Indirect Land Use Change and U.S. Renewable Fuels Standard

By Mark Ellis

Recent articles in Science and other publications have indicated that the greenhouse gas (GHG) emissions from indirect land use changes (ILUC) from U.S. biofuels production may exceed those resulting from direct land use change (DLUC). This effect is hypothesized to occur when existing cropland is converted from producing fuel to producing food, which then increased food prices and drives land use change in other areas of the globe to compensate for lost food and feed supply. Moreover the U.S. Energy Independence and Security Act has recently been amended to require the inclusion of ILUC in life-cycle analysis of GHG emissions associated with U.S. biofuel production. Yet the science to justify the inclusion of ILUC and measure its impact is immature and the issue is laden with high levels of uncertainty. Camps on both sides of the argument are lobbying intensely on this issue as the U.S. Environmental Protection Agency considers revisions to the U.S. Renewable Fuels Standard. This investigative review examines the issue of ILUC resulting from U.S. biofuels production and whether future U.S. biofuel policy should in fact require its inclusion.


Introduction

The use of biofuels to substitute traditional petroleum-based fuels and other energy sources has received increasing attention of late as a means to meet our energy demands while simultaneously reducing our carbon footprint and dependence on foreign energy sources. However, when one accounts for land use and land use change (LULUC) associated with growing biofuels or bioenergy crops, it raises serious questions as to the outright greenhouse gas (GHG) reduction benefits implied in the above claims. Whether used for first- or second-generation biofuels, the latter of which are traditionally less land intensive (yet not viable on a commercial scale in significant quantities), growing crops such as corn, soybean, sugar cane, switchgrass, and others often requires the clearing and/or conversion of land for crop planting. With the exception of marginal or abandoned croplands, direct land use change (DLUC) results in an initial net loss of sequestered carbon in the form of both aboveground (plants) or belowground (roots, soil) biomass when crops are planted in place of existing land cover (Fargione et al, 2008). In addition do DLUC, an increasingly intense debate in the biofuels industry now centers on indirect land use changes (ILUC) affiliated with biofuels crop growth.

Opinions vary widely on whether “displacing food and feed crops with energy crops on existing land in one place causes an expansion of crop production into precious forest and scrubland elsewhere — in order to compensate for the lost food and feed supply” (Zeller, 2009). As such, the purpose of this investigative review is to determine the significance of ILUC in the U.S. production of biofuels and the potential impacts of its inclusion in future U.S. policy via pending revisions to U.S. Renewable Fuels Standards (RFS). While there are many other important factors associated with LULUC apart from GHG emissions, such as net energy benefits, they are considered out of the scope of this investigative review.

Background

A recent study of nine commercially viable biofuel production scenarios estimated the accumulated carbon debt and payback time resulting from DLUC specifically associated with biofuels production. Payback time was defined as the “number of years after conversion to biofuel production required for cumulative biofuel GHG reductions, relative to the fossil fuels they displace, to repay the biofuel carbon debt” (Fargione et al., 2008). Yet it should such GHG analyses are highly dependent on a combination of estimates and assumptions. It is thus doubtful that current models provide reliable estimates of emissions resulting from biofuel-related land-use changes (Kammen et al. 2007). Nonetheless, this report reiterated the importance of LULUC scenarios in the context of biofuels GHG life-cycle accounting.

Based on global land-use data incorporated into the GREET model used by the U.S. Department of Energy (DOE) and Environmental Protection Agency (EPA) to measure life-cycle GHG emissions for bio- and petroleum-based fuels, a subsequent study proposed that “farmers [diverting] existing crops or croplands into biofuels…causes similar emissions indirectly” (Searchinger et al., 2008). A scathing article in Time magazine delineated how this occurs through the following adverse chain reaction:

“U.S. farmers are selling one-fifth of their corn to ethanol production, so U.S. soybean farmers are switching to corn, so Brazilian soybean farmers are expanding into cattle pastures, so Brazilian cattlemen are displaced to the Amazon. It’s the remorseless economics of commodities markets. ‘The price of soybeans goes up,’ laments Sandro Menezes, a biologist with Conservation International in Brazil, ‘and the forest comes down.’” (Grundwald, 2008).

Should ILUC be as significant as the above assertions imply, the negative impacts of carbon debt could be much higher than previously accounted for. Some even claim that the ILUC effects may even exceed those of DLUC (Kammen, D., et al., 2007). Congress recently amended the U.S. Energy Independence and Security Act (EISA) to include ILUC in analyzing biofuels and their effect on emissions of climate-changing greenhouse gases (Zeller, 2009).

A heated dialogue rapidly ensued between biofuel proponents and critics. In Congressional testimony, the former claim that no reliable methods exist to measure “highly speculative” ILUC data and that “[t]here are no empirical data or proven methodologies that can positively link land conversions halfway around the world to a farmer’s decision here in the United States” (Cooper, G., 2009). The latter insist that ILUC should be incorporated into renewable energy policies as a precautionary measure. The inclusion of ILUC, proponents argue, will not necessarily reduce domestic capacity to meet RFS compliance, but rather “improve the ability of investors and developers to distinguish promising approaches from dead ends and drive investments and innovation towards these feedstocks and technologies” (EDF, et al., 2008). Such feedstocks could be non-food crops such as switchgrass grown on marginal or abandoned farmland, which incur little to no carbon debt (Fargione, et al., 2008).

Hypothetical Scenario

One proposal for approximating the GHG life-cycle impact of ILUC through conversion of cropland to biofuels is based on a “risk adder” concept. The risk adder is “defined from the global average share of area in utilization for producing agro products for export purpose and the land use change given in the corresponding regions” and is given a carbon intensity of 4 tonnes of CO2-eq emitted per hectare biofuel land area per year (Fehrenbach, H., et al., 2008). As with Fargione et al., carbon-intensity calculations are several different biofuel crops grown in numerous regions. Since this review is solely focused on U.S. biofuels ILUC policy, I will examine the impact of ILUC for the two predominant, commercialized U.S. biofuels: corn ethanol and soybean biodiesel.

Based on the risk adder defined above, the author’s DLUC, ILUC, and total carbon intensities allocated to North American maize and soybean biofuels production are shown in Table 1. Also shown in Table 1 are the proportions of each LUC type toward total life-cycle GHG emissions in this hypothetical scenario.

table_for_ir2

For both DLUC and ILUC, land use changes for U.S. soybean biodiesel are proportionately nearly double those of corn ethanol.

In 2007, the U.S. produced 6,500 million gallons of corn ethanol and 450 million gallons of soybean biodiesel (Salassi, M., 2009). Ethanol (high-heating value) stores approximately 89 MJ per gallon. Diesel energy content is approximately 130.6 MJ per gallon (ORNL biodiesel). Incorporating the emission figures above, this amounts to a total U.S. ILUC GHG life-cycle emissions of 9.49 billion kg of C02-eq from corn ethanol and 4.65 billion kg of CO2-eq from soybean biodiesel. While the relative carbon intensity of ILUC for soy biodiesel is significantly higher than that of corn ethanol, cumulative ILUC GHG emission contributions are approximately half that of corn ethanol due to the smaller scale of commercial production.

Discussion and Conclusion

ILUC will remain a heated issue until non-food based second-generation biofuels reach commercial production. The methods for measuring ILUC effects are very premature. Implicit in our current inability to measure the true effects of ILUC from soy biodiesel and corn ethanol production is an exceptionally high level of uncertainty. While I do believe that ILUC does occur through increased crop prices when agricultural land is converted to support biofuel crop production, to what precise extent is unknown. However, even including ILUC, based on the above “risk adder” scenario both types of fuels still have lower carbon intensities than their fossil equivalents, with the exception of corn ethanol contributing to 75% or greater forest removal proportion via ILUC (Fritsche, U., et al., 2008). As seen in Table 1, GHG life-cycle emissions are moderately sensitive to its magnitude. Hence small arbitrary changes to the risk adder estimate could adversely affect the cost-benefit viability of a biofuel if set too high without proof.

Another complicating factor is the economic motivation of those cited in numerous accounts of ILUC via Brazilian rainforest deforestation induced by higher soybean prices. Ruth Scotti of BP highlighted the fact that most of those responsible for deforestation in Brazil are very poor individuals. In turn, even if U.S. biofuel crop growth did lead to ILUC in Brazil and was summarily halted, those same individuals would likely continue deforestation (perhaps illegally) to generate income via other means (e.g., timber sales). Moreover, imposing a premature policy to account for ILUC in a renewable fuels standard might not ultimately address the main goal, which is to reduce GHG emissions from deforestation in Brazil or elsewhere, regardless of the driver (Scotti, 2009). Most NGOs sidestep the uncertainty argument by relying on a precautionary principal to account for ILUC just in case it has adverse GHG impacts. However, if U.S. biofuel production is unduly compromised by ILUC adjustments, the switch from fossil fuels to biofuels may slow as the gains may be lessened and skepticism increased, ultimately resulting in a net GHG emissions increase greater than that attributed to ILUC (Scotti, 2009).

In conclusion—despite being a strong advocate for minimizing the carbon intensity of our economy— the U.S. EPA would be premature in requiring that ILUC be included as part of the GHG life-cycle assessment requirement under the pending RFS. Without consensus on measurement techniques, at this point in time it is neither possible nor prudent to include such data in the GHG life-cycle assessment. Their efforts should instead turn to a rigorous initiative to more conclusively define and measure the impacts of ILUC linked to U.S. biofuels production.

References

Cooper, G. 2009. Hearing on low carbon fuels standard. Testimony to Committee on Transportation and Housing—California State Senate on behalf of Renewable Fuels Association. March 16, 2009

Environmental Defense Fund (EDF), et al. 2008. Letter to Stephen Johnson, Administrator of U.S. Environmental Protection Agency. November 10, 2008.

Fargione, J., et al. 2008. Land clearing and the biofuel carbon debt. Science. 319 (1235-1237). February 29, 2008.

Fehrenbach, H., et al. 2008. Greenhouse gas balances for biomass: issues for further discussion. Issue paper for Informal Workshop on Sustainable Biofuels, on behalf of German Federal Environment Agency. January 25, 2008.

Fritsche, U., et al. 2008. Beyond the German BSO: scope of further work on land-use related GHG. Presented at the Informal Workshop on Sustainable Biofuels. January 25, 2008.

Oak Ridge National Laboratory (ORNL). “Bioenergy Conversion Factors”:
http://bioenergy.ornl.gov/papers/misc/energy_conv.html. (Last accessed on April 9, 2009).

Kammen, D., et al. 2007. Energy and greenhouse impacts of biofuels: a framework for analysis. Joint Transportation Research Center—Discussion Paper No. 2007-2. OECD/International Transport Forum. December, 2007.

Salassi, M. 2009. Fact sheet: current status of U.S. biofuels industry and opportunities for Louisiana agriculture. Louisiana State University Agricultural Research and Extension Center. January 2009.

Scotti, R. 2009. Videoconference on April 7, 2009 for Strategy 738 course, University of Michigan, Stephen M. Ross School of Business.

Searchinger, T., et al. 2008. Use of U.S. biofuels increases greenhouse gases through emissions from land-use change. Science. 319 (1238-1240). February 29, 2008.

Zeller, T. 2009. “The Biofuel Debate: Good, Bad or Too Soon to Tell?”:
http://greeninc.blogs.nytimes.com/2008/11/03/the-biofuel-debate-good-bad-or-too-soon-to-tell/. November 3, 2008. (Last accessed April 8, 2009).

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