Indirect land use change and biofuels: Mathematical analysis reveals a fundamental flaw in the regulatory approach

In the Renewable Fuel Standard (RFS2) program, the United States Environmental Protection Agency (U.S. EPA) has used partial equilibrium models to estimate the overall indirect land use change (iLUC) associated with the biofuel scenario mandated by the Energy Independence and Security Act of 2007 (EISA). For regulatory purposes, the U.S. EPA “shocks” (changes) the amount of each biofuel in the economic models one at a time to estimate the threshold values for specific biofuels (single-shock analysis). The primary assumption in the single-shock analysis is that iLUC is a linear process with respect to biofuels, i.e., that interactions between different biofuels are trivially small. However, the assumption of linearity in the single-shock analysis is not appropriate for estimating the threshold values for specific biofuels when the interactions between different biofuels are not small.Numerical results from the RFS2 program show that the effects of interactions between different biofuels are too large to be ignored. Thus, the threshold values for specific biofuels determined by the U.S. EPA are scenario-dependent and value choice-driven. They do not reflect real impacts of specific biofuels. Using scenario-dependent values for regulation is arbitrary and inappropriate. Failure to deal appropriately with interactions between different biofuels when assigning iLUC values to specific biofuels is a mathematical and systematic flaw; it is not an “uncertainty” issue. The U.S. EPA should find better ways to differentiate the contribution of one biofuel versus another when assigning iLUC values or find better means of regulating the land use change impact of biofuel production.     

Global land-use implications of first and second generation biofuel targets

Recently, an active debate has emerged around greenhouse gas emissions due to indirect land use change (iLUC) of expanding agricultural areas dedicated to biofuel production. In this paper we provide a detailed analysis of the iLUC effect, and further address the issues of deforestation, irrigation water use, and crop price increases due to expanding biofuel acreage. We use GLOBIOM – an economic partial equilibrium model of the global forest, agriculture, and biomass sectors with a bottom-up representation of agricultural and forestry management practices. The results indicate that second generation biofuel production fed by wood from sustainably managed existing forests would lead to a negative iLUC factor, meaning that overall emissions are 27% lower compared to the “No biofuel” scenario by 2030. The iLUC factor of first generation biofuels global expansion is generally positive, requiring some 25 years to be paid back by the GHG savings from the substitution of biofuels for conventional fuels. Second generation biofuels perform better also with respect to the other investigated criteria; on the condition that they are not sourced from dedicated plantations directly competing for agricultural land. If so, then efficient first generation systems are preferable. Since no clear technology champion for all situations exists, we would recommend targeting policy instruments directly at the positive and negative effects of biofuel production rather than at the production itself.     

Consequential effects of increased biofuel demand in Spain: Global crop area and CO2 emissions from indirect land use change

The indirect Land Use Change (iLUC) impacts of biofuels refer to the effects of additional emissions due to land-use changes triggered by the expansion of energy crops in response to increased biofuel demand. These emissions are mostly greenhouse gases (GHG), thus relevant to the climate change impact category. In order to address these effects, the European Commission (EC) has proposed the inclusion of feedstock type specific iLUC factors for different biofuel sources in the Renewable Energy Sources Directive 2009/28/EC (RED). The goal of this study is to quantify the indirect environmental impacts both in terms of global energy crop land area and the subsequent iLUC, if an additional demand of biofuel in Spain occurs, from a consequential approach. Results show a wide range of GHG emissions, in terms of CO₂, of biodiesel and bioethanol from iLUC effects, strongly influenced by the place where the potential biofuel is produced. Based on our study, two main aspects -determine the iLUC effects: the dedicated energy crops that are used to produce biofuels and the different coproducts obtained along the biofuels production process. Therefore, contrary to the EC proposal for including a single factor by type of crop, the development of origin-dependent iLUC factors seems to be a more appropriate alternative based on the current assessment. Other aspects that might affect the results, such as crop rotation or field management, have been excluded from the analysis in this work.     

Recent developments of biofuels/bioenergy sustainability certification: A global overview

The objective of this paper is to provide a review on the latest developments on the main initiatives and approaches for the sustainability certification for biofuels and/or bioenergy. A large number of national and international initiatives lately experienced rapid development in the view of the biofuels and bioenergy targets announced in the European Union, United States and other countries worldwide. The main certification initiatives are analysed in detail, including certification schemes for crops used as feedstock for biofuels, the various initiatives in the European Union, United States and globally, to cover biofuels and/or biofuels production and use. Finally, the possible way forward for biofuel certification is discussed. Certification has the potential to influence positively direct environmental and social impact of bioenergy production. Key recommendations to ensure sustainability of biofuels/bioenergy through certification include the need of an international approach and further harmonisation, combined with additional measures for global monitoring and control. The effects of biofuels/bioenergy production on indirect land use change (ILUC) is still very uncertain; addressing the unwanted ILUC requires sustainable land use planning and adequate monitoring tools such as remote sensing, regardless of the end-use of the product.     

Contemporaneous interactions among fuel,biofuel and agricultural commodities

This study examines the contemporaneous interactions among energy (oil and ethanol) and agricultural commodities (corn, soybean, and wheat) in the United States during the period 1 June 2006 to 22 January 2016. Since traditional VAR analysis is not able to capture the contemporaneous interactions among these commodities, we employ a structural VAR analysis in combination with the identification through heteroskedasticity approach. The empirical results indicate that i) the contemporaneous interactions are important, asymmetric, and have implications for impulse response functions; ii) crude oil has a unidirectional contemporaneous impact on the agricultural commodities, and the agricultural commodities (corn and soybean) – mostly used in the biofuel production – have a unidirectional contemporaneous impact on ethanol; and finally, iii) these contemporaneous relations depend on the price level of crude oil in that there are stronger effects from crude oil (agricultural commodities) to agricultural commodities (ethanol) in high crude oil price states.     

Energy and greenhouse gas emission effects of corn and cellulosic ethanol with technology improvements and land use changes

Use of ethanol as a transportation fuel in the United States has grown from 76 dam³ in 1980 to over 40.1 hm³ in 2009 — and virtually all of it has been produced from corn. It has been debated whether using corn ethanol results in any energy and greenhouse gas benefits. This issue has been especially critical in the past several years, when indirect effects, such as indirect land use changes, associated with U.S. corn ethanol production are considered in evaluation. In the past three years, modeling of direct and indirect land use changes related to the production of corn ethanol has advanced significantly. Meanwhile, technology improvements in key stages of the ethanol life cycle (such as corn farming and ethanol production) have been made. With updated simulation results of direct and indirect land use changes and observed technology improvements in the past several years, we conducted a life-cycle analysis of ethanol and show that at present and in the near future, using corn ethanol reduces greenhouse gas emission by more than 20%, relative to those of petroleum gasoline. On the other hand, second-generation ethanol could achieve much higher reductions in greenhouse gas emissions. In a broader sense, sound evaluation of U.S. biofuel policies should account for both unanticipated consequences and technology potentials. We maintain that the usefulness of such evaluations is to provide insight into how to prevent unanticipated consequences and how to promote efficient technologies with policy intervention.     

Life cycle assessment of various cropping systems utilized for producing biofuels: Bioethanol and biodiesel

A life cycle assessment of different cropping systems emphasizing corn and soybean production was performed, assuming that biomass from the cropping systems is utilized for producing biofuels (i.e., ethanol and biodiesel). The functional unit is defined as 1 ha of arable land producing biomass for biofuels to compare the environmental performance of the different cropping systems. The external functions are allocated by introducing alternative product systems (the system expansion allocation approach). Nonrenewable energy consumption, global warming impact, acidification and eutrophication are considered as potential environmental impacts and estimated by characterization factors given by the United States Environmental Protection Agency (EPA-TRACI). The benefits of corn stover removal are (1) lower nitrogen related environmental burdens from the soil, (2) higher ethanol production rate per unit arable land, and (3) energy recovery from lignin-rich fermentation residues, while the disadvantages of corn stover removal are a lower accumulation rate of soil organic carbon and higher fuel consumption in harvesting corn stover. Planting winter cover crops can compensate for some disadvantages (i.e., soil organic carbon levels and soil erosion) of removing corn stover. Cover crops also permit more corn stover to be harvested. Thus, utilization of corn stover and winter cover crops can improve the eco-efficiency of the cropping systems. When biomass from the cropping systems is utilized for biofuel production, all the cropping systems studied here offer environmental benefits in terms of nonrenewable energy consumption and global warming impact. Therefore utilizing biomass for biofuels would save nonrenewable energy, and reduce greenhouse gases. However, unless additional measures such as planting cover crops were taken, utilization of biomass for biofuels would also tend to increase acidification and eutrophication, primarily because large nitrogen (and phosphorus)-related environmental burdens are released from the soil during cultivation.     

A conceptual lignocellulosic ‘feed+fuel’ biorefinery and its application to the linked biofuel and cattle raising industries in Brazil

It has been argued by some that the substitution of biofuels for gasoline could increase greenhouse gas (GHG) emissions, rather than reduce them. The increase is attributed to the indirect land use change effects of planting new grain and corn crops around the world to replace those progressively being devoted to ethanol production. In this paper, indirect effects are minimised by allowing land to be used for both food and fuel, rather than for one or the other. We present a sugarcane ‘feed+fuel’ biorefinery, which produces bioethanol and yeast biomass, a source of single-cell protein (SCP), that can be used as a high-protein animal feed supplement. The yeast SCP can partially substitute for grass in the feed of cattle grazing on pasture and thereby potentially release land for increased sugarcane production, with minimal land use change effects. Applying the concept conservatively to the Brazilian ethanol and livestock industry our model demonstrates that it would be technically feasible to raise ethanol production threefold from the current level of 27 GL to over 92 GL. The extra ethanol would meet biofuel market mandates in the US without bringing any extra land into agricultural or pastoral use. The analysis demonstrates a viable way to increase biofuel and food production by linking two value chains as called for by industrial ecology studies.     

Cob biomass supply for combined heat and power and biofuel in the north central USA

Corn (Zea mays L.) cobs are being evaluated as a potential bioenergy feedstock for combined heat and power generation (CHP) and conversion into a biofuel. The objective of this study was to determine corn cob availability in north central United States (Minnesota, North Dakota, and South Dakota) using existing corn grain ethanol plants as a proxy for possible future co-located cellulosic ethanol plants. Cob production estimates averaged 6.04 Tg and 8.87 Tg using a 40 km radius area and 80 km radius area, respectively, from existing corn grain ethanol plants. The use of CHP from cobs reduces overall GHG emissions by 60%–65% from existing dry mill ethanol plants. An integrated biorefinery further reduces corn grain ethanol GHG emissions with estimated ranges from 13.9 g CO₂ equiv MJ⁻¹ to 17.4 g CO₂ equiv MJ⁻¹. Significant radius area overlap (53% overlap for 40 km radius and 86% overlap for 80 km radius) exists for cob availability between current corn grain ethanol plants in this region suggesting possible cob supply constraints for a mature biofuel industry. A multi-feedstock approach will likely be required to meet multiple end user renewable energy requirements for the north central United States. Economic and feedstock logistics models need to account for possible supply constraints under a mature biofuel industry.     

Modeling the relationship between the oil price and global food prices

The growth of corn-based ethanol production and soybean-based bio-diesel production following the increase in the oil prices have significantly affect the world agricultural grain productions and its prices. The main purpose of this paper is to investigate the relationships between the crude oil price and the global grain prices for corn, soybean, and wheat. The empirical results show that the change in each grain price is significantly influenced by the changes in the crude oil price and other grain prices during the period extending from the 3rd week in 2005 to the 20th week in 2008 which implies that grain commodities are competing with the derived demand for bio-fuels by using soybean or corn to produce ethanol or bio-diesel during the period of higher crude oil prices in these recent years. The subsidy policies in relation to the bio-fuel industries in some nations engaging in bio-fuel production should be considered to avoid the consequences resulting from high oil prices.     

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.     

Impacts of a United States’ biofuel policy on New Zealand's agricultural sector

The rise in oil prices has spurred interest in biofuels. Policies in the United States like the renewable fuel standard (RFS) have led to an expansion of ethanol production, while the New Zealand government has mandated a minimum level of biofuel sales.The research used a partial equilibrium model of international trade to quantify the price and farmgate income effects of the US RFS policy. The goal was to examine the competition between food and biofuel production and to quantify the impact of the policy on the agricultural sector in New Zealand.The RFS policy has a significant impact on corn prices, but a small effect on livestock prices and production. There thus appears to be little conflict between food and fuel uses for corn at the level of the RFS mandate. New Zealand's pasture-based livestock sector benefits from the use of corn for ethanol production: it receives better prices for its products, but does not face the same input cost increases as competitors. The results suggest that New Zealand faces an interesting decision: it could support investment in biofuels research, or benefit from the biofuels boom through the indirect impacts on demand and prices for meat and milk.     

How does increased corn-ethanol production affect US natural gas prices?

In recent years, there has been a push to increase biofuel production in the United States. The biofuel of choice, so far, has been ethanol produced from corn. The effects of increased corn-ethanol production on the consumer prices of food and energy continue to be studied and debated. This study examines, in particular, the effects of increased corn-ethanol production on US natural gas prices. A structural model of the natural gas market is developed and estimated using two stage least squares. A baseline projection for the period 2007–2018 is determined, and two scenarios are simulated. In the first scenario, current biofuel policies including EISA mandates, tariffs, and tax credits are removed. In the second scenario, we hold ethanol production to the level required only for largely obligatory additive use. The results indicate that the increased level of corn-ethanol production occurring as a result of the current US biofuel policies may lead to natural gas prices that are as much as 0.25% higher, on average, than if no biofuel policies were in place. A similar comparison between the baseline and second scenario indicates natural gas prices could be as much as 0.5% higher, on average, for the same period.     

The trade-off between bioenergy and emissions with land constraints

Agricultural biofuels require the use of scarce land, and this land has opportunity cost. We explore the objective function of a social planner who includes a land constraint in the optimization decision to minimize environmental cost. The inclusion of this land constraint in our optimization model motivates the measurement of emissions on a per-hectare basis. Switchgrass and corn are modeled as competing alternatives to show how the inclusion of a land constraint can influence life cycle rankings and alter policy conclusions. With land use unconstrained, ethanol produced from switchgrass is always an optimal feedstock relative to ethanol produced from corn. With land use constrained, however, our results show that it is unlikely that switchgrass would be optimal in the midwestern United States, but may be optimal in southern states if carbon is priced relatively high. Whether biofuel policy advocates for one feedstock over another should consider these contrasting results.     

Impact of biofuel production and other supply and demand factors on food price increases in 2008

The prices of some grain commodities more than doubled from March 2007 to March 2008. Increased food prices coincided with increasing global biofuel production, leading to speculation that biofuel production was responsible for the increased food prices. However, over the six-month period after March 2008, grain prices declined by 50% while biofuel production continued to increase. It is not possible to reconcile claims that biofuel production was the major factor driving food price increases in 2007-2008 with the decrease in food prices and increase in biofuel production since mid-2008. The available data suggests that record grain prices in 2008 were not caused by increased biofuel production, but were actually the result of a speculative bubble related to high petroleum prices, a weak US dollar, and increased volatility due to commodity index fund investments.Many factors converged in 2007-2008 to increase food and related commodity prices including increased demand, decreased supply, and increased production costs driven by higher energy and fertilizer costs. Disentangling these factors and providing a precise quantification of their contributions is a difficult, perhaps impossible, task. In 2008, several reports were published by governmental and international agencies that speculated on the cause of increased food prices worldwide. Taken together, the available analyses suggest that biofuel production had a modest (3-30%) contribution to the increase in commodity food prices observed up to mid-2008. The development of second-generation biofuels (e.g., cellulosic ethanol) which use non-food residual biomass or non-food crops should mitigate any future impact of biofuel production on food prices.     

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.     

Modeling state-level soil carbon emission factors under various scenarios for direct land use change associated with United States biofuel feedstock production

Current estimates of life cycle greenhouse gas emissions of biofuels produced in the US can be improved by refining soil C emission factors (EF; C emissions per land area per year) for direct land use change associated with different biofuel feedstock scenarios. We developed a modeling framework to estimate these EFs at the state-level by utilizing remote sensing data, national statistics databases, and a surrogate model for CENTURY's soil organic C dynamics submodel (SCSOC). We estimated the forward change in soil C concentration within the 0–30 cm depth and computed the associated EFs for the 2011 to 2040 period for croplands, grasslands or pasture/hay, croplands/conservation reserve, and forests that were suited to produce any of four possible biofuel feedstock systems [corn (Zea Mays L)-corn, corn–corn with stover harvest, switchgrass (Panicum virgatum L), and miscanthus (Miscanthus × giganteus Greef et Deuter)]. Our results predict smaller losses or even modest gains in sequestration for corn based systems, particularly on existing croplands, than previous efforts and support assertions that production of perennial grasses will lead to negative emissions in most situations and that conversion of forest or established grasslands to biofuel production would likely produce net emissions. The proposed framework and use of the SCSOC provide transparency and relative simplicity that permit users to easily modify model inputs to inform biofuel feedstock production targets set forth by policy.     

Low carbon fuel standards: Implementation scenarios and challenges

Performance-based low carbon fuel standards (LCFS) of the type implemented in California and being adopted in the European Union, are a promising policy approach for decarbonizing transport fuels and reducing fossil fuel use. This paper examines the efficacy of LCFS policies, along with four major challenges that threaten their effectiveness. These challenges include leakage and shuffling of greenhouse gas (GHG) emissions, impacts on energy security, increased GHG emissions due to global land use conversion (indirect land use changes), and sustainability issues associated with biofuel production. We identify complementary policies that mitigate the severity of these challenges, while noting that some of these challenges are inherent to carbon and alternative fuel policies.     

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.