Brazil’s UNICA opposes EPA’s proposed RFS changes; says sugarcane ethanol can meet volume requirements
30 July 2015
UNICA, the Brazilian Sugarcane Industry Association, this week submitted formal comments to the US Environmental Protection Agency (EPA) opposing the agency’s proposed reductions (relative to the volumes originally specified) to the Renewable Fuel Standard (RFS) volume targets for 2014, 2015 and 2016—and especially the volume target for advanced biofuels. (Earlier post.)
Four separate percentage standards are required under the RFS program: cellulosic biofuel; biomass-based diesel; advanced biofuel; and total renewable fuels. Cellulosic biofuel and biomass-based diesel categories are nested within advanced biofuel, which is itself nested within the total renewable fuel category. The advanced biofuels category contains renewable fuel other than ethanol derived from corn starch; that is derived from renewable biomass; and that achieves a 50% GHG emissions reduction requirement. This is the category in which sugarcane ethanol finds itself.
| Sugarcane ethanol production uses less than 1.5% of Brazil’s arable land and reduces lifecycle greenhouse gas (GHG) emissions by up to 90% on average compared to gasoline. |
UNICA is the largest representative of Brazil’s sugar, ethanol, and bioelectricity producers; its members are responsible for more than 50% of Brazil’s ethanol production and 60% of Brazil’s sugar production. Brazil is the world’s largest sugarcane producer and the second largest producer and exporter of sugarcane ethanol with 25% of global production and 20% of world exports. As a result of Brazil’s long-term commitment to sugarcane ethanol, Brazilian sugarcane ethanol producers have supplied the majority of the US’ undifferentiated advanced biofuels since EPA began implementing the RFS, writes UNICA’s Leticia Phillips, UNICA’s North American representative, in a blog post.
In the submission, UNICA notes that it has supported EPA’s earlier decisions implementing the RFS, and its members have provided significant volumes of sugarcane ethanol, an extremely low carbon advanced biofuel, to help obligated parties in the United States meet their RFS2 requirements. However, the association expressed concerns with EPA's proposed significant reductions of the 2015 and 2016 statutory volume requirements for advanced biofuels and total renewable fuels based on several issues.
| Brazil’s investment in sugarcane ethanol |
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| Brazil’s sugarcane ethanol producers are investing more than $3.5 billion through 2017 in new ethanol pipelines, inland waterways, and port facilities. |
| During the most recent harvest season, Brazil produced 3.3 billion gallons and 4.6 billion gallons, respectively, of anhydrous and hydrous ethanol from the 383 producing mills listed by the ANP. |
| Installed capacity is larger than the actual production, so in case of a higher demand for ethanol, Brazil is able to quickly respond to the market. |
Lowering the statutory volumes as proposed by EPA is not supported by the statue nor necessary, at least in 2016, when Brazil could have the capacity to export higher volumes of advanced biofuels, under the right market conditions. UNICA believes EPA understates the ability of Brazilian imports to assist in implementation.
EPA suggests that Brazil cannot supply the 3-4.7 billion gallons in advanced biofuels the agency calculates would be required between 2015-2016 under the RFS statutory volumes, and Brazil would be unlikely to reach such figures when its highest level of U.S. exports was 680 million gallons in 2006. UNICA counters that under the right market conditions, Brazil can produce an estimated 2 billion gallons of sugarcane ethanol for export to America in 2016, according to the Brazilian Ministry of Industry and Commerce’s Secretariat of Foreign Trade (SECEX).
EPA also lacks a proper rationale to lower the advanced biofuels and total renewable fuels volumes in the manner and amount it proposes.
EPA’s proposed reductions do not support Congressional intent and jeopardize progress toward increased use of low lifecycle GHG emission fuels.
EPAs Proposed Rule also does not support the President's Climate Action Plan nor the most recent announced bilateral agreement on climate between the United States and Brazil.
Nevertheless, if EPA continues to assert it has authority and reasonable justification to lower the statutory volumes for these fuels as it proposes, it should do so only to the absolute minimum. To this end, UNICA supports efforts to increase the annual volumes for these fuels and believes they should not be lowered any further in 2015, 2016 or beyond. Indeed, in view of statutory reset provisions, EPA should not reduce volume requirements for advanced biofuels or total renewable fuels below 20 percent in 2015 and 2016. Finally, EPA should consider changing Equivalence Values (EVs) for low lifecycle GHG emission fuels like sugarcane ethanol to spur further growth in advanced biofuels to help obligated parties meet statutory volume requirements.
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