By LINDA McGURK
Indiana Correspondent

URBANA, Ill. — Most everybody seems to agree that biofuels have a place in America’s future energy portfolio, but when it comes down to specifics, consensus among lawmakers, scientists and industry representatives is hard to come by.

What incentives should the government provide to spur investments in advanced biofuels? How does the production of renewable fuels impact land use, and how should that be tracked?
What materials qualify as biomass? During the first annual Biofuels Law and Regulation Conference at the University of Illinois in Urbana on April 24, several experts shared their take on the future of biofuels.

“The real vision for us is the climate – that’s one of the greatest challenges we’ve ever faced,” said Eli Hopson, a Washington, D.C., legislative representative for the Union of Concerned Scientists (UCS). “Biofuels must be part of that solution. But it must be done right. If we have to bulldoze our national parks to grow biofuels, that’s not going to be a happy decision. (Biofuels) must result in an actual reduction in global warming and we must not sacrifice one environmental problem for another.”

The UCS is lobbying lawmakers to use a more comprehensive model when determining the environmental impact of all fuels, not just biofuels. The Renewable Fuels Standard, which calls for the production of 36 billion gallons of biofuels by 2022, currently doesn’t assign values to different fuels depending on their global warming potential or overall sustainability, even though the Environmental Protection Agency has been working on creating such a model. “The broad perspective is missing,” Hopson said. “We want to make sure we don’t set ourselves up for using fuel that will increase climate change instead of reducing it.”

Hopson mentioned California’s Low-Carbon Fuel Standard (LCFS) as an example of comprehensive regulation that could be used as a model at the federal level. The LCFS establishes a carbon-intensity rating for each fuel, based on the estimated greenhouse gas emissions generated during the full lifecycle of the fuel. That includes emissions from production, distribution and consumption of the fuel. It also takes into account indirect land-use change, an issue that has met resistance from the biofuels industry and divided the scientific community in two opposing camps. For example, corn ethanol from the Midwest would not meet California’s new low-carbon requirements because it is linked to deforestation in developing countries.

“The land-use effects are very difficult to estimate,” said Brent Yacobucci, a specialist in energy and environmental policy with the non-partisan Congressional Research Service. But, he added, “There is interest in similar legislation at the federal level.”

The LCFS comes into effect on Jan. 1, 2011, and mandates a 10 percent carbon-intensity reduction in California’s transportation fuels by 2020.

Whereas California’s standard relies on a combination of regulation and free-market mechanisms, including emissions trading, Yacobucci said a cap-and-trade system appears to be the favored approach at the federal level, both in the Obama Administration and among key members of Congress. The European Union already has a mandatory emissions trading system in place, and in the U.S. the Chicago Climate Exchange has been trading carbon dioxide offsets on a voluntary basis since 2003.

“Volatility is the problem with a cap-and-trade system,” said Yacobucci. “In the European model, a lot of investments were made when CO2 was 30 Euros per ton. But when we figured out we were in a recession last year the price dropped like a rock because people tend to burn less gas in a recession.”

Yacobucci also said additional government incentives may be necessary to promote the infrastructure for so-called second generation biofuels, like cellulosic ethanol. Some parts of the supply chain already receive incentives, and the 2008 farm bill establishes assistance for growing, harvesting, storing and transporting biomass crops.

The problem is that the program isn’t funded, and the environment in Washington isn’t conducive to spending money on new entitlement programs right now, according to Yacobucci.

“Distribution is probably going to be the toughest nut to crack to get to a certain point,” he said. “We’re rapidly approaching the blending wall – it’s currently limited to 10 percent – and we need to have an outlet for these fuels. The EPA can only make it (a higher ethanol blend) allowable; they can’t guarantee that it gets to the consumer.”