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Faulty Carbon Accounting in Next Generation Fuels Act of 2021 Penalizes Efficient Ethanol Producers

Nearly one year after introducing similar legislation in the 116th Congress, retiring Congresswoman Cheri Bustos (D-Ill. 17th) introduced the “Next Generation Fuels Act of 2021” (H.R. 5089), a bill to address ethanol market barriers and greenhouse gas (GHG) emissions in fuel. The legislation would require high octane fuel, limit aromatics in gas, ensure all blends of ethanol receive the same RVP treatment as E10, and require future vehicles and retail fuel stations to be compatible with higher ethanol blends.

“While this legislation checks much off the ethanol industry wish list, like the previous version, its inadequate approach to carbon accounting would undermine many ACE-member plants and other U.S. dry mill producers who have made investments to reduce the carbon intensity of their ethanol,” said Brian Jennings, American Coalition for Ethanol (ACE) CEO. “The Biden administration and most Members of Congress are focused on how to reach net-zero emissions in the transportation sector by mid-century. Since ethanol is the only transportation fuel that can achieve both net-zero and net-negative emissions, we should push for technology-neutral policy that holds all fuel producers accountable for their individual carbon footprints. This will ensure a growing market for low carbon ethanol in the future despite the hysteria surrounding electric vehicles.”

The Next Generation Fuels Act contains a new “low carbon” octane standard which requires high octane fuel to be produced from sources with average lifecycle GHG emissions at least 40 percent cleaner than gasoline. Because every ethanol facility has its own unique carbon intensity (CI), the legislation’s use of “average” on pages 29-31 of the bill text to determine the lifecycle GHG emissions of ethanol shortchanges many producers.

“Under this legislation, ethanol from a coal-fired ADM facility, whose fuel is nearly as carbon-intensive as gasoline, would get the same access to the market as the most efficient farmer-owned ethanol facility, whose carbon footprint is at least 50 percent cleaner than gasoline, and in most cases 60 to 70 percent cleaner,” Jennings explained. “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 companies like Poet, KAAPA, Little Sioux Corn Processors, Ringneck Energy and dozens like them that have invested in technology innovations to reduce the CI of their fuel.”

“While I share the frustration of people in the corn and ethanol sectors that some in Congress and the Biden administration seem to dismiss the role ethanol can play in reducing GHG emissions, maybe it’s partly because we are unwilling to take responsibility for our carbon footprint and instead choose to celebrate this legislation as a serious decarbonization effort when it is not,” Jennings added. “We cannot pay lip service to net-zero emissions by 2050 and simultaneously expect Congress to give us year-round access for E15 or require E30 compatibility from automakers.”

“If this legislation were improved to allow individual CI scores for ethanol producers and give credit to farmers for practices that reduce emissions from fertilizer use and sequester carbon in the soil, not only would ACE enthusiastically support it, but it would be taken more seriously in Congress,” Jennings said.

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