U.S. ethanol production

By Susanne Retka Schill | September 08, 2008
The ethanol industry is on track to meet the 9 billion-gallon renewable fuels standard (RFS) in 2008, despite the threat of a waiver request submitted in April. In August, the U.S. EPA denied the request from Texas Gov. Rick Perry to reduce the RFS requirement set forth in the Energy Independence & Security Act of 2007 by 50 percent.

Currently, 175 ethanol plants in the United States have a total production capacity of 10.57 billion gallons. In late August, the U.S. Energy Information Administration released its oxygenate report, which stated that ethanol facilities produced 17,544 barrels of ethanol in June, bringing the year's production total to 4.25 billion gallons so far. However, the RFS isn't a production mandate but rather a consumption mandate that applies to refiners, blenders and importers of fuels.

For 2009, the RFS calls for 10.5 billion gallons of conventional biofuel and 600 million gallons of advanced biofuel, which includes 500 million gallons of biomass-based diesel and 100 million gallons of undifferentiated advanced biofuel. The industry should have no problem meeting the increased conventional biofuel standard, especially with another 3 billion gallons of capacity under construction. However, the advanced biofuel category presents a new issue for the industry. Advanced biofuels in the legislation are defined as anything other than corn-starch-based ethanol that achieves a 50 percent greenhouse gas (GHG) emission reduction when compared with fossil fuels. Thus, there is the potential for existing ethanol plants using feedstocks other than corn to have their production qualify for the advanced biofuels category. Ethanol plants that use both corn and milo for feedstocks may qualify, but the proportion of milo used isn't clearly known.

Note: measured in billion gallons
Source: Renewable Fuels Association

Whether the ethanol produced by those plants will qualify as advanced biofuels by meeting the 50 percent GHG reduction target will depend on the methodology chosen by the EPA to calculate GHG emissions. "The EPA is still working on its GHG criteria," said Matt Hartwig of the Renewable Fuels Association. "The ethanol industry remains intimately involved. This is important work as it will likely inform debate about future low-carbon legislation."

Questions still remain as to whether the cellulosic ethanol projects currently under development will be on line and producing enough ethanol to meet the 2010 RFS, which calls for 100 million gallons of cellulosic biofuel to achieve 60 percent GHG reductions. The EISA legislation gives the EPA the authority to lower the RFS targets and adjust the GHG reduction targets if the requirements can't be met. For example, cellulosic biofuels that don't meet the 60 percent GHG reduction target can be counted as advanced biofuels if they meet the 50 percent target.