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Corn+Soybean Digest

Senators Seek To Block EPA’s Indirect Land Use Rules

Three Midwest senators have introduced legislation that would prevent EPA from penalizing U.S. corn and soybean growers for land-use changes or potential land clearing for increased biofuel production in other countries.

Sens. Tom Harkin and Charles Grassley of Iowa and Ben Nelson of Nebraska said EPA’s proposed rulemaking for implementing the so-called Renewable Fuel Standard 2 or RFS2 would limit the U.S. production and use of biofuels required in the energy bill passed by Congress in 2007.

Their legislation, a proposed amendment to the Senate Interior-Environment Appropriations bill, would prohibit the EPA, for one year, from spending funds to include international indirect land-use change emissions in the implementation of the RFS.

In its proposed rule issued last spring, EPA said ethanol and biodiesel producers must meet higher greenhouse gas (GHG) emission standards than those for petroleum-based fuels because of the potential for increased GHG emissions from land-clearing for increased corn and soybean plantings in the U.S. and other countries.

“At this time, the data and analytic methodologies for credibly calculating international indirect land-use change emissions do not exist,” the senators said in a statement. “Because of this, including these international emissions in the EPA’s rule would put an unjust burden on the biofuels industry.”

Harkin, a Democrat and former chairman of the Senate Agriculture Committee, said, “Expanding the production and use of domestic biofuels is one of the most critical components of our strategy for reducing dependence on imported oil.

“The Renewable Fuel Standard, as revised in 2007, lays out a sound expansion trajectory. To meet our strategic goals, we must stay on that path. We have broad, solid agreement about which direct emissions should be included in lifecycle greenhouse gas emissions, and we have broad agreement on how to quantify those emissions.”

The 2007 Energy Bill, however, calls for the inclusion of indirect emissions, such as those associated with land-use changes, he noted. “This is a mistake. To put it bluntly, including international indirect emissions at this time is bad policy.”

According to Nelson, “Biofuels are an important part of the diverse energy mix that will reduce our dependence on foreign sources of energy. This amendment will stop the EPA from using inaccurate or incomplete calculations that could compromise our ability to expand production of biofuels. More complete studies need to be conducted before land use calculations can be effective.”

Grassley, a Republican, was even blunter in his assessment of the EPA proposed rule.

“The model the EPA cobbled together to measure indirect land use is far from scientific, it’s controversial and isn’t supported by the facts. EPA’s analysis for its rulemaking on RFS2 contained calculations for international indirect land-use changes. However, nowhere in the statute is the EPA required to calculate international effects.

“It defies common sense that the EPA would try to blame an Iowa farmer for the actions of Brazilian farmers and developers.”

EPA officials have indicated the agency has already reached the “highly debatable” conclusion that increasing production of biofuels in the U.S. has a significant impact on land-use changes in other countries – even though the public comment period on the regulation will remain open until Sept. 25, the senators said.

“EPA could not have fully analyzed all of the public’s analysis and comments,” said Harkin.
On March 2, 100 of the nation’s top scientists, including members of the National Academy of Sciences, wrote a letter warning that it would be a mistake to enforce a new and highly uncertain category of carbon emissions – indirect or market-mediated effects – against only biofuels. The scientists wrote that all fuels have indirect carbon effects and that these effects are not well understood or readily quantifiable.

In a related matter, the National Corn Growers Association released the results of a study that projects the cost of proposed regulations by EPA to implement the expanded Renewable Fuel Standard could reach $420 million.

The study found that the up-front cost to the ethanol industry for compliance with the new regulations could reach $30 million, with annually recurring compliance costs reaching up to $420 million, resulting in increased costs for corn growers, said Steve Ruh, chairman of NCGA’s ethanol committee.

“Paperwork has a price,” Ruh said. “At a time of economic recession, the last thing any industry needs is new regulations – especially unneeded recurring reporting requirements – that can cost up to a half-billion dollars a year.”

If an acreage trigger approach were used by the EPA, the recurring costs would be minimal compared to ongoing verification. With corn yields on the rise, a shift in corn acreage above the 2007 crop trigger is not expected at this point, and the recurring costs would be $15 million/year.
Ruh pointed out that, at the farm level, the cost of the new regulations will mainly take the form of extra management and recordkeeping time associated with the “renewable biomass” definition. It is also possible that in some geographic areas other costs will be forced down to the farmer level of the supply chain.

“Because of unnecessary paperwork, farmers also may be forced to shuffle corn among buyers in the limited situation where they might produce corn on acres that don’t meet the stringent EPA regulations,” Ruh said. “They then would resort to delivering corn from previously cultivated land to ethanol facilities, while delivering corn from newly cultivated land to other markets.”
The study was conducted by Memphis, TN-based Informa Economics.

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