ETHANOL AND INDIRECT LAND USE

A study published in the July 2011 Biomass and Bioenergy Journal on indirect land use change (ILUC) due to biofuels production indicates that the real impact of U.S. biofuels production on ILUC domestically and internationally is negligible or nonexistent.


The study, “Indirect land use change for biofuels: Testing predictions and improving analytical methodologies” was coauthored by Drs. Seungdo Kim and Bruce E. Dale of Michigan State University. Click here for the article abstract.


“This is the first evidence-based evaluation of ILUC utilizing actual historic data, employing a “bottom-up”, data-driven, statistical approach based on individual world regions’ land use patterns and commodity grain imports,” said Dr. Roger Conway, senior partner at Rosslyn Advisors LLC and former director of the United States Department of Agriculture's Office of Energy Policy and New Uses.


Very few previous studies have attempted to find empirical evidence for or against indirect land use change from the historical data. Most previous studies relied on global economic simulations.


“Unlike most other ILUC work this study relied on very few assumptions and did not attempt to quantify nor to predict ILUC effects,” said Dale. “We searched for direct historical evidence for ILUC in relevant world areas rather than attempting to project or predict what course ILUC might take. Projecting forward can force scientists to make untestable assumptions.”


One interpretation of no ILUC effects is that U.S. crop intensification absorbed and exceeded new ethanol production demand. It is also possible that the effects of biofuels production expansion on ILUC may simply be negligible.  Past studies based on economic model assumptions often do not take into account new agricultural techniques that allow for greater crop yields on existing U.S. lands where biofuel corn is produced.


The new study used 1990 -- when the U.S. biofuels industry was very small -- as its baseline and then measured crop changes against that as U.S. ethanol production grew rapidly in subsequent years. In order to test the hypotheses that ILUC had occurred, the authors searched for actual land use change in 18 regions around the world where corn and/or soybeans are produced.


Had ILUC occurred, use of crop land and arable land would have increased while the area of natural ecosystem land would have declined. Further, grain shipments from the United States to the other regions would decline. Finally, cropland in other regions would positively correlate with changes in harvested areas for corn and soybeans in the United States. 


Using historical data to investigate real ILUC effects, the study found no statistical evidence of the changes predicted by ILUC theory in any of the 18 world regions.


“Prior modeling studies that relied on many assumptions have led to inflated projections for indirect land use change,” said Dr.Steffen Muellerof the Energy Resources Center at the University of Illinois at Chicago. “Some work has substituted other data, such as the price of corn, to project ILUC. Modeling is important, but all models need to be tested and verified.  These findings show that there is no substitute for using actual historic data when investigating ILUC.”


Because other studies based their projections on economic model assumptions rather than empirical land use data their predictions on the effects of ILUC due to increased U.S. ethanol production varied widely.

Background

Indirect land use change (ILUC) is a theory that suggests any acre of farmland used to produce biofuels in the United States results in the conversion of unfarmed land entering food or feed production in other areas of the world, and an increase of emissions from that new land.


ILUC was formally introduced to the world in a 2008 paper by environmental lawyer Timothy Searchinger. Searchinger’s paper concluded that utilizing both corn and cellulosic ethanol actually increased carbon emissions, as compared to gasoline. Previous studies found that substituting biofuels for gasoline reduced greenhouse gas emissions.


Searchinger argued that earlier analyses failed to count the carbon emissions that occur as farmers worldwide convert forest and grassland to new cropland to replace the grain (or cropland) diverted to biofuels. Searchinger’s team borrowed Argonne National Laboratory’s GREET model to postulate future disruptions to global land use caused by the growth of ethanol manufacturing for vehicle fuel. Searchinger’s team argued in its findings that, instead of ethanol use reducing greenhouse gas emission by 20 percent, as was widely accepted, total emissions were to be nearly doubled over 30 years (through 2037). This result raises concerns about the benefits of large biofuel mandates and their ability to support the growth of sustainable renewable fuel.


Many experts criticized the Searchinger results and the study led to wide discussion and debate in the scientific community. Criticisms included: the study was a theory, not based on historic data; it misused Argonne Laboratories’ GREET model; it failed to properly assess generally accepted agricultural productivity models; and it penalized U.S. industry while giving a free pass to polluters in other world areas.


Despite considerable criticism from experts, Searchinger’s study was embraced by much of the environmental community who encouraged legislators and regulators to incorporate ILUC into new renewable fuels legislation and rules. It was clear to all that doing so would harm ethanol’s market acceptance.


The U.S. Congress did, in fact, pass legislation that directed the U.S. Environmental Protection Agency to incorporate ILUC into its Renewable Fuel Standard (RFS). Soon after, the State ofCalifornia’s Air Resources Board (CARB) passed a Low-Carbon Fuel Standard (LCFS) that incorporated ILUC. CARB’s ruling was impactful because many states automatically adoptCaliforniarules without independent analysis or research (as a way to keep state government costs down). Both the EPA and CARB were persuaded to study ILUC effects further before finalizing how vehicle fuels would be evaluated for greenhouse gas emissions.


And so the EPA, California and other states saw fit to incorporate an unsubstantiated theory into rulemaking. As a result, ethanol faced the reality of losing classification as a renewable fuel nationwide. To meet its fuel standard,Californiawould import Brazilian cane ethanol over 4,000 miles of ocean – if sugar costs would only remain low – rather than freight in corn ethanol from nearby Midwest states. The U.S. ethanol industry experienced an immediate freeze to its growth and development as financial and capital markets attempted to sort out future prospects for U.S. grown ethanol.


Seungdo Kim and Bruce Dale undertook their study to shift analysis from conjecture to reality. Sufficient historical data from a high ethanol growth period existed, Kim and Dale believed,  to establish if ILUC could be measured. Prior studies, like Searchinger, relied on theoretical assumptions and not actual data. It was possible, and even probable, that reliance on theoretical assumptions led to inflated results.


The Kim and Dale study replaces theory that attempts to look into the future with data that measures that actual performance of ILUC during rapid ethanol growth. The study finds no meaningful evidence of ILUC effects. This could be due to the fact the growth in agricultural productivity met new ethanol demand or, that actual ILUC effects are simply negligible.


The results of this study call into question the scientific validity of ILUC and question the utilization of the theory in rulemaking. Domestic corn ethanol is today being penalized at the federal and state level for how it has affected agriculture in other parts of the world, even though the phenomenon cannot be detected from the actual data.