February 5, 2010

Distillers grains credit, updated RFS positive - but concerns remain

The Environmental Protection Agency’s updated regulations implementing the expanded Renewable Fuels Standard include an important credit for distillers grains, a feed ingredient produced by corn ethanol plants, the Nebraska Corn Board said in a news release.

“We have said for many years that distillers grains is an outstanding feed ingredient that is often overlooked when it comes to corn ethanol production,” said Jon Holzfaster. “We are pleased to see EPA recognize the positive addition distillers grains brings to the table.”

Holzfaster is a corn and cattle producer from Paxton and a farmer director of the Nebraska Corn Board.

In its report, EPA noted that new research available since the initial proposal indicates that distillers grains is more efficient as an animal feed than what it had originally assumed. This means less corn is needed for animal feed. “Therefore, in our analysis for the final rule, domestic corn demand and exports are not impacted as much by increased biofuel production as they were in the proposed analysis,” EPA said.

Research into the efficiency of distillers grains was supported, in part, by the Nebraska Corn Board.

Still, the Nebraska Corn Board said concerns remain - particularly on the notion of using international indirect land use estimates.

“While we appreciate that EPA updated its models to use more current production standards for both corn and ethanol, since the efficiency of both have increased significantly over the last several years, corn-based ethanol continues to be penalized by shaky science when it comes to land use,” said Kelly Brunkhorst, the Nebraska Corn Board’s director of research.

With the land use change theory included, EPA estimated that corn-based ethanol reduces greenhouse gases 21 percent over gasoline. Without that penalty, corn ethanol would achieve a 52 percent reduction.

“While the rules are workable and provide some stability in the marketplace now, the thought that they include unscientific theories on land use change and other questionable assumptions is concerning,” Brunkhorst said.

The Nebraska Corn Board also noted that while growing the ethanol industry is important on many fronts, from environmental to energy security, EPA now needs to allow the marketplace to grow.

“We need higher ethanol blends, such as e15, available on a wide scale, and we need to continue to push for e85 and flex fuel vehicles,” Holzfaster said. “Without these advancements, ethanol will run out of space in the marketplace and we won’t be able to replace significant amounts of petroleum fuel in the future.”

EPA is currently considering allowing blends of up to e15 (15 percent ethanol), but that decision may not come for a few months. See this post.

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