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Biofuels remain heavily subsidized, even as environmentalists turn against them

Government regulators consider biofuels an integral part of cutting greenhouse gas emissions. A growing number of environmentalists and academics are challenging that idea.

(CN) — Like most cities in southeast Los Angeles County, Paramount is small — less than five square miles — and heavily industrial. The Zamboni company is headquartered in Paramount, and makes its eponymous ice resurfacing vehicles here. Surrounded on all sides by three freeways and a state highway, and bisected by two sets of intersecting heavy rail tracks, hundreds of trucks and trains barrel through the square-shaped city every day.

There used to be an oil refinery here too, only it shut down in 2011. Just three years later, it was reborn as a biodiesel refinery, processing thousands of barrels of vegetable oils and beef tallow — leftover beef fat — into biodiesel and jet fuel. When, in 2016, United Airlines announced, to great acclaim, that it was running the world's first "100% sustainable" passenger flight, the jets were powered with fuel from the AltAir refinery in Paramount.

Now, World Energy, which purchased AltAir in 2018, wants to expand the Paramount refinery. Whereas now the plant processes 3,500 barrels of material, the new permit would allow it to process 25,000 barrels of feedstock, a seven-fold increase.

One would think this would be cause for celebration among environmentalists. Biodiesel is, after all, considered to be "carbon neutral" by the federal government. Even though burning biodiesel releases the same amount of carbons into the air as burning regular old petroleum-based gasoline, the government considers biofuel to be less carbon intensive because while the feedstock is growing, the plants are taking out carbon dioxide from the air. Champions of biofuel liken it to a closed loop: the plants suck in carbon dioxide as they grow, then spit carbon dioxide out when they are burned to make cars go. Hence, carbon neutral.

But the AltAir refinery's expansion is being fought against on two fronts. First, there are environmental justice advocates, who say that the refinery will make the air in the heavily industrial, low-income city even more polluted. Some of those groups have sued the city of Paramount in order to block the refinery's expansion.

And then there's the idea that biofuels reduce greenhouse gasses, which has been challenged by a growing number of environmentalists and academics who say that the benefit of biofuels may be minuscule or even non-existent.

"It’s very difficult, scientifically, to give a simple, unambiguous answer as to whether or not biofuels are good for the environment," says John DeCicco, a research professor at the University of Michigan. "It depends on many factors."

Firstly, it depends on the source of the biofuel, or the feedstock. Some refineries, including the Paramount AltAir plant, use leftover material, like beef tallow (fat) and vegetable oil. Those materials would otherwise sit in a landfill and decay, releasing carbon. And so one could argue that turning that leftover organic matter into biofuel lowers greenhouse gas emissions. But what if you threw the beef tallow and vegetable oil into sealed drums and buried the canisters underground? Then there is no difference in emissions; you've essentially swapped petroleum underground for beef fat underground.

It gets even more complicated. Different types of land have different amounts of carbon buried underneath.

A majority of biofuel produced in the United States comes from crops — mostly corn and soybeans. Roughly 40% of all corn grown in the U.S. is turned into ethanol, a biofuel that is mixed with gasoline to comply with the country's Renewable Fuel Standard. Some of the leftover byproduct of that corn is used for other purposes as well, like cattle feed.

In 2005, a flailing President George W. Bush signed the Energy Policy Act of 2005, which, along with subsequent bills signed into law the following two years, created the Renewable Fuel Standard, which mandates a certain level of renewable fuel to be blended in with the nation's gasoline supply. The law was passed at a time of low corn prices and high gas prices, a trend which would soon reverse itself.


Both the Renewable Fuel Standard and California's version, the Low Carbon Fuel Standard, which took effect in 2011, set standards for carbon intensity of any fuel produced or imported in the country and state, respectively. If you produce fuel below the standard — that is, emitting less carbon — you can generate credits that can then be sold to other companies for money. To import or produce fuel above the standard, you have to buy credits. This market, similar to a cap-and-trade program, has created a massive economic incentive to produce biofuel — there now at least 20 biodiesel refineries in California alone — and grow corn.

"Biofuels are having a huge impact on agriculture commodity markets," says DeCicco. "Because of that, they are triggered the conversion of natural lands to croplands, which releases huge amount of carbon into the air, which more than cancels out their benefit."

A paper published in February found that in the first eight years the Renewable Fuel Standard was in place, corn prices increased by 30%, country's fertilizer usage increased by 3% to 8%, water quality degradants increased by 3% to 5%, and cropland expanded by 2.4%. Since soil turnover releases carbon into the atmosphere, the paper found that "the carbon intensity of corn ethanol produced under the [Renewable Fuel Standard] is no less than gasoline and likely at least 24% higher."

The study is not without its detractors. Madhu Khanna, a professor of  Environmental Economics at the University of Illinois, Urbana-Champaign, says the recent study overestimated both "the amount of land that was converted due to biofuels, and... the amount of carbon emissions released by that conversion."

"The disagreement about biofuels comes with disagreement over how much extra land is brought into production in response to increase demand for those products," says Bruce Babcock, a public policy professor at UC Riverside. "Under the best of circumstances, biofuels can reduce greenhouse emissions by a very modest amount relative to gas and diesel."

So why does both the U.S. and California governments incentivize the production of biofuel?

"The primary reason we have biofuels is the capture, basically, of federal policy by midwestern farm groups," says Babcock. "There’s no rational basis for the government to subsidize the industry."

It's hard to say exactly how much money the biofuel industry receives in subsidies. DeCicco guesses the industry has received at least tens of billions, if not hundreds of billions of dollars over the last 15 years.

By now, most environmentalists have turned away from biofuels, advocating instead for electric cars and trucks, with electricity to be generated by wind and solar.

"Years ago, before electric vehicle technologies had taken off, some of us thought biofuels might be better than oil," says Daniel Barad, a senior policy advocate at the Sierra Club California. "Now that there really are viable zero emission vehicles, we don’t really see the need for biofuels."

Others, like Khanna, say biofuels are an important interim technology.

"Electrification is going to happen, but there’s still a long intermediate period where we need liquid fuels," says Khanna. "It’s important to find low-carbon liquid fuels."

She adds that energy crops like Miscanthus and Energy Sorghum can result in far more carbon reduction than corn.

"There’s no such thing as a perfect solution," says Joseph You, President of the Coalition for Clean Air. "I do believe that World Energy is trying to find solutions for some very complex problems — like greenhouse gas emissions from jet fuel. It's not an easy thing to solve."

David Clegern, a spokesman for the California Air Resources Board, said the state's Low Carbon Fuel Standard "has helped to displace nearly 20 billion gallons of petroleum fuel since 2011." He defends the idea that biofuels are less carbon intensive than petroleum fuel, saying that soil turnover is factored into the model used to calculate a fuel's carbon intensity.

"If you are clearing land to replace for ethanol, that is factored in there," he says. "Every step along the way has to be reported."

He also says that the board reevaluates its model every five years as part of its scoping plan, which the board is currently working on, and is set to complete by the end of the year. Some environmental groups, including the Sierra Club, are lobbying heavily against biofuels.

"We’re advocating for them to not use biofuels in the future," said Barad.

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