The Bioeconomy’s Role in COVID-19 Recovery and Climate Solutions

Rural Communities, Climate, and COVID-19 Recovery
Find out more about the briefings in this series below:
June 16	Implementing Energy Efficiency Programs in Rural America
June 17	The Bioeconomy’s Role in COVID-19 Recovery and Climate Solutions
June 18	Rural Communities Rise to the Challenge of Dual Disasters

The Environmental and Energy Study Institute (EESI) held a series of one-hour online briefings about rural communities, climate change, and COVID-19 recovery. The briefings explored the challenges rural communities face, including high energy costs, a struggling agriculture industry, and low investment in resilient infrastructure, as well as the solutions rural communities have developed in the face of these multiple stressors.

Rural areas have been hard hit by the economic fallout from the COVID-19 crisis. While farms struggle to remain financially solvent, the tremendous benefits of the bioeconomy are at risk. This briefing provided an overview of the health, climate, and economic advantages of bio-based products and the challenges currently facing the industry. Patty Judge, former Iowa Lieutenant Governor and Secretary of Agriculture for Iowa, offered a perspective on the bioeconomy and rural America’s road to recovery from COVID-19. Stefan Unnasch, Managing Director of Lifecycle Associates, discussed the role of biofuels in greenhouse gas reduction strategies and how biofuels can improve air quality compared to fossil alternatives.

HIGHLIGHTS

 

Patty Judge, former Iowa Lieutenant Governor and Secretary of Agriculture for Iowa; founder, Focus on Rural America

• Focus on Rural America is a 501(c)4 organization that conducts research in rural America with the goal of advancing progressive ideas and policies.
• The top issue that people in rural Iowa and rural America are concerned about is job security.
• The biofuels industry has provided good jobs with benefits to rural America, supporting rural towns and economies.
• Rural areas face many economic challenges: farm income is down by almost half of what it was in 2013; it is difficult to attract and retain good jobs; key infrastructure such as hospitals and schools are crumbling. These issues combine to shrink rural communities.
• In 2019 and 2020, rural America, specifically the Midwest, faced three debilitating challenges: trade disputes in 2019, Midwestern flooding in spring 2019, and the EPA’s decision to grant waivers to small gasoline and diesel refineries, freeing them from their obligation to blend ethanol into their gasoline. The waivers reduced demand for ethanol by about four billion gallons.
• In 2020, COVID-19 impacted rural communities, leading to increased rural vulnerability.
• Focus on Rural America has found that many rural communities believe that the government has a responsibility in keeping the biofuel industry strong, and so they support leaders who invest in ethanol.
• Ethanol facilities add monetary value to rural communities, leading to greater economic and social stability. They are a shining example of how to help small, rural towns.
• Focus on Rural America believes the government can help rural America today through three policies: implement the Renewable Fuel Standard (RFS) as written and intended [the RFS mandates the replacement of a certain volume of petroleum-based transportation fuel with renewable fuel], set the RFS Volume Obligations, and end the use of unjust small refinery waivers that reduce the demand for biofuels.

 

Stefan Unnasch, Managing Director of Life Cycle Associates

• Biofuels play an important role in emission reduction strategies for both greenhouse gas emissions as well as conventional air pollutants.
• Biofuels, such as ethanol, renewable diesel, biodiesel, and biogas, burn cleanly with low sulfur and no aromatics (which are a highly toxic component of gasoline used to provide octane). Further, generating biogas can help landfills avoid flaring methane.
• Blending ethanol into gasoline makes for a cleaner fuel—ozone levels decline as ethanol levels increase in gasoline. Currently, we blend 10 percent ethanol into gasoline (E10), but we have the potential under current EPA policy to blend 15 percent ethanol (E15).
• Greenhouse gas emissions from petroleum have grown in recent years as more and more of U.S. oil production has come from oil shale, which is more expensive and complex to produce and refine.
• Corn ethanol greenhouse gas emissions are 50 percent less than petroleum gasoline emissions.
• Low carbon fuel programs—like California’s Low Carbon Fuel Standard (LCFS)—are important because transportation makes up a significant portion of greenhouse gas emissions. A market-based program with a declining standard, like the LCFS, gives fuel producers an incentive to reduce emissions or buy alternative, lower-carbon fuels.
• There are many options for greenhouse gas reductions in rural America, including low-carbon fuels, electric vehicles, manure and waste utilization, no-and low-till farming, and land restoration projects. These programs should be implemented so that some of the revenue flows to the farmers, thereby supporting the rural American economy while reducing carbon emissions.
• Life Cycle Associates suggests bringing back flexible-fuel vehicles [FFVs, which can run on fuel blends of up to 83 percent ethanol/17 percent gasoline], supporting farm-level benefits, enabling innovation, supporting E15, and adding Renewable Identification Number (RIN) pathways for hydrogen and electricity (so that they count as renewable fuels under the Renewable Fuel Standard).

 

Q&A Session:

 

What are the misconceptions held by the public regarding ethanol and biofuels that you find most troubling and want to get corrected?

• Unnasch: One misconception is that ethanol has no criteria pollutant benefits, when, in fact, it does reduce air pollution, as well as greenhouse gas emissions. The other misconception is that corn ethanol is bad. If you look at corn ethanol compared to other biofuels, there is a range of greenhouse gas emission values. But the numbers for reduced GHGs from ethanol have been getting better and better. And corn ethanol plants able to invest in dairy digesters or manure digesters could reduce emissions even further. Corn ethanol is reducing GHG emissions as are other biofuels.
• Judge: One argument we heard over and over during caucus season was the food versus fuel argument: that we are taking food away from American citizens and turning it into fuel instead. People need to understand that 1) the crop we are growing is #2 yellow corn; it is not human food, it is livestock feed, and 2) that, through the process of ethanol production, they extract sugar and turn it into ethanol. This process leaves high quality (high protein) livestock feed as a major co-product so that there is not a great deal of waste. This feed is used by livestock producers all over the world.

 

In one of your slides, you said that in spring of 2019, biofuel production buffered the impact of trade disputes. Could you elaborate on that?

• Judge: Trade disputes were over moving corn and soybeans into international markets. In the corn industry, we rely on moving that product internationally, and, when we have embargoes placed on us, it becomes very difficult. We got caught up in that with biofuels, and we did suffer because of our inability to move ethanol into normal markets.

 

How would you weigh the technical versus the policy constraints that are preventing biofuels from becoming a mainstream fuel?

• Unnasch: The policy opportunities are fantastic. For example, in the case of cellulosic biofuels, the incentive is very generous—maybe too generous. The problem is that the federal government has not stuck with it, but the incentives do work. Incentives need to be persistent enough for investors to believe that they will be around for 10 years.

 

Do you think public health imperatives will help shift dynamics and encourage greater use of biofuels?

• Judge: I hope so. Another argument I heard last winter is that we have a role to play in air pollution. We are on the right track to cut emissions and have a role in doing that in the future.
• Unnasch: I think that the air quality effects are a co-benefit. Producing renewable diesel with zero-sulfur certainly makes it easier to sell. These low-carbon policies are monetizing fuels based on greenhouse gas emissions. Where we really need help is with higher ethanol blends—there should not be obstacles for E15 [15% ethanol fuel blends]. The folks after the perfect solution are enemies of the good. Some say that all vehicles should be electric, but I do not know if we will be able to have larger vehicles be dedicated battery vehicles, so why not have them run on renewable fuel and get down to over 80 percent greenhouse gas reduction?

 

Are there things that you think State Secretaries of Agriculture could do to help the public and policymakers better understand the role, health, environmental, and economic benefits of biofuels?

• Judge: This is a fledgling industry. When I was Secretary of Agriculture, I was amazed at the lack of good information that is available and the lack of knowledge, even here in Iowa where there is so much ethanol production.
• Using the elected offices of Secretary of Agriculture, Members of Congress, and State Legislators is important. I have seen a big change, however. When we first started promoting ethanol, I would challenge the Rotarians to use ethanol in their cars, and they thought it would ruin their cars. So, I told them this story: my father believed that ethanol was a terrible thing and you should never put it in your car. I would take his car and fill it up with ethanol and never tell him. He was happy, the car ran fine, and I was happy. We have come a long way, but the opposition, big oil, would like us to disappear. They are well-funded and vocal, and we have to keep working at spreading the message of renewable fuel and all the benefits it brings.

 

Are there other countries that are on the vanguard of biofuels that we could look to?

• Judge: We have real competition in the ethanol industry, particularly in Brazil and a few other places. Other countries are promoting their fuel, trying to establish good trade policies, and are not spending as much time as we are trying to bat back opponents that are funded by big oil.
• Unnasch: I work a lot on helping export ethanol all over the world. It is maddening, when we have had issues with petroleum supply and pollution, we should be able to use our own indigenous resources. More importantly, laws should allow investors to take the risk. Their problem is supposed to be does the technology work, not is the government going to allow them to invest.

 

What policy options exist to ensure farmers receive at least partial value upfront on CO2 sequestration activities, when, in reality, it takes years to verify CO2 permanence?

• Unnasch: There is a potential source of revenue from low-carbon programs that can fund beneficial activities. It is clear that some practices that reduce carbon emissions take more to monitor, but we should take it as an initial step to pay for the monitoring. This can be sorted out. We can store more carbon in the soil.

 

Have any cities that you know of been on the vanguard of adopting biofuels in their municipal fleets?

• Judge: I am not familiar with what cities are doing. I know that there have been a lot of tests done with biofuels in buses that show that there is a good possibility of reducing emissions by using biofuels. We should be able to use higher blends of ethanol. This would be very beneficial to the environment as we resume driving after COVID-19.
• Unnasch: In California, a lot of bus fleets have requirements to use renewable diesel. I am not sure if they would use ethanol, though. I think that in the Midwest, an E85 FFV [a flex-fuel vehicle that can run on fuel blends of up to 83 percent ethanol/17 percent gasoline] would make a good police car. There are many opportunities for governments to use E85s, and ethanol plants could sell fuel locally.

 

Highlights compiled by Maeve Arthur