Alternative U.S. biofuel mandates and global GHG emissions: The role of land use change,crop management and yield growth

We investigate the impacts of the U.S. renewable fuel standard (RFS2) and several alternative biofuel policy designs on global GHG emissions from land use change and agriculture over the 2010–2030 horizon. Analysis of the scenarios relies on GLOBIOM, a global, multi-sectoral economic model based on a detailed representation of land use. Our results reveal that RFS2 would substantially increase the portion of agricultural land needed for biofuel feedstock production. U.S. exports of most agricultural products would decrease as long as the biofuel target would increase leading to higher land conversion and nitrogen use globally. In fact, higher levels of the mandate mean lower net emissions within the U.S. but when the emissions from the rest of the world are considered, the US biofuel policy results in almost no change on GHG emissions for the RFS2 level and higher global GHG emissions for higher levels of the mandate or higher share of conventional corn-ethanol in the mandate. Finally, we show that if the projected crop productivity would be lower globally, the imbalance between domestic U.S. GHG savings and additional GHG emissions in the rest of the world would increase, thus deteriorating the net global impact of U.S. biofuel policies.     

Lifecycle economic analysis of biofuels: Accounting for economic substitution in policy assessment

This paper develops a lifecycle economic analysis (LCEA) model that integrates endogenous input substitution into the standard lifecycle analysis (LCA) of biofuel that typically assumes fixed-proportions production. We use the LCEA model to examine impacts of a pure carbon tax and a revenue-neutral tax-subsidy policy on lifecycle greenhouse gas emissions from cellulosic ethanol using forest residues as feedstock in Washington State. In a model allowing for input substitution in the cellulosic ethanol feedstock, conversion, and transportation process, we consider energy source substitution (woody biomass for coal in the cellulosic ethanol conversion plant and biodiesel for diesel in feedstock production and feedstock and ethanol transportation) as well as substitution of capital and labor for energy in all stages of the lifecycle. We find that ignoring endogenous input substitution by using standard LCA leads to substantial underestimation of the impact of carbon tax policies on carbon emissions. Both tax policies can substantially reduce carbon emissions by inducing substitution among inputs. The revenue-neutral tax-subsidy policy reduces emissions more effectively than the carbon tax policy for carbon tax rates currently in place throughout most of the world. It stimulates substitution of woody biomass for coal and biodiesel for diesel at much lower tax rates when accompanied by corresponding subsidies for reduced emissions from renewable sources.     

Greenhouse gas impacts of ethanol from Iowa corn: Life cycle assessment versus system wide approach

Life cycle assessment (LCA) is the standard approach used to evaluate the greenhouse gas (GHG) benefits of biofuels. However, the need for the appropriate use of LCA in policy contexts is highlighted by recent findings that corn-based ethanol may actually increase GHG emissions. This is in contrary to most existing LCA results. LCA estimates can vary across studies due to heterogeneities in inputs and production technology. Whether marginal or average impacts are considered can matter as well. Most important of all, LCA is product-centered. The determination of the impact of biofuels expansion requires a system wide approach (SWA) that accounts for impacts on all affected products and processes.This paper presents both LCA and SWA for ethanol based on Iowa corn. LCA was conducted in several different ways. Growing corn in rotation with soybean generates 35% less GHG emissions than growing corn after corn. Based on average corn production, ethanol's GHG benefits were lower in 2007 than in 2006 because of an increase in continuous corn in 2007. When only additional corn was considered, ethanol emitted about 22% less GHGs than gasoline. SWA was applied to two simple cases. Using 2006 as a baseline and 2007 as a scenario, corn ethanol's benefits were about 20% of the emissions of gasoline. If geographical limits are expanded beyond Iowa, then corn ethanol could generate more GHG emissions than gasoline. These results highlight the importance of boundary definition for both LCA and SWA.     

Biofuels and their potential to aid the UK towards achieving emissions reduction policy targets

The potential of biofuels contributing to the UK emission reduction targets in the formulated UK Low Carbon Transition Plan (LCTP) and the UK’s obligation in the wider EU emissions reduction targets are assessed using four scenarios. The scenarios were evaluated using hybrid lifecycle assessment developed in a multi-regional input–output (MRIO) framework. In the hybrid MRIO LCA framework, technology-specific processes in the biofuels and fossil fuels LCA systems are integrated into a generalised 2-region (UK and Rest of the World) environmental-economic input–output framework in order to account for economy-wide indirect GHG emissions in the biofuels and fossil fuels LCA systems in addition to other indirect impacts such as indirect land use change. The lifecycle greenhouse gas emissions of biodiesel (soybean, palm, rape, waste cooking oil) and bio-ethanol (sugarcane, sugarbeet, corn) were assessed and compared to fossil fuel (diesel and petrol) baseline. From one of the scenarios, biodiesel production from waste cooking oil and bioethanol from sugarbeet offer the biggest potential for emissions savings relative to fossil fuel equivalent and offering a maximum emission savings of 4.1% observed with a biofuel market share of 10% reached in 2020. It was also established that under current biofuel feedstock mix, to achieve the 6% emissions saving primarily from biofuels as proposed in the LCTP, 23.8% of the transport fuels market would be required to be held by biofuels by 2020.     

Indirect fuel use change (IFUC) and the lifecycle environmental impact of biofuel policies

A common assumption in lifecycle assessment (LCA) based estimates of greenhouse gas (GHG) benefits (or costs) of renewable fuel such as biofuel is that it simply replaces an energy-equivalent amount of fossil fuel and that total fuel consumption remains unchanged. However, the adoption of renewable fuels will affect the price of fuel and therefore affect total fuel consumption which, may increase or decrease depending on the policy regime and market conditions. Using a representative two-region model of the global oil market in which, one region implements a domestic biofuel mandate and the other does not, we show that the net change in global fuel consumption due to the policy, which we term indirect fuel use change (IFUC), can have a significant impact on the net GHG emissions associated with biofuel. If LCA-based regulations are designed to account for indirect emissions such as indirect land use change, then we argue that IFUC emissions cannot be ignored. Our work also shows how different policies can affect the environmental impact from adopting a given clean technology differently.     

The impact of oil prices on bioenergy,emissions and land use

We evaluate how alternative future oil prices will influence the penetration of biofuels, energy production, greenhouse gas (GHG) emissions, land use and other outcomes. Our analysis employs a global economy wide model and simulates alternative oil prices out to 2050 with and without a price on GHG emissions. In one case considered, based on estimates of available resources, technological progress and energy demand, the reference oil price rises to $124 by 2050. Other cases separately consider constant reference oil prices of $50, $75 and $100, which are targeted by adjusting the quantity of oil resources. In our simulations, higher oil prices lead to more biofuel production, more land being used for bioenergy crops, and fewer GHG emissions. Reducing oil resources to simulate higher oil prices has a strong income effect, so decreased food demand under higher oil prices results in an increase in land allocated to natural forests. We also find that introducing a carbon price reduces the differences in oil use and GHG emissions across oil price cases.     

Micro-economic modelling of biofuel system in France to determine tax exemption policy under uncertainty

Liquid biofuel support program launched in 1993 in France is implemented through tax exemptions to biofuels produced by agro-industrial chains. Activity levels are fixed by decree and allocated by the government to the different chains. Based on earmarked budget increase voted in the parliament, total quantity of biofuels will be increased by 50% in the horizon 2002–2003. A micro-economic biofuel activity model containing a detailed agricultural sector component, that is represented by 700 farms, is used to estimate costs and surpluses generated by the activity at the national level as well as tax exemption levels. Furthermore, Monte Carlo simulation has been used to search for efficient tax exemptions policies in an uncertain environment, where biofuel profitability is significantly affected by petroleum price and soja cake prices. Results suggest that, for the most efficient units both at the industry level (large size biomass conversion units) and at the agricultural sector level (most productive farms), unitary tax exemptions could be decreased by 10–20% for both biofuels, ethyl ether and methyl ester, with no risk for the viability of any existing chain.     

How policies affect international biofuel price linkages

We estimate the role of biofuel policies in determining which country is the price leader in world biofuel markets using a cointegration analysis and a Vector Error Correction (VEC) model. Weekly prices are analyzed for the EU, US, and Brazilian ethanol and biodiesel markets in the 2002–2010 and 2005–2010 time periods, respectively. The US blender's tax credit and Brazil's consumer tax exemption are found to play a role in determining the ethanol prices in other countries. For biodiesel, our results demonstrate that EU policies – the consumer tax exemption and blending target – tend to determine the world biodiesel price.     

How much hope should we have for biofuels?

This paper revisits the recent developments in biofuel markets and their economic, social and environmental impacts. Several countries have introduced mandates and targets for biofuel expansion. Production, international trade and investment have increased sharply in the last few years. However, some analysts linked biofuels to the 2007-2008 global food crisis. Existing studies diverge on the magnitude of the projected long-term impacts of biofuels on food prices and supply, with studies that model only the agricultural sector showing higher impacts and studies that model the entire economy showing relatively lower impacts. In terms of climate change mitigation, biofuels reduces GHG emissions only if GHG emissions related to land-use change are avoided. When biofuel production entails conversion of forest to cropland, net reduction of GHG would not be realized for many years. Existing literature does not favor the diversion of food for large-scale biofuels production, but the regulated expansion of biofuels in countries with surplus lands and a strong biofuel industry cannot be ruled out. Developments in non-food based or cellulosic (or second generation) biofuels may offer some hope, yet they still compete with food supply through land use and are currently constrained by a number of technical and economic barriers.     

Imported palm oil for biofuels in the EU: Profitability,greenhouse gas emissions and social welfare effects

We examine the social desirability of renewable diesel production from imported palm oil in the EU when greenhouse gas emissions are taken into account. Using a partial market equilibrium model, we also study the sectoral social welfare effects of a biofuel policy consisting of a blend mandate in a small EU country (Finland), when palm oil based diesel is used to meet the mandated quota for biofuels. We develop a market equilibrium model for three cases: i) no biofuel policy, ii) biofuel policy consisting of socially optimal emission-based biofuel tax credit and iii) actual EU biofuel policy. Our results for the EU biofuel market, Southeast Asia and Finland show very little evidence that a large scale use of imported palm oil in diesel production in the EU can be justified by lower greenhouse gas emission costs. Cuts in emission costs may justify extensive production only if low or negative land-use change emissions result from oil palm cultivation and if the estimated per unit social costs of emissions are high. In contrast, the actual biofuel policies in the EU encourage the production of palm oil based diesel. Our results indicate that the sectoral social welfare effects of the actual biofuel policy in Finland may be negative and that if emissions decrease under actual biofuel policy, the emission abatement costs can be high regardless of the land use change emissions.     

Sub-surface soil carbon changes affects biofuel greenhouse gas emissions

Changes in direct soil organic carbon (SOC) can have a major impact on overall greenhouse gas (GHG) emissions from biofuels when using life-cycle assessment (LCA). Estimated changes in SOC, when accounted for in an LCA, are typically derived from near-surface soil depths (<30 cm). Changes in sub-surface soil depths (>30 cm) could have a large positive or negative impact on overall GHG emissions from biofuels that are not always accounted for. Here, we evaluate how sub-surface SOC changes impact biofuel GHG emissions for corn (Zea mays L.) grain, corn stover, and switchgrass (Panicum virgatum L.) using the (Greenhouse Gases, Regulated Emissions, and Energy Use in the Transportation) GREET model. Biofuel GHG emissions showed as much as a 154% difference between using near-surface SOC stocks changes only or when accounting for both near- and sub-surface SOC stock changes. Differences in GHG emissions highlight the importance of accounting for sub-surface SOC changes especially in bioenergy cropping systems with potential for soil C storage to deeper soil depths.     

The complexity and challenges of determining GHG (greenhouse gas) emissions from grid electricity consumption and conservation in LCA (life cycle assessment) – A methodological review

The way in which GHG (greenhouse gas) emissions associated with grid electricity consumption is handled in different LCA (life cycle assessment) studies, varies significantly. Apart from differences in actual research questions, methodological choices and data set selection have a significant impact on the outcomes. These inconsistencies result in difficulties to compare the findings of various LCA studies. This review paper explores the issue from a methodological point of view. The perspectives of ALCA (attributional life cycle assessment) and CLCA (consequential life cycle assessment) are reflected. Finally, the paper summarizes the key issues and provides suggestions on the way forward. The major challenge related to both of the LCA categories is to determine the GHG emissions of the power production technologies under consideration. Furthermore, the specific challenge in ALCA is to determine the appropriate electricity production mix, and in CLCA, to identify the marginal technologies affected and related consequences. Significant uncertainties are involved, particularly in future-related LCAs, and these should not be ignored. Harmonization of the methods and data sets for various purposes is suggested, acknowledging that selections might be subjective.     

Climate policy: Bucket or drainer?

Worldwide, industry is responsible for about 40% of greenhouse gas (GHG) emissions, making it an important target for climate policy. Energy-intensive industries may be particularly vulnerable to higher energy costs caused by climate policy. If companies cannot offset rising energy costs and would face increased competition from countries without climate policy, they may decide to relocate their industrial production to the countries without climate policy. The resulting net effect of climate policy on GHG emissions in foreign countries is typically referred to as “carbon leakage”. Carbon leakage may lead to higher global GHG emissions due to the use of less advanced technology in less developed countries. Based on a literature review of climate policy, earlier environmental policy and analyses of historical trends, this paper assesses the carbon leakage effects of climate policy for energy-intensive industries. Reviews of past trends in production location of energy-intensive industries show an increased global production share of Non-Annex 1 countries. However, from empirical analyses we conclude that the trend is primarily driven by regional demand growth. In contrast, climate policy models show a strong carbon leakage. Even though future climate policy may have a more profound impact than environmental policies in the past, the modelling results are doubtful. Leakage generally seems to be overestimated in current models, especially as potential positive spillovers are often not included in the models. The ambiguity of the empirical analyses and the modelling results warrants further research in the importance of production factors for relocation.     

Life cycle greenhouse gas emissions impacts of the adoption of the EU Directive on biofuels in Spain. Effect of the import of raw materials and land use changes

The objective of this paper is to evaluate the greenhouse gas (GHG) emissions impacts of the use of different alternative biofuels in passenger vehicles in Spain in order to meet EU biofuel goals. Different crop production alternatives are analysed, including the possible import of some raw materials. Availability of land for national production of the raw materials is analysed and indirect land use changes and associated GHG emissions are quantified.There are important differences in GHG emissions of biofuels depending on the raw material used and whether this is domestically produced or imported. Ethanol production using imported cereals and FAME production using domestic rapeseed have the highest GHG emissions per kilometre driven. Fatty acid methyl ester (FAME) production from sunflower has shown the lowest emissions. When taking into account the results of GHG emissions savings per hectare, these findings are somehow reversed. Production of ethanol and around 12% of FAME can be done domestically. The rest will need to be imported and will cause indirect land use change (ILUC). Therefore, ethanol production will not displace any land, whereas FAME production will displace some amounts of land. Calculated ILUC factors are 29%-34%. The additional GHG emissions due to these indirect land use changes are significant (67%-344% of life cycle GHG emissions).Standalone, the EU biofuel targets can have important benefits for Spain in terms of global warming emissions avoided. However, when considering the impact of land use change effects, these benefits are significantly reduced and can even be negative.     

Applying life-cycle assessment to low carbon fuel standards—How allocation choices influence carbon intensity for renewable transportation fuels

The Energy Independence and Security Act (EISA) of 2007 requires life-cycle assessment (LCA) for quantifying greenhouse gas emissions (GHGs) from expanded U.S. biofuel production. To qualify under the Renewable Fuel Standard, cellulosic ethanol and new corn ethanol must demonstrate 60% and 20% lower emissions than petroleum fuels, respectively. A combined corn-grain and corn-stover ethanol system could potentially satisfy a major portion of renewable fuel production goals. This work examines multiple LCA allocation procedures for a hypothetical system producing ethanol from both corn grain and corn stover. Allocation choice is known to strongly influence GHG emission results for corn-ethanol. Stover-derived ethanol production further complicates allocation practices because additional products result from the same corn production system. This study measures the carbon intensity of ethanol fuels against EISA limits using multiple allocation approaches. Allocation decisions are shown to be paramount. Under varying approaches, carbon intensity for corn ethanol was 36–79% that of gasoline, while carbon intensity for stover-derived ethanol was −10% to 44% that of gasoline. Producing corn-stover ethanol dramatically reduced carbon intensity for corn-grain ethanol, because substantially more ethanol is produced with only minor increases in emissions. Regulatory considerations for applying LCA are discussed.     

Incorporating uncertainty analysis into life cycle estimates of greenhouse gas emissions from biomass production

Before further investments are made in utilizing biomass as a source of renewable energy, both policy makers and the energy industry need estimates of the net greenhouse gas (GHG) reductions expected from substituting biobased fuels for fossil fuels. Such GHG reductions depend greatly on how the biomass is cultivated, transported, processed, and converted into fuel or electricity. Any policy aiming to reduce GHGs with biomass-based energy must account for uncertainties in emissions at each stage of production, or else it risks yielding marginal reductions, if any, while potentially imposing great costs.This paper provides a framework for incorporating uncertainty analysis specifically into estimates of the life cycle GHG emissions from the production of biomass. We outline the sources of uncertainty, discuss the implications of uncertainty and variability on the limits of life cycle assessment (LCA) models, and provide a guide for practitioners to best practices in modeling these uncertainties. The suite of techniques described herein can be used to improve the understanding and the representation of the uncertainties associated with emissions estimates, thus enabling improved decision making with respect to the use of biomass for energy and fuel production.     

Insights into biofuel development in Burkina Faso: Potential and strategies for sustainable energy policies

In many African countries, the upswing in oil prices is one factor that favours the adoption and implementation of a national biofuel policy. This trend has a major impact on state budgets and domestic trade balances, while also limiting the access of rural inhabitants to modern energy services. Contribution of biofuels in stabilizing the energy sector, influences ongoing negotiations on the global dynamics of climate change, the reduction in greenhouse gas (GHG) emissions and sustainable development. The question of biofuels as an alternative energy thus depends on international, national and local considerations. Biofuels represent opportunities, e.g., energy independence and security, new national income and employment sources, as well as potential food security problems. African policy makers therefore need to make the right choices to guide the development of biofuel production and use.This article aims to support the development of a biofuel policy by reviewing the latest technical, economic, environmental and social knowledge so as to be able to evaluate the potential and limits of biofuels in Burkina Faso.     

Greenhouse gas reporting for biofuels: A comparison between the RED,RTFO and PAS2050 methodologies

Biofuels have been identified as a potential short-term solution for reducing greenhouse gas (GHG) emissions from road transport. Currently, ‘1st generation’ biofuels are produced from food crops, but there are concerns with the indirect effects of utilising edible crops for fuel. There is increased interest in producing ‘2nd generation’ biofuels from woody crops and straw, as these can be grown on lower grade land or do not compete directly with food. In order to ensure that biofuels actually deliver emission savings, the overall GHG balance of producing them must be calculated accurately, and compared with conventional fossil fuels. The GHG balance can vary significantly however, depending on biomass type, the production processes, the indirect effects, and also by the method by which the GHG emission balance is calculated. Currently, in the UK, there are three main GHG methodologies that potentially affect biofuel producers. Each has a different approach to measure GHG emissions from biofuel production, and each provides a different result, causing difficulties for policy makers. This study performs a partial life cycle assessment for bioethanol production from wheat grain and wheat straw to demonstrate the variability of the results between methodologies.     

Comparison of the technical potential for hydrogen,battery electric,and conventional light-duty vehicles to reduce greenhouse gas emissions and petroleum consumption in the United States

Light-duty vehicles (LDV) are responsible for a large fraction of petroleum use and are a significant source of greenhouse gas (GHG) emissions in the United States. Improving conventional gasoline-powered vehicle efficiency can reduce petroleum demand, however efficiency alone cannot reach deep GHG reduction targets, such as 80% below the 1990 LDV GHG emissions level. Because the cost and availability of low-GHG fuels will impose limits on their use, significant reductions in GHG emissions will require combinations of fuel and vehicle technologies that both increase efficiency and reduce the emissions from fuel production and use. This paper examines bounding cases for the adoption of individual technologies and then explores combinations of advanced vehicle and fuel technologies. Limits on domestic biofuel production—even combined with significant conventional combustion engine vehicle improvements—mean that hydrogen fuel cell electric or battery electric vehicles fueled by low-GHG sources will be necessary. Complete electrification of the LDV fleet is not required to achieve significant GHG reduction, as replacing 40% of the LDV fleet with zero-emission hydrogen vehicles while achieving optimistic biofuel production and conventional vehicle improvements can allow attainment of a low GHG emission target. Our results show that the long time scale for vehicle turnover will ensure significant emissions from the LDV sector, even when lower emission vehicles and fuels are widely available within 15 years. Reducing petroleum consumption is comparatively less difficult, and significant savings can be achieved using efficient conventional gasoline-powered vehicles.     

Reduction potentials of energy demand and GHG emissions in China's road transport sector

Rapid growth of road vehicles, private vehicles in particular, has resulted in continuing growth in China's oil demand and imports, which has been widely accepted as a major factor effecting future oil availability and prices, and a major contributor to China's GHG emission increase. This paper is intended to analyze the future trends of energy demand and GHG emissions in China's road transport sector and to assess the effectiveness of possible reduction measures. A detailed model has been developed to derive a reliable historical trend of energy demand and GHG emissions in China's road transport sector between 2000 and 2005 and to project future trends. Two scenarios have been designed to describe the future strategies relating to the development of China's road transport sector. The ‘Business as Usual’ scenario is used as a baseline reference scenario, in which the government is assumed to do nothing to influence the long-term trends of road transport energy demand. The ‘Best Case’ scenario is considered to be the most optimized case where a series of available reduction measures such as private vehicle control, fuel economy regulation, promoting diesel and gas vehicles, fuel tax and biofuel promotion, are assumed to be implemented. Energy demand and GHG emissions in China's road transport sector up to 2030 are estimated in these two scenarios. The total reduction potentials in the ‘Best Case’ scenario and the relative reduction potentials of each measure have been estimated.