Learning from the Past: It's Time to Reevaluate the Renewable Fuel Standards

July 29, 2015

The Environmental Protection Agency’s latest Renewable Fuel Standard proposal would require 17.4 billion gallons of biofuel to be blended intro transportation fuel in 2016. Unfortunately, as we explain in a comment filed on EPA’s proposal, this biofuel mandate is bad news for the environment and for American consumers. Given the availability of new information on the impacts of the program, Congress should reevaluate whether the Renewable Fuel Standard is accomplishing what Congress intended.

What is the Renewable Fuel Standard?

The Renewable Fuel Standard (RFS) program requires refiners to blend specific amounts of renewable fuels into transportation fuel, such as gasoline and diesel. The RFS program was created in 2005 to reduce both American dependence on foreign oil and domestic gasoline consumption. To accomplish these goals, EPA’s proposed rule would mandate the production of 17.4 billion gallons of total renewable fuel in 2016, an 850 million gallon increase from the last published standards promulgated for 2013.

While the stated goals of the RFS are to reduce crude oil imports and increase the use of renewable fuels, an implicit purpose of the RFS program is to benefit the environment by moving away from gasoline and diesel, fuels that result in substantial carbon emissions. However, while crude oil imports and gasoline demand have decreased since the RFS was enacted, it is less clear whether the increased production of biofuels has actually reduced emissions or benefitted the environment.

Environmental Harm

Since Congress authorized the RFS program, research has indicated that the production of ethanol and biodiesel may significantly increase emissions, specifically of the greenhouse gases carbon dioxide (CO2) and nitrous oxide (N2O) and criteria pollutants such as particulate matter. While estimates vary, recent research indicates that the environmental effect of the RFS is extremely modest at best and, at worst, could result in a significant increase in CO2 emissions over gasoline. Overall, the post-2007 literature largely reinforces that ethanol production increases emissions and damages wetlands. The two main sources of this environmental harm are land use change and increased use of fertilizers.

First, increased biofuel production causes land use changes (LUC) that result in the release of soil organic carbon. Increased demand for corn and soy provides farmers with an incentive to produce more crop and convert unused lands into cropland, which releases a significant amount of soil organic carbon and foregoes future carbon sequestration and storage.

Second, fertilizer input for the production of crops used to produce biofuels results in emissions of N2O, a greenhouse gas that contributes to climate change. A 2012 analysis found that the necessary fertilizer input for the increased production of corn and rapeseed leads to N2O emissions that matched or exceeded the corresponding cooling achieved by the reduction in CO2 emissions resulting from fossil fuel replacement. But that’s not all: increased fertilizer runoff causes water pollution, damages ecosystems, harms biodiversity, and is contributing to the Gulf of Mexico’s “Dead Zone.”

Unsustainable Trajectory

In addition to the environmental damage outline above, the RFS program is on an unsustainable trajectory. Domestic demand for gasoline has not kept pace with Congress’s and EPA’s expectations when establishing the RFS program. While the authorizing statute requires more ethanol to be blended into transportation fuel each year until 2022, the only way this is possible is if demand for gasoline increases significantly in the near term.  

This is the case because most of the biofuels produced to comply with the RFS are not drop-in fuels, which could act as perfect substitutes for gasoline or diesel. Instead, biofuels such as corn ethanol and biodiesel must be blended into existing fuel stock, and in some cases cannot legally exceed certain concentrations in fuel (for instance, 10% for ethanol, and 5% for biodiesel). In addition to the legal limits, non-flex-fuel vehicles cannot actually use fuel with ethanol concentrations greater than 10%, which is termed the “blendwall.” Paradoxically, without more gasoline/crude oil, it will be difficult—both legally and practically—to increase the use of renewable fuels

Learning from the Past

The availability of new scientific, technical, and economic information shows that the RFS program does not work as it was intended to, and is likely causing significant environmental harm through increased greenhouse gas emissions and damage to waterbodies and ecosystems. Because the RFS program is on an unsustainable trajectory, both practically and environmentally, Congress should reevaluate the statutory volume requirements established in the Energy Independence and Security Act of 2007 and consider other approaches that would be more feasible and better for the environment.

Read the author's Public Interest Comment on EPA's Proposed Renewable Fuel Standards for 2014, 2015, and 2016.