Learning from mistakes

April 22, 2013
The US and the UK should learn from each other's mistakes with renewable transportation fuel. As the US Congress stepped toward rationalizing fuel ethanol this month, a new biofuel requirement took effect in the UK.

The US and the UK should learn from each other's mistakes with renewable transportation fuel. As the US Congress stepped toward rationalizing fuel ethanol this month, a new biofuel requirement took effect in the UK. In comparison with that of the US, the UK standard is modest, 5 vol %. But more will be needed to meet requirements of the European Union, a prospect that elicited a warning instructive on both sides of the Atlantic.

The congressional effort to repair a broken ethanol program comes in legislation sponsored by Reps. Bob Goodlatte (R-Va.), Jim Costa (D-Calif.), and others from both political parties. The bill would remove from the national Renewable Fuel Standard (RFS) the requirement for ethanol made from corn, cap the blending limit for ethanol in conventional gasoline at 10%, and make the Environmental Protection Agency calibrate requirements for ethanol from cellulosic sources to levels of existing production.

Main problems

Those moves address three of four main problems. The RFS program soon will require more ethanol than the gasoline market can use at 10% blending. Raising the blending limit to 15%, as the EPA has begun to do, jeopardizes engines. And EPA has been requiring more cellulosic ethanol than is available, albeit at levels below those envisioned by law. The RFS program thus mandates the impossible and penalizes noncompliance. That's intolerable.

The fourth problem is even worse. It's the setting by government of any requirement for any kind of energy at any level at all. Governments create costly messes when they do that. Goodlatte plans to introduce legislation that would eliminate the RFS. Although the bill probably can't be passed, it represents the real solution to a program to which the word "fiasco" doesn't do justice.

In the UK, biofuel concentrations will have to increase beyond the new level to satisfy the EU's Renewable Energy Directive and Fuel Quality Directive. A report by Rob Bailey of Chatham House, London, estimates the needed levels at 14% for ethanol in gasoline and 11% for biofuel in diesel. The ethanol number recently was 4.1% and the biodiesel figure, 1.6%.

A new report from the International Energy Agency cheers volumetric gains by renewable energy, calling the expansion "one of the few bright spots in an otherwise bleak assessment of global progress towards low-carbon energy." According to the report, providing a unit of energy emitted about the same amount of greenhouse gas in 2010 as it had in 1990. This apparent stagnation occurred despite what IEA Executive Director Maria van der Hoeven called "a boom in renewable energy over the last decade."

Or maybe it occurred because of that boom. Bailey, senior research fellow in Chatham House's Energy, Environment, and Resources Department, challenges the assumption that the renewable energy forms now in widespread use are necessarily cleaner in terms emissions of carbon dioxide. Use of biofuel from agricultural sources, he points out, "indirectly drives expansion of agriculture into areas of high carbon stock, such as rainforest or peatland, resulting in indirect lands-use change, the emissions from which may outweigh any greenhouse gas savings the biofuels are able to offer." Biodiesel from wastes such as used cooking oil and tallow perform better, Bailey says. But he adds: "The risk of indirect emissions increases at higher levels of use and may already be material."

The costs

More certain are costs. Biofuels from agricultural sources raise the level and volatility of food prices, Bailey asserts. He estimates carbon-abatement costs of biofuels at several times the $87/tonne of CO2 equivalent that the UK government estimates is necessary in transportation to meet national emissions goals. The costs to UK motorists of the new biofuel standards thus amount to about $700 million in the 2013-14 fiscal year, Bailey says. Meeting the EU obligations, he adds, would cost $2 billion/year by 2020.

Biofuels breed government folly, raise costs of food and fuel, and might do little for the environment. Mandates for them must end.