Given the ongoing challenges with the ILUC framework, it may be time to consider alternative approaches to address land use change from biofuels. Directly regulating the amount of vegetable oil or other resources used to make biofuels could be a more effective way to prevent further harm from expansion of these fuels. This would involve setting limits on the types and amounts of feedstocks that can be used for biofuel production, rather than relying on complex and controversial ILUC calculations.
Additionally, policymakers should consider the global impacts of biofuel production and consumption when designing regulations. The expansion of vegetable oil-based fuels has been shown to accelerate deforestation and have significant climate impacts. By setting limits on the use of these feedstocks, policymakers can help mitigate these harms and promote more sustainable biofuel production.
As the CARB workshop on biofuels and land use change takes place this week, it is important for stakeholders to consider these alternative approaches to addressing land use change. By reevaluating the current ILUC framework and exploring new policy options, we can work towards more effective safeguards for sustainable biofuel production.
Overall, the issue of indirect land use change from biofuels remains a significant challenge for policymakers and researchers alike. As we continue to grapple with the complexities of biofuels policy, it is crucial to consider alternative approaches that can more effectively address the environmental impacts of biofuel production. By reevaluating current frameworks and exploring new policy options, we can work towards a more sustainable future for biofuels and the environment.
An alternative approach that resolves this methodological problem is to use different types of analysis for different elements of the policy, with a consequential analysis used to shape decisions of fuel producers, and a consequential analysis used to inform safeguards that directly mitigate risks or problems the analysis identifies.
New analysis points to a major problem with vegetable oil-based fuels
Much of the debate since 2008 over land use change has focused on corn ethanol. But for the last decade, most of the growth of biofuel consumption in the US has been from vegetable oil-based biofuels like biodiesel and renewable diesel. A new analysis by Chen, Sexton and Smith from UC Davis and Berkeley finds that using vegetable oils for biofuel accelerates tropical deforestation and increases carbon emissions. This new analysis takes a different approach than GTAP, relying more heavily on empirical data to reduce the dependence of the results on assumptions and model structure. They find that the global expansion of bio-based diesel made from vegetable oil has fueled massive deforestation in Indonesia and Malaysia. The extent of deforestation and associated emissions outweigh any climate benefits from replacing petroleum fuels.
A key finding of the analysis of Chen, Sexton, and Smith is that the extent of deforestation is largely independent of which specific source of vegetable oil is used to make biofuel. This is not surprising, because vegetable oils are all close substitutes in the global food market. But this finding is in tension with the structure of ILUC implementation, which assigns differentiated ILUC scores to specific types of feedstock. For example, the LCFS assigns ILUC emissions of 71.4 g CO2e/MJ to palm oil, 29.1 g CO2e/MJ to soybean oil, and 14.5 g CO2e/MJ to canola oil and zero to inedible corn oil, used cooking oil or animal fats like tallow. These different ILUC scores create differentiated incentives that have had a big impact on the fuel market, as biofuel producers supplying California have scoured the globe to secure feedstocks with the lowest CI scores.
Not surprisingly, biofuel and vegetable oil producers reject the finding that using any source of vegetable oil has a similar impact on global markets. They argue it is unfair to hold midwestern soybean oil accountable for palm oil related deforestation in Indonesia. They have been successful at persuading federal policymakers to change the parameters of federal biofuel policies in a manner that favors major US crops, first by pressuring regulators to reduce ILUC values assigned to these crops and most recently by excluding consideration of ILUC from federal tax credits and restricting biofuel incentives to domestic fuels and feedstocks. The resulting incentive structure of federal policies could have a big impact on California fuel markets in years to come. The strategies California has used to discourage the use of vegetable oil fuels will become less effective because of these changes in federal policy.
Fixing biofuel policies depends on the federal government, but California can help
The federal government bears the primary responsibility for the global harm caused by US biofuel policies. Federal policy has expanded the use of vegetable oil-based fuels to levels that far exceed the availability of US feedstocks to produce those fuels, with large and counterproductive impacts on global trade and land use. The result is that an increasing share of US biofuels have been coming from imported feedstocks or fuels. The administration wants US biofuel policies to focus on US fuels and feedstocks, but rather than scaling back biofuel mandates in line with domestic feedstock availability, they have proposed enlarging the mandates and layering on incentives for domestic feedstocks that will lead to costly and counterproductive shuffling of feedstocks and fuels.
I’ve called on the Environmental Protection Agency to scale back its biofuel policy proposal in line with a realistic assessment of feedstock availability. I also explained in a recent talk (video and slides) that because biofuels have a bigger impact on agriculture than transportation, biofuel policies should be designed with agriculture in mind. In particular, the ambition of US biofuel policies should be based on a realistic assessment of domestic feedstock availability and safeguards should ensure biofuels don’t exceed this level and expand the footprint of agriculture in the US or around the world.
California can’t fix problems caused by federal policies, but it can provide an essential laboratory for policy innovation, which is even more critical with federal science sidelined by the Trump administration. California’s LCFS model has been adopted by other states and will hopefully someday inform federal fuel policy reform. The LCFS wisely recognizes that shifting to renewable electricity for transportation is vital to phasing out petroleum and encourages all fuel producers to reduce their supply chain emissions. But before the LCFS can be a scalable model for federal fuel policy reform, California needs to grapple with the land use change challenge that has hung over the LCFS since its inception.
Learning from failed experiments, building safeguards that work in the real world
Scientists often learn more from failed experiments than they do from successes. But to learn these lessons one must acknowledge when an experiment has failed. California’s LCFS is an elegant policy that has a lot to recommend it, but its efforts to safeguard against harmful land use change have struggled. ILUC adjustments to CI scores are uncertain, technically complex, and prone to political interference. And with multiple overlapping policies affecting markets, adjustments to CI scores have an indirect and uncertain impact on land use.
The essential question policy makers must answer is how much of the vegetable oil, corn, animal fat, and other resources that can be used to make biofuels should be made available for fuel use. This requires an examination of resource availability, competing uses, impacts on land use, deforestation, and food markets. With safeguards in place to avoid excessive diversion of these resources to fuel use, the LCFS can create an incentive structure that supports transportation electrification, encourages all fuel producers to reduce emissions, and requires steady progress from the transportation fuel sector as a whole. A Low-Carbon Fuel Standard for California, Part 1: Technical Analysis, published by UC Davis’ Institute of Transportation Studies, delves into the technical aspects of implementing a low-carbon fuel standard in California. The study examines various biofuel sources, with a focus on major vegetable oils that are commonly used for biofuel production. However, the study does not include an analysis of secondary fats and oils such as tallow, used cooking oil, or inedible corn oil, which are also significant contributors to the bio-based diesel market in California.
While primary vegetable oils make up the majority of global biofuel consumption, the availability and production data for secondary fats and oils are more limited. These secondary feedstocks are often used in other industries, such as soap and detergent manufacturing or animal feed production. When these secondary fats and oils are diverted to biofuel production, they must be replaced with alternative resources, leading to indirect impacts that warrant further study.
The substitution of primary vegetable oils with secondary fats and oils will have similar effects on the biofuel market, but the specific dynamics may differ. As the demand for bio-based diesel made from secondary feedstocks continues to grow, understanding the indirect consequences of their use becomes increasingly important.
In conclusion, the Technical Analysis study provides valuable insights into the complexities of implementing a low-carbon fuel standard in California. By considering a wider range of biofuel sources, including secondary fats and oils, policymakers can make more informed decisions to promote sustainable and environmentally friendly fuel options.
For more information on the policy implications of a low-carbon fuel standard in California, be sure to check out Part 2 of the study: A Low-Carbon Fuel Standard for California, Part 2: Policy Analysis.
