Despite the doom and gloom often expressed about the future of renewable fuels amid the rise of electric vehicles, ethanol’s future is bright. Yes, it looks imminent that domestic gasoline use will steadily diminish in the years ahead—a 135-billion-gallon market may become 110 billion gallons over time—and that seems like trouble for ethanol on the surface, but it’s certainly not a death knell. Beyond E10—and even E15—current  production levels can easily be maintained in a future full of EVs through the adoption of higher ethanol blends like E30, possible EV-biofuel hybrids, maintaining current exports, seizing niche opportunities like high-purity alcohol and aggressively pursuing new markets in the hard-to-electrify space like diesel and sustainable aviation fuel (SAF).

The latter opportunity, most agree, is enormous, especially if new incentives for SAF production can be modified to include corn ethanol by more fairly representing the biofuel’s real carbon intensity (CI) as well the CI diversity of different production facilities, feedstocks and associated farming practices. As we report in, “Adding Thrust To Ethanol-Based SAF,” the International Civil Aviation Organization estimates that more than 80 SAF offtake agreements have already been signed (some involving alcohol-based SAF) representing nearly 9 billion gallons of proposed, contracted-to-deliver production. The thing is, beyond a few billion gallons of SAF that will be made from existing low-CI wastes like used cooking oil, the massive quantities of feedstock needed for several more billion gallons of SAF will need to come from an almost ubiquitous source: ethanol. With companies like Southwest Airlines, LanzaJet (now backed by Bill Gates capital), Green Plains, Honeywell, BASF and others betting large on alcohol-based SAF, it’s hard to see this opportunity not achieving lift.

Incentives related to SAF production in the U.S. are multi-part and stackable. Producers can collect an attractive per-gallon tax credit ($1.25-$1.75) while picking up a premium for their bio-jet fuel in low-carbon markets like California and also generating RINs. However, questions about RINs tied to next-gen fuels like SAF made from intermediate feedstocks at a different location—like biocrude, biomass-based sugars or undenatured ethanol—were largely unanswered until the U.S. EPA clarified its provisions on biointermediates earlier this year. With that in mind, we do our best to explain the agency’s rules elucidation in “Shedding Light On Biointermediates.” 
 
We jump into a plant-level dialogue in “Strategies to Step Down Water Use,” but the story maintains a certain relevance to the low-carbon threads preceding it. While carbon intensity reduction almost always overshadows water use reduction in our headlines—perhaps because the industry has already lowered water use so much—it remains critical. Plus, with much of the world (including the Southwest U.S.) growingly water constrained, the idea of water intensity ratings could become as common as CI scores, one source tells us.
 
Finally, anchoring this issue is a nice-fitting story about two policy initiatives (one already introduced in both houses of Congress, the other a coalition-based proposal with early legs). “Advancing Policy In Parallel” stacks up the Next Generation Fuels Act with the still-budding Drive Clean Initiative, two potential approaches to backstopping the RFS in its post-2022 existence. Both efforts seek to introduce higher-level ethanol blends with related but different levers—high octane and low carbon. For unique reasons, both paths are compelling.    
Enjoy the read.

Author: Tom Bryan
President & Editor