Support of LCFS Programs Remains Mixed in Midwestern States: Panel
CHICAGO – Support for state-level low-carbon fuel programs remains mixed in the Midwest, especially with concerns around the allowance of higher ethanol blends and the need for ‘technology and feedstock neutrality,’ panelists said Wednesday at the 17th Annual OPIS RFS, RINs & Biofuels Forum.
“In Minnesota, we have seen efforts in the last couple of legislative sessions to establish a clean transportation standard. I think why we haven’t seen that get across the finish line, from my perspective, is two components: one is bipartisanship and the other is technology and feedstock neutrality,” said Minnesota Biofuels Association Executive Director Brian Werner.
The panelists highlighted the current limitations of state-level low carbon fuel standards for ethanol and argued that the technology for ethanol production and blending, such as E15 (a gasoline blend containing 15% ethanol), is widely established compared to alternative fuels that require new distribution infrastructure and supply chains.
“State-level LCFS programs work pretty good for renewable diesel and biodiesel. We’ve seen that in California, where it’s come in and wiped out the use of traditional diesel. But I love all my children, and several of my children are ethanol producers,” Iowa Renewable Fuels Association Executive Director Monte Shaw said.
Beyond the promotion of E15, Shaw explained that the skepticism of state-level low-carbon fuel standards is rooted in the belief that ethanol should not be capped at 15%.
“When we talk about technology neutrality, it’s not really technology neutral if ethanol is capped at 15% at the gas tank. If I could wave my magic wand and make every car a flex-fuel vehicle, and then you could actually sell E85, I would be the biggest champion of a low carbon fuel standard. But as long as you cap ethanol at 15%, all you’re doing is sending for additional electrification and other things that would actually be harmful to the renewable fuels industry,” Shaw said.
In Nebraska, there is reportedly little support for a low-carbon fuel standard program due to lack of consensus among farm groups.
“After several months in my role listening to the groups talking about a low-carbon fuel standard in Nebraska, they were bold enough to say, ‘We will support this if it’s a clean liquid fuels program’ because those corn farmers need the market,” said Renewable Fuels Nebraska Executive Director Dawn Caldwell.
“Another thing that is slowing progress – at least in Nebraska, and I believe in other states – is the availability of electricity. We need reliable, affordable delivery of electricity to do any of these major projects.”
California is the only state in the U.S. where E15 fuel sales are not authorized, yet state legislation to immediately legalize the temporary sale of E15 (Assembly Bill 30) was passed unanimously by the California State Assembly and California State Senate on June 4 and Sept. 3, respectively. Upon Gov. Gavin Newsom’s approval of the legislation, E15 sales would be immediately authorized while the California Air Resources Board (CARB) and California Environmental Policy Council (CEPC) complete a review to either adopt permanent regulations for E15 or determine the fuel’s prohibition.
E15 is currently permitted for year-round sale in eight states – including Minnesota, Iowa, and Nebraska – due to an U.S. Environmental Protection Agency (EPA) action allowing summertime waivers.
The panelists continued that policies to expand ethanol use, such as approving E15 for year-round use in additional states, would not only increase support of state-level low carbon fuel standards, but also fill an immediate market need for new outlets for corn, citing low prices for the feedstock.
“The price of corn is not that much different today than it was in 1983, at the beginning of the 1980s Farm Crisis. Corn farmers need new markets,” said Werner.
“Anything that’s going to be a new market for ethanol, we’re going to be 100% supportive of.”
New Mexico became only the fourth U.S. state to enact a low carbon fuel standard (LCFS) after Gov. Michelle Lujan Grisham signed legislation in March 2024 to establish the New Mexico Clean Transportation Fuel Program (CTFP) and public hearings for the program’s proposed rule began on Monday; California, Oregon, and Washington have existing clean fuel programs.
–Reporting by Maura Hossler, mhossler@opisnet.com; Editing by Jordan Godwin,
jgodwin@opisnet.com