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1 National-Academies.org Newsroom Page 1 of 4 NATIONAL ACADEMY OF SCIENCES Catowtris Members Newsroom Congressional Affairs Sponsors 'Teachers & Students Careers Giving NATIONAL ACADEMY OF ENGINEERING INSTITUTE OF MEDICINE Contact Us I Current Operating Status Home About Us Organization Events & Activities Reports & Publications Oct. 12, 2011 CIFFICE OF NEVV5 ;( C' Media Contacts 111 Back I Home News Release Archive Media Vipsheet Multimedia Presidents' Corner Communications Awards FAQ Date: Oct. 4, 2011 FOR IMMEDIATE RELEASE NATIONAL ACADEMY OE SCIENCES NATiC)NAt ACADEMY OF ENGINEERING INSTITUTE OF MEDICINE MIES CERTAIN BIOFUEL MANDATES UNLIKELY TO BE MET BY 2022 UNLESS NEW TECHNOLOGIES, POLICIES DEVELOPED WASHINGTON It is unlikely the United States will meet some specific biofuel mandates under the current Renewable Fuel Standard by 2022 unless innovative technologies are developed or policies change, says a new congressionally requested report from the National Research Council, which adds that the standard may be an ineffective policy for reducing global greenhouse gas emissions. Achieving this standard would likely increase federal budget outlays as well as have mixed economic and environmental effects. In 2005, Congress enacted the Renewable Fuel Standard as part of the Energy Policy Act and amended it in the 2007 Energy Independence and Security Act. The amended standard mandated that by 2022 the consumption volume of the renewable fuels should consist of: 15 billion gallons of conventional biofuels, mainly corn-grain ethanol; 1 billion gallons of biomass-based diesel fuel; 4 billion gallons of advanced renewable biofuels, other than ethanol derived from cornstarch, that achieve a lifecycle greenhouse gas threshold of at least 50 percent; and 16 billion gallons of cellulosic biofuels produced from wood, grasses, or non-edible plant parts -- such as from corn stalks and wheat straw. Except for biodiesel, these volumes are measured in ethanol units. The committee that wrote the report said that production of adequate volumes of biofuels are expected to meet consumption mandates for conventional biofuels and biomass-based diesel fuel. However, whether and how the mandate for cellulosic biofuels will be met is uncertain. Currently, no commercially viable biorefineries exist for converting cellulosic biomass to fuel. The capacity to meet the renewable fuel mandate for cellulosic biofuels will not be available unless the production process is unexpectedly improved and technologies are scaled up and undergo several commercial-scale demonstrations in the next few years. Additionally, policy uncertainties and high costs of production may deter investors from aggressive deployment, even though the government guarantees a market for cellulosic biofuels up to the level of the consumption mandate, regardless of price. Greenhouse Gas Emissions The extent to which using biofuels rather than petroleum will reduce greenhouse gas emissions is uncertain, the report says. How biofuels are produced and the changes in land use or land cover that occur in the process affect biofuels' impact on such emissions. Dedicated energy crops will have to be grown to meet the mandate, which will probably require conversion of uncultivated land or the displacement of commodity crops and pastures. If the expanded production involves removing perennial vegetation on a piece of land and replacing it with an annual commodity crop, then the land-use change would incur a one-time greenhouse gas emission from biomass and soil that could be large enough to offset benefits gained by displacing petroleum-based fuels with biofuels over subsequent years. Such land conversion may disrupt any future potential for storing carbon in biomass and soil. In addition, the renewable fuel standard can neither prevent market-mediated effects nor control land-use or land-cover changes in other countries. Economic Effects Only in an economic environment characterized by high oil prices, technological breakthroughs, and a high implicit or actual carbon price would biofuels be cost-competitive with petroleum-based fuels, the committee concluded. The best cost estimates of cellulosic biofuel are not economical compared with fossil fuels when crude oil's price is $111 per barrel. Furthermore, absent major increases in agricultural yields and improved efficiency in converting biomass to fuels, additional cropland will be required for growing cellulosic feedstock. This could create competition among different land uses and, in turn, raise cropland prices. In addition, achieving the renewable fuel standard would increase the federal budget outlays, mostly as a result of increased spending on grants, loans, loan guarantees, and other payments to support the development of cellulosic biofuels and foregone revenue as a result of biofuel tax credits. Moreover, nutritional and other income assistance programs are often adjusted for changes in the general price level. If food retail prices go up, expenses could increase for the Supplemental Nutrition Assistance Program and Special Supplemental Assistance Program for Women, Infants, and Children, as well as for much larger income assistance programs, such as Social Security, military and civilian retirement programs, and Supplemental Security Income Program. Nevertheless, given that biofuels are only one of hap ://www8.nationalacademies. org/onpinews/newsitem.aspx?recordid /12/2011

2 National-Academies.org I Newsroom Page 2 of 4 many factors affecting food retail prices, it will be hard to attribute any future increases in program costs to the standard alone. Environmental Effects Although biofuels hold potential for providing net environmental benefits compared with using petroleum-based fuels, specific environmental outcomes from increasing biofuels production to meet the renewable fuel consumption mandate cannot be guaranteed. The type of feedstocks produced, management practices used, land-use changes that feedstock production might incur, and such site-specific details as prior land use and regional water availability will determine the mandate's environmental effects, the report says. Biofuels production has been shown to have both positive and negative effects on water quality, soil, and biodiversity. However, air-quality modeling suggests that production and use of ethanol to displace gasoline is likely to increase air pollutants such as particulate matter, ozone, and sulfur oxides. In addition, published estimates of water use over the life cycle of corn-grain ethanol are higher than petroleum-based fuels. Barriers and Opportunities Key barriers to achieving the renewable fuel mandate are the high cost of producing cellulosic biofuels compared with petroleum-based fuels and uncertainties in future biofuel markets, the report finds. Biofuel production is contingent on subsidies, the nature of the mandate, and similar policies. Although the mandate guarantees a market for the cellulosic biofuels produced, even at costs considerably higher than fossil fuels, uncertainties in enforcement and implementation of the mandated levels affect investors' confidence and discourage investment. To reduce costs of biofuels, the committee suggested carrying out research and development to improve feedstock yield and increasing the conversion yield from biomass to fuels. The study was sponsored by the U.S. Department of Agriculture, U.S. Department of Energy, and U.S. Environmental Protection Agency. The National Academy of Sciences, National Academy of Engineering, Institute of Medicine, and National Research Council make up the National Academies. They are independent, nonprofit institutions that provide science, technology, and health policy advice under an 1863 congressional charter. Panel members, who serve pro bono as volunteers, are chosen by the Academies for each study based on their expertise and experience and must satisfy the Academies' conflict-of-interest standards. The resulting consensus reports undergo external peer review before completion. For more information, visit A panel roster follows. Contacts: Jennifer Walsh, Media Relations Officer Shaquanna Shields, Media Relations Assistant Office of News and Public Information ; newsanas.edu Pre-publication copies of Renewable Fuel Standard: Potential Economic and Environmental Effects of U.S. Biofuel Policy are available from the National Academies Press; tel or or on the Internet at Reporters may obtain a copy from the Office of News and Public Information (contacts listed above). Division on Earth and Life Studies Board on Agriculture and Natural Resources Board on Energy and Environmental Systems Committee on Economic and Environmental Impacts of Increasing Biofuels Production Lester B. Lave 1 (chair, deceased) and Tepper School of Business Carnegie Mellon University Pittsburgh Ingrid C. Burke (co-chair) Haub School and Ruckelshaus Institute of Environment and Natural Resources, and Department of Botany University of Wyoming Laramie Wallace E. Tyner (co-chair) James and Lois Ackerman of Agricultural Economics, and Co-director Center for Research on Energy Systems and Policy Purdue University West Lafayette, Ind. Virginia H. Dale Center for Bioenergy Sustainability, and Corporate Fellow Environmental Sciences Division Oak Ridge National Laboratory Oak Ridge, Tenn. 10/12/2011

3 National-Academies.org I Newsroom Page 3 of 4 Kathleen E. Halvorsen Associate of Natural Resource Policy Michigan Technological University Houghton Jason D. Hill Assistant Department of Bioproducts and Biosystems Engineering University of Minnesota St. Paul Stephen R. Kaffka California Biomass Collaborative, and Extension Specialist Department of Plant Sciences University of California Davis Kirk C. Klasing of Animal Nutrition Department of Animal Science University of California Davis Stephen J. McGovern Consultant PetroTech Consultants Mantua, N.J. John A. Miranowski of Economics Iowa State University Ames Aristides A.N. Patrinos President Synthetic Genomics Inc. La Jolla, Calif. Jerald L. Schnoor 2 Allen S. Henry Chair in Engineering and Co-director Department of Civil and Environmental Engineering University of Iowa Iowa City David Schweikhardt Department of Agricultural, Food, and Resource Economics Michigan State University East Lansing Theresa L. Selfa Assistant Department of Environmental Studies State University of New York College of Environmental Science and Forestry Syracuse Brent L. Sohngen Department of Agricultural, Environmental, and Development Economics Ohio State University Columbus J. Andres Soria Assistant of Wood Chemistry School of Natural Resources and Agricultural Science University of Alaska Palmer RESEARCH COUNCIL STAFF Kara Laney Study Co-director Evonne Tang Study Co-director 1 Member, Institute of Medicine 2 Member, National Academy of Engineering 10/12/2011

4 Grassroots Enterprise Action Alert Page 1 of 2 NATIONAL NEWS BOARD Biodiesel Industry Statement on Renewable Fuel Study FOR IMMEDIATE RELEASE Oct. 4, 2011 Contact: Ben Evans/NBB / bevansabiodiesel.org Biodiesel Industry Statement on Renewable Fuel Study NBB VP Steckel Comments on National Research Council Report WASHINGTON - Anne Steckel, vice president of federal affairs for the National Biodiesel Board, made the following statement regarding the report released Tuesday from the National Research Council on the Renewable Fuel Standard: "We were pleased to see the authors reaffirm that biodiesel is an Advanced Biofuel that can meet the biomass-based diesel targets under the EPA's Renewable Fuel Standard (RFS2). In fact, biodiesel - as an Advanced Biofuel under RFS - is also well-positioned to help fill the program's general volume requirement for Advanced Biofuels. We agree with the authors that biofuels must be produced in a sustainable way to achieve our goals of improving the environment, reducing U.S. dependence on imported oil, and creating jobs. We believe the biodiesel industry is doing just that by displacing nearly 1 billion gallons of petroleum diesel this year while supporting some 31,000 jobs across the country. We were happy that the authors recognized a wide variety of environmental and economic benefits from biodiesel. For example, they noted that soy biodiesel_ about half of U.S. biodiesel production_ has a positive impact on livestock feed prices, helping hold down costs. This is because only the oil - which accounts for about 18 percent of a soybean - can be used for fuel, and the highly nutritious soybean meal is used for feed. The report also reaffirmed that biodiesel significantly reduces particulate matter and other harmful tailpipe emissions when compared to petroleum diesel. Regarding greenhouse gases, the report again makes clear that there are significant uncertainties surrounding the hypothetical modeling used to calculate indirect land-use change for biofuels. We believe the evidence demonstrates that biodiesel compares very favorably when compared to petroleum, as the EPA found in its most recent analysis, which shows that biodiesel reduces greenhouse gas emissions by 57 percent to 86 percent, depending on the feedstock used. Biodiesel is currently the most diverse fuel in the world, made from a wide variety of resources including secondary-use agricultural oils, animal fats and recycled cooking grease. It is the only fuel produced on a commercial-scale across the country that meets the EPA's standards as an Advanced 10/11/2011

5 Grassroots Enterprise Action Alert Page 2 of 2 Biofuel." To learn more about biodiesel, and for the most recent research on issues such as water use and land impacts, please visit G rassnx)ts Oat PPArt/ RenewableFuelStudy.htm 10/11/2011