Posted June 24, 2009

Indirect land use impacts may not be immediately incorporated into the Renewable Fuels Standard if the verbal deal struck by U.S. House of Representatives leaders reported today holds together in the Climate Change bill, expected to be voted on Friday. Rep. Collin Peterson, chairman of the House agriculture committee, Henry Waxman, chairman of the House energy and commerce committee and Speaker of the House Nancy Pelosi have agreed there should be widespread scientific agreement linking biofuels use to land clearing in tropical countries before the U.S. EPA can impose a related greenhouse gas (GHG) penalty on U.S. biofuels.

A June 24 press release from the American Coalition for Ethanol said the agreement calls for an entity such as the National Academy of Sciences to conduct a study on whether there is a link between biofuels use in the U.S. and tropical deforestation. In the meantime, EPA would be prevented for at least five years from imposing such a GHG penalty on biofuels. At the end of five years, EPA, the DOE and USDA will all need to agree that such links occur and can be effectively predicted using computer models. Congress will have one year after such a determination to review the issue before EPA could move forward.

National Biodiesel Board Washington spokesman Michael Frohlich said Wednesday that with the agreement just verbal at the point, the NBB is cautiously optimistic. "We should know very soon," he added. Chairman Waxman has set a goal of getting the Climate Change bill to the House floor for a vote by Friday. The American Clean Energy and Security Acts, also known as the Waxman-Markey bill, would establish a federal carbon cap-and-trade program and a Renewable Portfolio Standard. Peterson had announced earlier that he was reluctant to support the climate change legislation unless Congress addressed the inclusion of indirect land use impacts in the Renewable Fuels Standard. EPA's proposed rule to implement the RFS gave soy biodiesel a devastatingly low GHG reduction score due to the incorporation of international indirect land use change impacts. The indirect land use penalty to biofuels has sparked widespread protest from industry and the scientific community that the science behind the modeling is far too full of errors to be the basis of policy.

"The NBB is very pleased with the hard work of Chairman Peterson for biodiesel," Frohlich said. "We hope the deal being reported will move through swiftly so we can have the RFS in place to provide a framework for our producers to get up to speed again."