Gustafson: Was EPA's recent ruling that great for corn ethanol?

FarmForum.net
Published: Feb 25, 2010 1:13 pm
By Cole Gustafson, Biofuels Economist, NDSU Extension Service

On Feb. 2, the Environmental Protection Agency (EPA) finalized its regulations for the national Renewable Fuel Standard. The bottom line is that the EPA determined that corn grain ethanol reduces greenhouse gas (GHG) emissions by at least 20 percent and qualifies it as a conventional biofuel. The ethanol industry hailed this finding as a significant victory and a new market opportunity, while the livestock sectors stated that not much was new. Turns out both are partially correct.

One has to go back to 2007 to fully understand the market impact of the EPA's decision. In December 2007, Congress passed the Energy and Independence Security Act, which is viewed as the nation's guidepost for biofuel development. This legislation defined three specific types of biofuel: conventional, advanced and cellulosic. The difference among them is the extent to which they reduce GHG at 20 percent, 50 percent and 60 percent.

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