EPA Wrong Again on Biofuel Enabling Policies

As often and as vigorously as the Obama administration pronounces its support of cleaner forms of energy and efforts to curb global climate change, the failure of EPA in its rule-making process to adopt sensible policies that can make huge strides in reducing greenhouse gas emissions in the transportation sector is incredibly puzzling.

Last week, in the latest of a string of missteps, EPA finalized guidance to automobile manufacturers, a move that unfortunately reduces by 30 percent the already inadequate federal incentive for automobile manufacturers to scale up production of flex-fuel vehicles (FFV). The fact that it took EPA more than a year to reach a decision further demonstrates the failure of the agency to take even the simplest of steps to accelerate the introduction of less carbon intensive transportation fuels into the marketplace.

The agency’s finalization came only a few days after 25x’25 and various partners, including agricultural, conservation, environmental, public health, alternative fuel and bioenergy value chain partners, wrote to EPA asking the agency to endorse Volkswagen of America’s recent request for regulators to issue a Proposed Guidance Letter concerning the E85 weighting factor (“F factor”) for model year 2016-2025 dual fuel vehicles. The guidance, biofuel advocates say, would be “critical to incentivize the continued production of flex fuel vehicles (FFVs) and to support the further advancement and deployment of biofuels into the nation’s liquid transportation fuel pool; fuels which are essential to reducing greenhouse gas (GHG) emissions and enhancing air quality.”

Sadly, the agency ignored the request and issued guidance that falls far short of what Volkswagen proposed and was endorsed in the 25x’25 partners FFV sign on letter. Instead, EPA leaves in place a systematic bias against ethanol, evidenced by the generous credits the agency doles out to other “alternative vehicle technologies,” including dual fuel compressed natural gas (CNG) vehicles and plug-in hybrid electric vehicles (PHEV), but not E85 FFVs.

The 25x’25 letter last week acknowledged that fuel choice among gasoline, diesel, ethanol, electricity, hydrogen and natural gas is one important option considered by a consumer. However, EPA must provide enhanced incentives for FFVs that would create parity with other alternative fuel vehicles and level the playing field for the sale of FFVs.

By providing the regulatory framework that encourages the continual introduction and expansion of FFVs as part of the overall advanced fuel vehicle technologies portfolio, the agency would incent the consumption of alternative transportation fuels in the marketplace that provide immediate GHG benefits. It would also help facilitate successful implementation of the Renewable Fuel Standard (RFS) program, given that increased use of E85 and midlevel blends in FFVs offers a readily available pathway for blenders to help meet the goals of the RFS.

Today more than 17 million FFVs operate on American roads, and their use of E85 and midlevel ethanol blends represents the most cost-effective and efficient way to help meet the ambitious new federal standards for reducing petroleum use and tailpipe emissions. Ethanol and other advanced biofuels facilitate CO2 emission reductions both within the vehicle, and, more importantly, throughout their production life cycle.

Recent analyses estimate that corn ethanol life-cycle greenhouse gas emissions are up to 48 percent lower than conventional gasoline. And research performed by the Life Cycle Associates (LCA) has shown that emerging co-products such as corn stover used as animal feed and cellulosic ethanol from corn stover and corn kernel fiber will further reduce the carbon intensity of corn ethanol. Analyses also show a 100-percent reduction in GHG emissions in ethanol made from forest residue collected as part of sustainable forest management for wildfire protection and thinning of commercial forests.

But for these benefits to be realized, FFVs must continue to be built. Without federal incentives to help offset the extra costs of producing FFVs , expanded and in fact continued production of these vehicles is at great risk.

Does the EPA’s issuance of its guidance last week mean the battle is over? Not at all. The agency’s short-sightedness is very disappointing news. But the action also helps sets the stage for what 25x’25’s close partner, the Energy Future Coalition, says needs to happen next ‑ a high level, White House-led intergovernmental review of EPA’s decision-making around a whole suite of biofuel/bioenergy policy decisions. 25x’25 urges all clean energy advocates to stand behind automobile manufacturers in supporting meaningful vehicle production policies that resolve the lack of parity in federal incentives for FFVs and other alternative-fueled vehicles and allow for the expanded use of lower carbon intensive biofuels.

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