The debate over the relative merits of plant-based biofuels is not likely to end anytime soon, as evidenced by a report last week from the National Research Council.
Congress requested the report, which is titled “Renewable Fuel Standard: Potential Economic and Environmental Effects of U.S. Biofuel Policy.” The report’s authors conclude it is unlikely the United States will achieve several of the goals specified in the current Renewable Fuel Standard (RFS2) by 2022 without significant advancements in technology and revised policy. And that’s not all. The report also raises serious questions about the environmental and economic benefits of biofuel development.
Shortly after the report appeared though, critics including biofuel industry groups, the 25x ’25 Alliance and Agriculture Secretary Tom Vilsack challenged the report’s validity and questioned its conclusions.
Major findings in the report include:
- Absent major technological innovation or policy changes, the RFS2-mandated consumption of 16 billion gallons of ethanol-equivalent cellulosic biofuels is unlikely to be met in 2022.
- Only in an economic environment characterized by high oil prices, technological breakthroughs, and a high implicit or actual carbon price would biofuels be cost-competitive with petroleum-based fuels.
- RFS2 may be an ineffective policy for reducing global GHG emissions because the effect of biofuels on GHG emissions depends on how the biofuels are produced and what land-use or land-cover changes occur in the process.
- Absent major increases in agricultural yields and improvement in the efficiency of converting biomass to fuels, additional cropland will be required for cellulosic feedstock production; thus, implementation of RFS2 is expected to create competition among different land uses, raise cropland prices, and increase the cost of food and feed production.
- Food-based biofuel is one of many factors that contributed to upward price pressure on agricultural commodities, food, and livestock feed since 2007; other factors affecting those prices included growing population overseas, crop failures in other countries, high oil prices, decline in the value of the U.S. dollar, and speculative activity in the marketplace.
- Achieving RFS2 would increase the federal budget outlays mostly as a result of increased spending on payments, grants, loans, and loan guarantees to support the development of cellulosic biofuels and forgone revenue as a result of biofuel tax credits.
- The environmental effects of increasing biofuels production largely depend on feedstock type, site-specific factors (such as soil and climate), management practices used in feedstock production, land condition prior to feedstock production, and conversion yield. Some effects are local and others are regional or global. A systems approach that considers various environmental effects simultaneously and across spatial and temporal scales is necessary to provide an assessment of the overall environmental outcome of increasing biofuels production.
- Key barriers to achieving RFS2 are the high cost of producing cellulosic biofuels compared to petroleum-based fuels and uncertainties in future biofuel markets.