For over six years, the Brazilian sugarcane industry has worked collaboratively with Environmental Protection Agency (EPA) and the U.S. biofuel industry supporting the Renewable Fuel Standard (RFS). Since the beginning of the RFS program, EPA had been a strong supporter of the modest but important role Brazilian sugarcane ethanol plays supplying Americans with sustainable fuel.
In 2010, the EPA certified that Brazilian sugarcane ethanol cuts carbon dioxide emissions by more than 60 percent and designated it as an advanced renewable fuel. Following congressional intent, EPA has encouraged advanced biofuels because they are the category of renewable fuel with the greatest greenhouse gas reductions. So it came as an extraordinary shock and is deeply concerning that EPA has proposed to drastically reduce the volumes of advanced fuels for the 2014 RFS.
Slashing next year’s target for advanced biofuels is a huge step backwards from the Obama administration’s goal of decreasing greenhouse gases and improving energy security. Advanced biofuels, including Brazilian sugarcane ethanol, reduce carbon dioxide emissions by over 50 percent compared to gasoline and are a proven solution for addressing climate change. Yet, EPA’s proposed formula for setting advanced biofuel targets blatantly ignores its own estimates that 650-800 million gallons of sugarcane ethanol can be supplied to the United States in 2014.
As others in the industry will confirm, EPA’s proposal pulls the rug from under the advanced biofuels industry, not just Brazilian sugarcane producers. EPA is proposing to cut advanced biofuel volumes next year by more than 40 percent compared to the requirements written into the RFS statute. Ironically, EPA is proposing a less than 10 percent reduction to volume requirements for conventional biofuels, which include a number of grandfather facilities that may well not meet the minimum requirement of 20 percent reduction.
EPA should set renewable fuel standards that encourage production and consumption of all available advanced biofuels. Because the domestic market for American biofuels is growing rapidly. EPA originally projected that the U.S. would need to import around 660 million gallons of Brazilian sugarcane ethanol to meet the 2013 advanced biofuel standard. However, total sugarcane ethanol imports will end this year at only 450-500 million gallons – not because Brazil has exhausted its capacity for exports – but because American production of advanced biofuels is expanding quicker than EPA forecast.
Congress clearly intended to encourage greater use of advanced biofuels year over year, in order to achieve the largest greenhouse gas reductions possible. That’s why Brazilian sugarcane producers support EPA’s Option 1, which would set the advanced biofuel volume requirements based on the availability of advanced biofuels plus carryover RINs.
We also encourage EPA to consider implementation of California’s low carbon fuel standard when setting the RFS targets. The Golden State considers Brazilian sugarcane biofuels the low-carbon fuel with the best performance today and the only fuel available at commercial scale to contribute to meeting its low-carbon fuel standard. Similarly, we urge the Administration to consider the repercussions for trade policy. Europe has already assessed dumping charges on some U.S. biofuels, and the last thing the global biofuels market needs is policy reversals that flood other countries with unwanted product.
Brazilian sugarcane producers look forward to commenting further on this proposal and will continue to play an active role in the RFS rulemaking process, serving as a source of credible information about the efficiency and sustainability of sugarcane ethanol. Likewise, Brazil will continue to be a strong, dependable partner helping America meet its clean energy goals.