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Crop Biotech Update

US National Academy of Sciences Report on Economic and Environmental Effects of Renewable Fuels Standard (RFS)

October 28, 2011

The United States National Academy of Sciences(US-NAS) recently published a report, entitled, "Renewable Fuel Standard: Potential Economic and Environmental Effects of U.S. Biofuel Policy". The report was made on the request of the United States Congress to assess the economic and environmental benefits/concerns related to achieving the targets of the Renewable Fuels Standard (RFS).

The RFS was enacted by the U.S. Congress in 2005 as part of the Energy Policy Act, and was amended in the 2007 Energy Independence and Security Act (EISA). The purpose of the RFS was to "encourage the production and consumption of biofuels in the United States".

The amended RF Sunder the 2007 EISA is sometimes referred to as "RFS 2". There are four categories for the total renewable fuel requirement under the RFS 2:

  • ethanol derived from cornstarch, with a life-cycle greenhouse gas (GHG) threshold of at least 20-percent reduction in emissions compared to petroleum-based gasoline and diesel (target:15 billion gallons by 2022),
  • biomass-based diesel that achieves life-cycleGHG threshold of at least 50 percent (target: 1 billion gallons by 2022),
  • advanced biofuels that are renewable fuels other than corn-starch-derived ethanol which achievesa life cycle GHG threshold of at least 50 percent (target: 4 billion gallons by 2022); (advanced biofuels can include cellulosic biofuels and biomass-based diesel), and
  • cellulosic biofuels derived from any cellulose, hemicellulose, or lignin from renewable biomass that can achieve a life-cycle GHG threshold of at least 60 percent (target: 16 billion gallons by 2022).

Among the key findings mentioned in the report are:

  • the RFS2-mandated target consumption of 16 billion gallons of ethanol-equivalent cellulosic biofuels is unlikely to be met in 2022, unless there are major technological innovations or policy changes,
  • biofuels would be cost-competitive with petroleum-based fuels, only in an economic environment characterized by high oil prices, technological breakthroughs, and a high implicit or actual carbon price,
  • because the effect of biofuels on GHG (greenhouse gas) emissions depends on the production method and land-use/land-cover change factors, the RFS2 may be an ineffective policy for reducing global GHG emissions,
  • implementation of RFS2 may create competition among different land uses, raise cropland prices, and increase the cost of food and feed production,in the absence of improvements in both agricultural yields and biomass-to-biofuel conversion efficiencies,
  • food-based biofuel is one of many factors that contributed to upward price pressure on agricultural commodities,food, and livestock feed since 2007.

Details on how to access the NAS report can be obtained from the website of the National Academy of Sciences (URL above).