/NRMRL/lcaccess/pdfs/600r06060.pdf>.

9. Standardization Issues • General Lifecycle Assessment Standards: • International Organization for Standardization (ISO) • ISO 14040:2006 • Biofuel Specific Lifecycle Assessment Standards: • None; however, • Global Bioenergy Partnership • Roundtable on Sustainable Biofuels • ISO committee for sustainable bioenergy

10. Scoping Issues • Biofuels Pathway: • Mandated inclusion of significant indirect emissions • Indirect land use change • Compared future scenarios in 2022 • Reference Scenario: Business-as-Usual • Control Scenario: EISA 2022 mandate volume • Analyzed marginal impact of increased biofuel production • Petroleum Baseline Pathway: • Mandated 2005 average for gasoline and diesel • Direct emissions, but not indirect emissions • Did not analyze impact of increased biofuel production on petroleum market

11. Equity Issues • Fuel Equity • Inconsistent application of lifecycle assessment methodologies • Trade Equity • American farmer vs. International farmer • Commodity Equity • Inconsistent mandates across commodity markets Source: Zia Haq, personal interview, 24 July 2009.

12. Modeling Issues • Direct Emissions: • Depend on scientific models • Relatively straightforward • Argonne National Laboratory’s GREET model • Indirect Emissions: • Depend on economic, as well as scientific models • Unprecedented need to simulate changes in domestic and international agricultural sector • Utilized a piecemeal approach of preexisting models

13. Federal Government Recommendations • Regarding RFS lifecycle GGE criteria: • Change petroleum baseline from 2005 average to allow for marginal comparison • Streamline other incentive programs to fund second and third generation biofuels • Regarding future policy decisions: • Utilize lifecycle assessment methodologies to make better rounded policy decisions • Request National Academies of Science to conduct report on this utilization

14. EPA Recommendations • Regarding EISA final rule: • Issue a statement addressing equity issue of comparing marginal biofuel impacts to average petroleum impacts • Continue to include indirect emissions in biofuel pathways according to scientific reasoning • Enhance modeling capability to reduce uncertainty • Use scientific judgment on model assumptions • Guard against preconceived policy initiatives to define certain assumptions

15. EPA Recommendations • Regarding future application of lifecycle assessment methodologies: • Partner with national & international stakeholders • Partner with fellow agencies • Department of Energy & U.S. Department of Agriculture • Partner with American National Standards Institute to develop international standards

16. Questions

17. Other Issues: Time Horizon & Discount Method Source: United States, Environmental Protection Agency, Office of Transportation and Air Quality, Assessment and Standards Division, Draft Regulatory Impact Analysis: Changes to Renewable Fuel Standard Program May 2009: 405, 28 July 2009 <http://www.epa.gov/otaq/renewablefuels/420d09001.pdf>.