Special Report: How U.S. regulators allow ethanol plants to pollute more than oil refineries

Green Plains

08/09/2022 11:00

(For more Reuters Special Reports, click on  SPECIAL/ )
    By Leah Douglas
    WASHINGTON, Sept 8 (Reuters) - In 2007, the U.S. Congress
mandated the blending of biofuels such as corn-based ethanol
into gasoline. One of the top goals: reducing greenhouse gas
emissions.
    But today, the nation’s ethanol plants produce more than
double the climate-damaging pollution, per gallon of fuel
production capacity, than the nation’s oil refineries, according
to a Reuters analysis of federal data.
    The average ethanol plant chuffed out 1,187 metric tons of
carbon emissions per million gallons of fuel capacity in 2020,
the latest year data is available. The average oil refinery, by
contrast, produced 533 metric tons of carbon.
    The ethanol plants’ high emissions result in part from a
history of industry-friendly federal regulation that has allowed
almost all processors to sidestep the key environmental
requirement of the 2007 law, the Renewable Fuel Standard (RFS),
according to academics who have studied ethanol pollution and
regulatory documents examined by Reuters. The rule requires
individual ethanol processors to demonstrate that their fuels
result in lower carbon emissions than gasoline.
    The Environmental Protection Agency (EPA) is charged with
writing the regulations to meet the goals set by Congress. For
processors, that translates to an EPA requirement that the
plants use certain emissions-control processes the agency
assumes will result in lower-than-gasoline emissions.
    But the agency has exempted more than 95% of U.S. ethanol
plants from the requirement through a grandfathering provision
that excused plants built or under construction before the
legislation passed. Today, these plants produce more than 80% of
the nation’s ethanol, according to the EPA. 
    Among the five biggest polluters in 2020, per gallon of fuel
capacity, were plants owned by Archer-Daniels-Midland Co
 ADM.N , Golden Triangle Energy, Central Indiana Ethanol, Green
Plains Inc  GPRE.O  and Marquis Energy, according to the Reuters
analysis. Plants operated by major energy companies POET LLC
 PTBBU.PK  and Valero Energy Corp  VLO.N  were among the top 15.
(For a graphic showing the top five dirtiest ethanol refineries,
click here: https://www.datawrapper.de/_/MVaMG/ )
    Green Plains, Marquis and POET said that ethanol is cleaner
than gasoline, despite higher plant-level emissions, when all
factors are considered, including emissions from fuel
consumption in vehicles. The other companies did not respond to
requests for comment.
    Some of the exempted plants produced much less pollution,
including some owned by the same companies producing the highest
emissions. The EPA said about a third meet the law’s
environmental standard even though they are not required to do
so. But as a group, the plants freed from regulation produced
40% more pollution per gallon of fuel capacity, on average, than
the plants required to comply, the Reuters analysis found.
    The EPA’s resolve to rein in ethanol emissions faces a new
test this year as Congressional mandates for expanding biofuels
expire, placing the future of the RFS at the agency’s
discretion. The EPA is expected to propose regulatory changes
later this year but has yet to publicly detail any proposed
revisions.
    White House representatives of Democratic U.S. President Joe
Biden, who has vowed to aggressively fight climate change, did
not comment on the Reuters findings on ethanol emissions. In
response to Reuters inquiries, the EPA said it has followed the
intent of Congress in implementing the biofuels law, including
the regulatory exemptions. The agency acknowledged the higher
production emissions of ethanol, compared to gasoline, but
asserted that ethanol is cleaner overall.
    The agency also touted ethanol’s benefits on rural economies
and national security. “Renewable fuels help diversify our
nation’s energy supply, improving energy independence and
security,” the agency said, adding that biofuels provide “good
paying jobs and income to farming communities.”
    Ethanol industry representatives have recognized the need to
lower the biofuel’s carbon emissions, and biofuel producers have
been investing in projects that would capture plants’ carbon
emissions and bury them permanently underground.  urn:newsml:reuters.com:*:nL2N2VC293
    The leading ethanol industry group maintains, however, that
ethanol is cleaner than gasoline. “Ethanol offers a significant
and immediate carbon savings,” said Geoff Cooper, president of
the Renewable Fuels Association (RFA), in a statement to
Reuters.
    Other industry observers say the RFS has utterly failed to
meet its stated environmental goals. The ethanol mandate was
“just a mistake,” said Timothy Searchinger, a senior researcher
at Princeton University’s Center for Policy Research on Energy
and the Environment. “We created a terrible model.”
    
    DISPUTED GOVERNMENT RESEARCH
    Ethanol does have a key environmental advantage over
gasoline: It burns cleaner in cars. The problem, biofuels
researchers have found, is that those gains are offset by the
pollution from planting corn and refining it into fuel.
    Researchers from industry, government and academia seek to
account for all these dynamics in estimating ethanol’s pollution
throughout its full “life cycle” -- from farms to processing
plants to automobile tailpipes.
    The Reuters analysis examined one major part of that cycle -
ethanol processing - based on the emissions data that most
plants are required to report to the EPA. The data provides the
only view of ethanol emissions tied to individual processors,
allowing for comparisons among ethanol plants subject to the
emissions-reduction regulation, those exempt from it, and their
counterparts in oil refining.
    Government and academic researchers have also sought to
estimate the industry’s overall pollution, but they have come to
sharply contrasting conclusions.
    A growing consensus of academics has found that, considering
all phases of the fuel’s life cycle, ethanol produces more
carbon than gasoline - not less. A study published by the
National Academy of Sciences in February, for example, estimated
that ethanol produces 24% more carbon.  urn:newsml:reuters.com:*:nL1N2UM1QO
    The EPA’s methodology, by contrast, has hewed closer to the
findings of industry-commissioned studies, which assert that
ethanol produces as much as 40% less lifecycle emissions than
gasoline. The EPA has used a controversial methodology to
estimate the ethanol industry’s life-cycle emissions that has
effectively ensured the industry’s continuing regulatory
compliance. The model greatly underestimates the industry’s
pollution from corn agriculture, four academic researchers of
ethanol told Reuters.
    The EPA methodology relies in part on the work of a
researcher from Purdue University in Indiana, whose model the
agency selected at the ethanol industry’s suggestion, regulatory
documents show.
    The RFA said the Reuters analysis of processing-plant
pollution inappropriately focused on only one aspect of the
industry’s pollution profile and disputed the findings of
independent academic researchers showing the overall life-cycle
emissions of ethanol are higher than gasoline. Cooper, the
association’s president, concluded that “the science is clear,”
showing overall ethanol emissions are “40-50% lower than
gasoline.”
    
    EXEMPTIONS FOR POLLUTERS
    The ethanol industry’s high emissions are caused in part by
the exemptions the EPA has granted to almost all ethanol plants,
academic researchers said.
    The law requires that the ethanol industry demonstrate that
the fuel delivers a 20% reduction in carbon emissions compared
with gasoline. The percentage is based on the EPA’s model for
estimating emissions from all phases of the fuel’s life cycle,
including agricultural and fuel consumption. But individual
processing plants can meet the standard by agreeing to certain
EPA-stipulated emissions-control practices.
    Congress initially required the exemptions, but the EPA had
broad authority to interpret the law. Several environmental
groups asked the agency early on to set an expiration date for
the exemptions, or to terminate exemptions for plants that are
substantially upgraded or expanded. The agency declined,
regulatory records show. The EPA argued in documents outlining
the final rule in 2010, for example, that terminating an
upgraded plant’s exemption status would require an agency
evaluation that would be too “time consuming.”
    The legacy of the exemptions is apparent at the Vantage Corn
Processors ethanol plant, a hulking complex of steel silos,
storage tanks and brick factory buildings that dominates the
riverfront in downtown Peoria, Illinois, near the heart of the
U.S. corn belt.
    The facility was among the dirtiest U.S. ethanol plants,
according to a Reuters analysis of EPA data. The plant cranked
out more than 3,600 metric tons of carbon dioxide - seven times
more than the average oil refinery - for every million gallons
of fuel produced.
    The plant was owned in 2020 by ADM, the multinational food
processor and agricultural trader, and was purchased the
following year by BioUrja Group, a global energy firm. BioUrja’s
chief operating officer, Shék Jain, said the data analyzed by
Reuters reflects emissions under ADM ownership and that his
company is making the plant more efficient. ADM did not comment.
    The Peoria plant is among 240 of 251 U.S. ethanol production
facilities that are exempted from emissions-reduction
requirements, EPA data show.
    Reuters analyzed 165 of the exempted facilities, those for
which both production and emissions data were available. The
remaining facilities are not required by federal law to report
their pollution levels because their carbon emissions were below
25,000 metric tons annually. Generally, that indicates they are
small processing facilities.
    While the small number of ethanol plants subject to
regulation produce 40% less pollution than the exempted plants,
they still produce more pollution, on average, than oil
refineries, the Reuters analysis found. Ethanol plants complying
with the rule produced an average of 860 metric tons of carbon
per millions of gallons of fuel capacity, compared to 533 tons
at the average oil refinery. The average exempted ethanol plant
produced 1,203 tons of carbon.
    The grandfathered facilities produced 4.8 million tons more
carbon emissions than they would have if they had been required
to comply with the standard, according to a Reuters calculation
based on the average emissions from regulated and unregulated
plants. That’s equivalent to the emissions of more than a
million cars.
    
    INDUSTRY-FRIENDLY ASSUMPTIONS
    The U.S. government has maintained that ethanol produces
less pollution than gasoline despite the growing body of
independent research showing the opposite. The EPA bases its
claim that ethanol benefits the climate on calculations made
nearly 15 years ago using a handful of scientific models. The
models include one that was recommended to the agency by the
Renewable Fuels Association, agency documents show.
    When Congress passed the RFS, it required the EPA to model
ethanol’s emissions profile to verify it could meet the
emissions-reduction standard. The EPA’s first pass at the
calculation in 2009, however, found that ethanol would result in
a 5% increase in greenhouse gas emissions over gasoline, which
would have barred the fuel from the blending mandates.
    Industry groups including the RFA bristled at the
calculation and urged the agency to change the formula. The
industry recommendations included adopting a model maintained by
the Global Trade Analysis Project (GTAP) at Purdue University to
estimate the pollution generated by planting corn for ethanol,
EPA records of the debate show.
    The EPA redid its modeling and used GTAP to test its
results, according to a 2010 Congressional Research Service
report. It concluded ethanol’s emissions were 21% lower than
gasoline - putting the biofuel just barely over the 20%
threshold for RFS compliance.
    The agency told Reuters that it did not make the modeling
change solely at the industry’s request, but rather included
input from “government, academia, industry, and not-for-profit
institutions.”
    The Purdue model’s approach to estimating agricultural
emissions has been disputed by academics. 
    The bulk of ethanol emissions are produced when new land is
tilled for corn production, releasing carbon that is stored in
soil and roots. Two biofuel experts told Reuters that the team
working on the Purdue model has steadily reduced its estimate of
how much carbon is released from tilled land over the years,
making ethanol appear more climate-friendly. For instance, the
model has been adjusted over the past decade to overstate
increases in corn yields, resulting in an underestimate of
emissions from planting, according to a study published in 2020
by the Journal of Cleaner Production, an academic publication
focused on sustainability.
    The changes raise concerns about the model’s credibility and
result in a “really lowball estimate” for agricultural emissions
from ethanol, said Stephanie Searle, director of the fuels
program at the International Council on Clean Transportation, a
nonprofit research organization.
    The Purdue model is led by Dr. Farzad Taheripour, a
researcher and professor of agricultural economics. Taheripour
said the model was modified over time to reflect real-world
observations of how biofuels production has affected land use.
For instance, early scholarship on ethanol regulation suggested
the RFS would lead to deforestation, which did not occur, he
said.
    Taheripour has received research funding from several
biofuels industry trade groups since 2012, including the
Renewable Fuels Association, National Corn Growers Association,
Indiana Corn Soybean Alliance, and National Biodiesel Board,
according to a Reuters review of his research funding
disclosures.
    Reuters was not able to determine the total amount of
industry grants Taheripour has collected or the amount he may
have received from other sources. Taheripour said his funding
sources do not affect his research methods or outcomes.

    LAND CONVERSION 
    When Congress passed the RFS, it barred farmers from
planting previously uncultivated acres with corn for ethanol, a
measure intended to limit carbon emissions. And biofuels
supporters often point to the fact that overall U.S. corn
acreage has stayed relatively stable since the passage of the
biofuels law in 2007.
    Some scientists counter that corn planting would have
dropped significantly without the government biofuels mandate.
In the 25 years before the law’s passage, corn acreage declined
nearly 7%, due in part to increasing yields per acre.
    Moreover, corn acreage statistics do not account for
millions of acres of corn for ethanol being planted on new lands
-- the result of another EPA regulation that relaxed
restrictions on the industry. 
    During its initial RFS rulemaking, the agency allowed new
corn planting for ethanol on land enrolled in the U.S.
Department of Agriculture’s Conservation Reserve Program (CRP),
which pays farmers a monthly rent to keep fragile land idle.
    Since then, farmers have planted about 5 million acres of
conserved land with corn for ethanol, according to the National
Academy of Sciences study. All that planting comes with “a
carbon cost,” said Tyler Lark, a scientist at the University of
Wisconsin-Madison’s Center for Sustainability and the Global
Environment and the study’s lead author.
    Taheripour dismissed the idea that the ethanol industry’s
new corn plantings produced much pollution.
    “CRP land is nothing but unused cropland,” Taheripour said.
“Unused land does not have the capability to capture lots of
carbon.”
    The USDA has for years claimed otherwise – that unused
farmland in its CRP program soaked up massive amounts of carbon.
Touting the program as a major solution to climate change, the
department estimated between 2006 and 2017 that such lands
contained about 1.4 metric tons of carbon per acre, on average.
    Asked about the climate benefits of CRP land for this story,
however, the USDA told Reuters it had recently lowered its
estimate of carbon in such lands by nearly half, to 0.8 metric
tons per acre, after reviewing updated data. 
    Given the scientific disputes surrounding ethanol, industry
and governmental claims of a major climate benefit are dubious,
said Rich Plevin, an environmental consultant and former
researcher at the University of California-Berkeley who has
studied biofuels emissions. 
    “Did the policy achieve anything? I think it’s really hard
to claim that it did for the environment,” he said. “The best we
can say is, no one really knows.”

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Dirtiest U.S. ethanol refineries    https://www.datawrapper.de/_/MVaMG/
U.S. ethanol industry banks on carbon capture to solve emissions
problem    https://www.reuters.com/business/sustainable-business/us-ethanol-industry-banks-carbon-capture-solve-emissions-problem-2022-03-11/#:~:text=March%2011%20(Reuters)%20%2D%20U.S.,to%20industry%20groups%20and%20executives.
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 (Reporting by Leah Douglas; editing by Richard Valdmanis and
Brian Thevenot)
 ((Leah.douglas@thomsonreuters.com))