Cut Inflation Act is Ethanol Industry’s Latest Victory


VSOrn farmers and the rest of the ethanol industry have received a lot of good news from Washington over the past few months. The most recent victory is buried in the Cut Inflation Act: $500 million for infrastructure to help sell gasoline with higher ethanol content at gas stations. Now, industry allies in Congress are trying to capitalize on the momentum, pushing sweeping rule changes that would block more ethanol production for decades to come.

But while ethanol proponents have touted the fuel as a way to lower gas prices and help fight climate change, many environmentalists and scientists say the measures are just one way. to block higher maize prices while worsening the climate situation.

Rising fuel prices this spring due to Russia’s invasion of Ukraine, pandemic-induced supply chain challenges, increased demand and other market factors have been a boon for ethanol proponents, who point to increased biofuel production as a way to lower gas prices. “They feel emboldened given these factors,” says David DeGennaro, policy analyst at the National Wildlife Federation. “[They] see it as a way to push for what they’ve been pushing for a while now. In April, President Joe Biden allowed gas stations to blend up to 15% ethanol in the fuel they sell year-round (down from 10%) – a move intended to reduce overall demand for fuel. gasoline and lower the price at the pump. (The actual effects of the policy on prices are probably quite small, however, since less than 2% of US gas stations are equipped to offer 15% ethanol gasoline).

Then in June, the United States Department of Agriculture announced that it had provided $700 million from the 2020 CARES Act funds to help producers of ethanol and other biofuels affected by the pandemic. The Cut Inflation Act – which is heading to President Joe Biden’s desk for signature after passing both the Senate and the House – adds another boost to the industry.

Farm state lawmakers from both parties are trying to keep that wave of support going. Over the past few weeks, some senators have been working to gain new traction on a bill called the Next Generation Fuels Act of 2021. Introduced in the House last year by Illinois Democrat Cheri Bustos, the bill proposes sweeping federal changes to force automakers to make all new gas-powered vehicles capable of running on much higher proportions of ethanol. He’s also calling for new rules that would force gas stations to sell significantly more ethanol nationwide.

Proponents of the legislation, like Sen. Chuck Grassley (R. Iowa) who introduced the bill in the Senate last month, tout the move as a response to high fuel costs and say it would reduce carbon emissions . And while there’s a consensus among green transition planners that electrification, not alternative fuels, is the way forward to decarbonize passenger vehicles, the ethanol industry says that batteries and ethanol are not necessarily at odds. “Electric vehicles will be part of the strategy to achieve carbon neutrality,” says Geoff Cooper, president of the Renewable Fuels Association. “We’re just arguing that ethanol and other renewable fuels should be another big part of this approach and that the two should work together.”

Twenty years ago, environmentalists might have agreed; many environmental groups supported efforts in the 2000s to begin replacing gasoline with ethanol in the United States. But today, few in the movement believe that conventional ethanol, mostly made from corn, has much to offer in terms of reducing emissions. Some emissions models show approximately 40% reductions in lifecycle CO2 emissions when you compare corn ethanol to gasoline. But much of the research also points to an array of unintended consequences from years of large-scale ethanol production. For example, land use changes triggered by pro-ethanol policy actually make fuel as bad as, if not worse than, gasoline, according to a study published in February in the Proceedings of the National Academy of Sciences. That’s because laws encouraging ethanol consumption are pushing farmers to use more land for growing corn. When they plow new fields to prepare for planting, they release carbon dioxide trapped in the soil.

“We have this industry that is already built, producing 14 billion gallons [of ethanol a year]“, explains Tyler Lark, co-author of the study. “If it stays constant, there’s not as much of a cascade of impacts. Whereas if this were to result in an increase in overall national demand for maize, we would fear that it would result in higher crop prices, greater land use change and increased greenhouse gas emissions. greenhouse effect.

It wasn’t supposed to be like this. In the 2000s, ethanol made from fermented corn was touted as a transition fuel to more advanced cellulosic biofuels, which would turn whole plants into fuel, rather than just using their grain. This would lead to much less waste and lower overall emissions. But those processes never took off on a large scale, leaving corn kernels, minus the stalks, cobs and leaves, as the main source of American ethanol to this day.

Corn grower trade groups have strongly supported the Next Generation Fuels Act, which sets the required emission reductions at such a level that they can still be achieved using corn ethanol, as opposed to stricter requirements that would force a switch to more environmentally friendly biofuels. “There are still people working in [cellulosic biofuels]says Aaron Smith, professor of agricultural economics at the University of California, Davis. “If we’re getting a lot of these things, then yes, ethanol is good. But taking it out of corn isn’t going to save us.

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Write to Alejandro de la Garza at [email protected]


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