Much of the rhetoric surrounding the US Renewable Fuel Standard centers around the notion of home-grown fuels enhancing American energy security and independence.
That puts Leticia Phillips in a bit of a delicate situation, as she advocates for Brazilian sugar cane ethanol’s place in the US renewable fuel mix.
Phillips is the North American representative for UNICA, the Brazilian sugar cane industry association. And though lawmakers and the Obama administration have played up their support for domestically produced biofuels, Phillips said Brazilian ethanol has an ace up its sleeve: its lower life-cycle emissions, when compared to US corn-derived ethanol.
“What matters to the RFS is not where the fuel comes from, but how the fuel performs,” Phillips said in an interview. “Obviously there are folks in the domestic market who try to push that [home-grown] card to EPA or the administration, but at the end of the day, it’s about how do you score on reducing GHG emissions. We have a much stronger argument in terms of the performance of our fuel.”
Brazilian sugar cane ethanol, according to the US Environmental Protection Agency’s calculations, reduces greenhouse gas emissions by 61% compared to gasoline. Corn ethanol, meanwhile, gets a 20% GHG reduction compared to gasoline.
The EPA, which administers the RFS, has thus designated Brazilian sugar cane ethanol as an “advanced biofuel,” which has its own mandate nested within the RFS.
But under the proposed 2014 RFS that the EPA announced last Friday, the advanced biofuel mandate is slashed to 2.2 billion gallons, a drop of 550 million gallons from the 2013 mandate of 2.75 billion gallons. Many observers expect therefore that the entire advanced biofuels pool for 2014, if the RFS is finalized as is, would be filled by US biodiesel.
That has Phillips lobbying the EPA to raise the mandate.
“We’re disappointed,” Phillips said. “I don’t know that shocked is the right word, but we’re disappointed that the agency really just minimized the volumes that we can bring to the US to help with the goals of the Obama administration to fight climate change.”
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The US ethanol industry, which has generally cast a leery eye at Brazilian imports for displacing US production, says if the EPA also reverses its proposed cut to the overall biofuels mandate, US and Brazilian producers could coexist peacefully.
The EPA, citing the inability of the US market to absorb gasoline blends with more than 10% ethanol, proposed reducing the 2014 overall blending mandate to 15.21 billion gallons, 1.34 billion gallons less than the 2013 rule.
Tom Buis, CEO of US biofuels trade group Growth Energy, acknowledged that the relationship between the US and Brazilian industries is “complicated,” but he said the original intent of the RFS was to promote fuels with more than 10% ethanol, such as E15, a 15% blend of ethanol with gasoline.
“If you get E15 into the marketplace, there’s plenty of room for everyone,” Buis said. “Biofuels are better for the environment.”
So far this year, Brazil has exported about 400 million gallons of sugar cane ethanol to the US, Phillips said. Not much more Brazilian ethanol is likely to arrive in the US, as the rest of the advanced biofuels pool in the RFS will be filled by biodiesel production and carryover RINs from last year.
RINs are credits generated with every gallon of biofuels produced and are used by refiners to demonstrate compliance with the RFS. Surplus RINs generated in a year can be carried over to the next year.
Phillips said UNICA has indicated to the EPA that the Brazilian industry can ship between 650 million to 800 million gallons of sugar cane ethanol in 2014. But that supply will be shut out of the US market if the 2014 proposal stands.
“Brazil has proven to be a very reliable partner in the RFS and a very friendly nation to the US,” Phillips said. “If the goal of the program is really to reduce greenhouse gases and enhance energy security, why not use advanced fuel? We are concerned and disappointed and really hopeful the EPA will not finalize the proposal as it is.”
The post It isn’t only corn: Brazilian sugar cane ethanol worries about changes in RFS appeared first on The Barrel Blog.