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NEW POLICY SOLUTIONS:
RENEWABLE FUELS STANDARD
Renewable fuels, such as ethanol and biodiesel, have great potential to improve emissions from vehicles, while increasing investment, income and jobs in Midwest states. The majority of renewable fuel that is sold today is ethanol, made from corn grown in the Midwest. New technologies for producing ethanol from cellulosic materials - including grasses, trees and agricultural wastes - are on the horizon, and are likely to be more efficient than current technologies for converting corn to ethanol. And, given that cellulosic materials are often less agriculturally intensive than corn, cellulosic fuels have the potential to capture an even larger market share than corn ethanol.
Renewable Fuels Standards (RFS) require a certain percentage of fuel sold to be made from renewable resources, such as corn, soy or other biomass, rather than petroleum. RFSs help to grow the market for renewable fuels, support family-supporting wages and employment in rural agricultural communities, and in some cases also help to grow the market for flex-fuel vehicles (FFVs). The federal government enacted a RFS in 2005 that requires the country to use 7.5 billions gallons of renewable fuels by 2012. This standard has nearly been met in 2007. Energy policy discussion in both the Senate and the House have included requirements for drastically increasing the RFS in coming years. Both the House and Senate have also introduced legislation that would establish a "Low Carbon Fuel Standard" that requires fuels to have increasingly lower carbon contents in the future.
At least five states have enacted RFSs that attempt to go further in pushing the market toward renewable fuels:
- In the Senate - The Senate energy proposal would create a Renewable Fuel Standard the requires 36 billion gallons by 2022, with 21 billion gallons coming from "advanced biofuels" that have low carbon contents. It would also provide a number of incentives including grants and loan guarantess for renewable fuel production and distribution infrastructure.
- In the House - The House's draft proposal would set an "Alternative Fuels Standard" that requires at least 35 billion gallons to be used by 2025. It would also set a "Low Carbon Fuel Standard" that would require fuel distributors and retailers to sell an increasing amount of fuels that have a low carbon content, such as fuels from cellulosic materials. The proposal would also provide grants for retailers to install alternative fuel pumps, and would require the installation of pumps once market penetration of flex-fuel vehicles reaches a certain level.
- Minnesota - All gasoline sold in the state must contain 10% ethanol now, and at leasat 20% ethanol by 2013.
- California - Fuel sold in the state must have increasingly lower carbon contents in coming years. Retailers will likely be required to sell cellulosic fuels, which have lower carbon contents than gasoline or corn ethanol, in order to meet the standard.
- Iowa - Biofuels must replace 25% of all petroleum used for gasoline by 2020. Gas retailers must follow a timeline that sets thresholds for the amount of ethanol used. For large retailers, the schedule mandates: 10% by 2009, 17% by 2015, and 25% by 2020. Smaller retailers are allowed to phase-in ethanol use more slowly, starging with 6% in 2009.
- Washington - All gasoline sold in the state must include 2% ethanol by 2008. The percentage increases thereafter depending upon the amount of feedstock grown in Washington.
From an environmental perspective, increased production and use of ethanol could have both environmental benefits and disadvantages when compared with gasoline. When used in vehicles, both corn-based ethanol (made from corn kernels) and cellulosic ethanol (made from whole plants, including agricultural wastes and grasses) produce less carbon dioxide and emit fewer harmful emission like sulfur, carbon monoxide, and particulate matter than gasoline. However, production of ethanol can lead to negative environmental impacts, such as increase land needed for crop cultivation, pollution from fertilizers and pesticides, and demand for irrigation water. These impacts could have serious ramifications on the landscape and ecosystem, and would likely be far worse for corn-based ethanol than for cellulosic ethanol. So, while ethanol can lead to energy savings and emission reductions, a cautious approach needs to be taken to make sure it is produced with limited environmental impacts.
More information on Renewable Fuels Standards
- New Rules Project - Ethanol and Biodiesel Production - Focus on Scale and Cooperative Ownership
- Apollo Alliance - Renewable Fuel Standards
- State of California - The Role of a Low Carbon Fuel Standard in Reducing Greenhouse Gas Emissions and Protecting our Economy
- Clean Energy Minnesota - Securing Energy Independence
More information on the benefits and impacts of ethanol:
- Natural Resources Defense Council - Move Over, Gasoline: Here Come Biofuels
- Grist Magazine - Corn at the Right Time
- Environmental Science and Technology - How green is ethanol as a renewable fuel?
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