The US Biofuel Mandate Helps Farmers, but Harms the Environment

Surplus corn piled outside a farmer’s co-op storage facility in Paoli, Colorado.

If you’ve pumped gas at a U.S. service station over the past decade, you’ve put biofuel in your tank. Thanks to the federal Renewable Fuel Standard, or RFS, almost all gasoline sold nationwide is required to contain 10% ethanol – a fuel made from plant sources, mainly corn.

With the recent rise in pump prices, biofuel lobbies are pressing to boost that target to 15% or more. At the same time, some policymakers are calling for reforms. For example, a bipartisan group of U.S. senators has introduced a bill that would eliminate the corn ethanol portion of the mandate.

Enacted in the wake of the attacks of Sept. 11, 2001, the RFS promised to enhance energy security, cut carbon dioxide emissions and boost income for rural America. The program has certainly raised profits for portions of the agricultural industry, but in my view it has failed to fulfill its other promises. Indeed, studies by some scientists, including me, find that biofuel use has increased rather than decreased CO2 emissions to date.

Current law sets a target of producing and using 36 billion gallons of biofuels by 2022 as part of the roughly 200 billion gallons of motor fuel that U.S. motor vehicles burn each year. As of 2019, drivers were using only 20 billion gallons of renewable fuels yearly – mainly corn ethanol and soybean biodiesel. Usage declined in 2020 because of the pandemic, as did most energy use. Although the 2021 tally is not yet complete, the program remains far from its 36 billion-gallon goal. I believe the time is ripe to repeal the RFS, or at least greatly scale it back.

Higher profits for many farmers

The RFS’s clearest success has been boosting income for corn and soybean farmers and related agricultural firms. It also has built up a sizable domestic biofuel industry.

The Renewable Fuels Association, a trade group for the biofuels industry, estimates that the RFS has generated over 300,000 jobs in recent years. Two-thirds of these jobs are in the top ethanol-producing states: Iowa, Nebraska, Illinois, Minnesota, Indiana and South Dakota. Given Iowa’s key role in presidential primaries, most politicians with national ambitions find it prudent to embrace biofuels.

The RFS displaces a modest amount of petroleum, shifting some income away from the oil industry and into agribusiness. Nevertheless, biofuels’ contribution to U.S. energy security pales compared with gains from expanded domestic oil production through hydraulic fracturing – which of course brings its own severe environmental damages. And using ethanol in fuel poses other risks, including damage to small engines and higher emissions from fuel fumes.

For consumers, biofuel use has had a varying, but overall small, effect on pump prices. Renewable fuel policy has little leverage in the world oil market, where the biofuel mandate’s penny-level effects are no match for oil’s dollar-scale volatility.

Biofuels are not carbon-neutral

The idea that biofuels are good for the environment rests on the assumption that they are inherently carbon neutral – meaning that the CO2 emitted when biofuels are burned is fully offset by the CO2 that feedstocks like corn and soybeans absorb as they grow. This assumption is coded into computer models used to evaluate fuels.

Leading up to passage of the RFS, such modeling found modest CO2 reductions for corn ethanol and soybean biodiesel. It promised greater benefits from cellulosic ethanol – a more advanced type of biofuel that would be made from nonfood sources, such as crop residues and energy crops like willow and switchgrass.

But subsequent research has shown that biofuels are not actually carbon-neutral. Correcting this mistake by evaluating real-world changes in cropland carbon uptake reveals that biofuel use has increased CO2 emissions.

One big factor is that making biofuels amplifies land-use change. As harvests are diverted from feeding humans and livestock to produce fuel, additional farmland is needed to compensate. That means forests are cut down and prairies are plowed up to carve out new acres for crop production, triggering very large CO2 releases.

About 40% of corn produced in the U.S. is used to make ethanol.

Expanding farmland for biofuel production is also bad for the environment in other ways. Studies show that it has reduced the abundance and diversity of plants and animals worldwide. In the U.S., it has amplified other adverse impacts of industrial agriculture, such as nutrient runoff and water pollution.

The failure of cellulosic ethanol

When Congress expanded the biofuel mandate in 2007, a key factor that induced legislators from states outside the Midwest to support it was the belief that a coming generation of cellulosic ethanol would produce even greater environmental, energy and economic benefits. Biofuel proponents claimed that cellulosic fuels were close to becoming commercially viable.

Almost 15 years later, in spite of the mandate and billions of dollars in federal support, cellulosic ethanol has flopped. Total production of liquid cellulosic biofuels has recently hovered around 10 million gallons per year – a tiny fraction of the 16 billion gallons that the RFS calls for producing in 2022. Technical challenges have proved to be more daunting than proponents claimed.

Making cellulosic ethanol from plants like switchgrass is complicated and remains unaffordable despite large subsidies.

Environmentally speaking, I see the cellulosic failure as a relief. If the technology were to succeed, I believe it would likely unleash an even more aggressive global expansion of industrial agriculture – large-scale farms that raise only one or two crops and rely on highly mechanized methods with intensive chemical fertilizer and pesticide use. Some such risk remains as petroleum refiners invest in bio-based diesel production and producers modify corn ethanol facilities to produce biojet fuel.

Ripple effects on lands and Indigenous people

Today the vast majority of biofuels are made from crops like corn and soybeans that also are used for food and animal feed. Global markets for major commodity crops are closely coupled, so increased demand for biofuel production drives up their prices globally.

This price pressure amplifies deforestation and land-grabbing in locations from Brazil to Thailand. The Renewable Fuel Standard thus aggravates displacement of Indigenous communities, destruction of peatlands and similar harms along agricultural frontiers worldwide, mainly in developing countries.

Some researchers have found that adverse effects of biofuel production on land use, crop prices and climate are much smaller than previously estimated. Nevertheless, the uncertainties surrounding land use change and net effects on CO2 emissions are enormous. The complex modeling of biofuel-related commodity markets and land utilization is impossible to verify, as it extrapolates effects across the globe and into the future.

Rather than biofuels, a much better way to address transportation-related CO2 emissions is through improving efficiency, particularly raising gasoline vehicle fuel economy while electric cars continue to advance.

A stool with two weak legs

What can we conclude from 16 years of the RFS? As I see it, two of its three policy legs are now quite wobbly: Its energy security rationale is largely moot, and its climate rationale has proved false.

Nevertheless, key agricultural interests strongly support the program and may be able to prop it up indefinitely. Indeed, as some commentators have observed, the biofuel mandate has become another agribusiness entitlement. Taxpayers probably would have to pay dearly in a deal to repeal the RFS. For the sake of the planet, it would be a cost worth paying.

Written by John DeCicco, Research Professor Emeritus, University of Michigan.

This article was first published in The Conversation.

AgricultureBiofuelEconomicsPoliticsThe ConversationUniversity of Michigan
Comments ( 8 )
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  • Larry Farmer

    While I agree that there much to refine and debate related renewable fuels mandate, I am disappointed that rather than raise those points, the author chose to focus on the old talking points which contain many errors. Any damage which ethanol does to ICE engines is minor and confined to gaskets and hoses. These are easily and inexpensively replaced. Ethanol production does *not* divert corn and soybeans from the food supply. Ethanol production removes only the starch, the proteins and other nutrients are not consumed and still available. Admittedly, the products have been transformed into a less stable form, which presents logistical problems but that is not how the problem was characterized. Also, corn and soybeans are some the most energy intensive crops we produce. They are attractive merely due to their accessibility.

    We also need to be clear that ethanol is not an energy *source*, it is a form of energy *storage*, as is any liquid fuel. Energy is consumed in harvesting, processing, distributing and burning ethanol. It is not hard to imagine that net energy is negative. The question is whether it is more negative than fossil fuels? As fossil fuels are, by definition, injecting carbon from an ancient reserve into our ecosystem, it is clear that ethanol use is, fundamentally, less damaging than that of fossil fuels. How ethanol production is implemented and scaled *does* have far-reaching consequences. Let’s discuss those, rather that naively throwing out the baby with the bath water.

  • Al Budelier

    Larry Farmer’s comment said it all. Scitech daily, bless you for leaving comments on and allowing them! This way, readers at least have a chance to be informed of the opposing views. I don’t know where all those old false arguments in the main article keep coming from. Somehow, the oil companies must be sneakily injecting them into the zeitgeist of environmental advocates, much to their detriment.

  • Peter Brndorf, PE

    All of the authors points have been addressed over the years, and all are patently false, rising the the top of fake news levels. Now, they are lies.

    It is true that we should be more efficient, and using less liquid fuel would be better, but the increase in the use of liquid fuel does not equate to any rise in the use of bio fuel

  • Bobby Shirer

    “For the sake of the planet….” is there any cost that might be too much?

  • Nate

    Native grassland is not being tilled up in our area for energy production, but rather with the high profit margins with organic farming… Many CRP acres are being put back into production without having to wait 3 yrs to be certified organic.

  • Kevin Kroll

    The author conveniently omits that ethanol is also an oxogenate and octane booster which works well in today’s high compression engines. Without it refiners would have to go back to that MTBE poison which makes a far more carsenigenic footprint than ethanol which has far less emmisions. Also there isn’t more tillable land being brought into production in the US. If anything were losing land to urban sprawl and solar projects. Also how much energy is used in the fracking process. It seems the author is providing a 1 sided argument.

  • Robert S

    Being that it takes a gallon of fuel to produce a gallon of ethanol, it is a futile effort to produce it at all. Plus it is heavily subsidized by the government thanks to Sen Grassley of Iowa who was one of the genius’s who sponsored this endless circle of insanity.

  • WILLIAM PETH

    This article cast a narrow view on alternate sources for bio-fuel. As for clearing out land to offset new farms,no just not true every year many farms go under. Redistribution of farm use would more then make up.