Next Generation Fuels Act of 2020 Includes Key Priorities, But Carbon Accounting Approach Undermines Many ACE Members
Posted on 09/24/2020
Today, as the 116th session of Congress nears completion, Congresswoman Cheri Bustos (D-Ill. 17th) introduced the “Next Generation Fuels Act of 2020,” legislation intended to remove regulatory barriers to higher blends of ethanol and reduce greenhouse gas (GHG) emissions in fuel. The bill would support high octane fuel, limit aromatics in gasoline, ensure all blends above 10 percent ethanol receive the same RVP treatment as E10, and require future vehicles and retail fuel stations to be compatible with E30, among other things. The American Coalition for Ethanol (ACE) was one of many organizations that worked on the legislation with the congresswoman’s office.
“We appreciate Congresswoman Bustos has introduced legislation designed to remove barriers to higher blends of ethanol and which acknowledges future policy needs to be considered in the framework of GHG emissions,” said Brian Jennings, ACE CEO. “While this legislation contains many of our top priorities, its approach to carbon accounting is flawed and undermines the investment many ACE members have made to reduce their carbon intensity.”
The legislation includes a new clean octane standard which limits aromatic compounds in gasoline and requires octane to be produced from clean sources, defined as fuel with average lifecycle GHG emissions at least 30 percent less than gasoline. The bill’s definition of industry “average” to determine the lifecycle GHG emissions of ethanol, also known as carbon intensity (CI), shortchanges many producers as Jennings explains below:
“Under this legislation, ethanol from a coal-fired ADM facility, whose fuel is similar to the CI of gasoline, would get the same access to the new octane market as the most efficient farmer-owned ethanol facility, whose carbon footprint is at least 50 percent cleaner than gasoline. In other words, the bill as currently drafted would perversely reward ADM for doing nothing to reduce the CI of the fuel produced in its coal-fired facilities and penalize many ACE-member companies that have invested millions of dollars to install technology to reduce the CI of their fuel. We do not believe there is a good rationale for a carbon policy which treats ethanol with a CI that is hardly indistinguishable from gasoline the same as ethanol from a facility that is 50 percent cleaner than gasoline.
“ACE prefers a low carbon fuel policy which assigns each fuel producer an individual carbon intensity score and measures lifecycle GHG emissions to provide credit for farming practices that reduce emissions from fertilizer use and sequester carbon in the soil. Policy with these two components would reward farmers for climate-smart practices and ethanol facilities for making investments to reduce GHG emissions.
“We appreciate Congresswoman Bustos’ leadership on our priority issues, and when the 117th session of Congress convenes, we will work with her and others to expand market access for higher ethanol blends in a way that rewards farmers and individual ethanol facilities while helping address climate change.”