Brazil and US Ethanol Spar Over California Standard

UNICAIn a court brief filed last week, the Brazilian Sugarcane Industry Association (UNICA), Brazil’s ethanol trade association, defended California’s Low Carbon Fuel Standard (LCFS) against lawsuits filed by the petroleum, trucking and ethanol industries of the United States.

“With about one in every ten U.S. cars driven in California, the largest state in the country with one of the highest carbon intensities in the world is seeking to do its share to fight climate change,” said Joel Velasco, UNICA’s Chief Representative in North America. “After exhaustive study, state officials have identified sugarcane ethanol as an important part of the solution to achieving California’s low-carbon goals, and our industry is prepared to help meet the challenge.”

Growth EnergyHowever, Growth Energy CEO Tom Buis says the Brazilian sugarcane ethanol industry is defending a flawed formula that overestimates theoretical “indirect land use change” (ILUC) penalties on U.S.-made grain ethanol – when ILUC itself has yet to be proven as fact. “The foreign interests that would stand to gain under California’s flawed low-carbon fuel standard are rushing to defend it – despite the fact that ILUC is far from certain, and despite new evidence that the California Air Resources Board’s use of a Purdue University formula estimating ILUC was wrong. And that evidence comes from the very university that designed the formula,” said Buis in a news release.

Buis notes that a recent Purdue University study shows that the formula used by California overestimates corn ethanol’s ILUC emissions by more than twice as much.

Growth Energy, in conjunction with the Renewable Fuel Association and several agricutlural organizations, are challenging California’s LCFS on grounds that the regulations violate the Commerce and Supremacy clauses of the U.S. Constitution. The case will be heard on May 26 in Federal District Court in Fresno, California.

POST UPDATE: UNICA’s Joel Velasco wrote in to comment that Growth Energy’s issues with indirect land use change “have nothing to do with the challenges before the court – the lawsuit is about whether the Constitution allows California to regulate its fuels.” Velasco says he was not defending CARB’s ILUC calculations in his quote, “In fact, CARB assesses a higher ILUC penalty on sugarcane than corn — 46 vs. 30 gram of CO2 per megajoule. We just think California has a right to regulate its fuels under the Constitution.”

9 thoughts on “Brazil and US Ethanol Spar Over California Standard

  1. The issues raised in Growth Energy’s statement regarding “indirect land use change” have nothing to do with the challenges before the court – the lawsuit is about whether the Constitution allows California to regulate its fuels.  If Growth Energy thought ARB’s rulemaking about how it measured ILUC was arbitrary or capricious, they could have sued California to redress that under California administrative law. The corn growers did not do that.  Rather, they challenged California’s LCFS as unconstitutional.  Nothing here makes ARB’s program unconstitutional.  California is simply trying to protect its rights to have access to clean fuels regardless of where they come from.  Growth Energy’s Midwest interests should respect California’s rights.

  2. California is simply protecting their domestic ethanol plants, and their domestic oil industry. While the short-term beneficiary could possibly by Brazil, the long term winner will be Pacific Ethanol.

  3. Pingback: Brazil’s Cane Industry Defends California’s Low Carbon Fuel Rules « The Sugarcane Blog

  4. Mr. Velasco….why are you pretending to support California’s “rights” when in reality your interests are only to find more markets for Brazilian ethanol? Our ethanol mandate passed by the US Congress in 2007 is entitled “The Energy INDEPENDENCE and Security Act”. That means we are trying to become independent of other nations for our energy requirements. Whether it is importing oil from the middle east or Canada, or ethanol from Brazil we are still dependent on another nation for our energy. Brazil was so concerned about this that they have now become entirely independent of petroleum for their transportation needs by building a strong domestic ethanol industry. Please respect our “right” to do the same thing!!!

  5. I am a Californian. I use a lot of American ethanol in our vehicles, including E85. I don’t want to switch to Brazilian ethanol. You can keep it for yourself or send it to Europe or Asia. There’s plenty of available marketplace. As a consumer, my vote is against Brazilian ethanol. Mr. Velasco, you’re playing with the devil when you support ARB’s original calculations or constitutionality for using corn ethanol’s unproven and arbitrary LCFS value. You have no idea how supporting a severe fallacy can come back to haunt your industry. It happens all the time that way. You need to do the right thing, what deep down inside you know to be the truth. I am going to do everything I can to convince my fellow Californian citizens to not use Brazilian ethanol if it comes to market here. We will switch to CNG, electric, fuel cell, or even gasoline (bleh!) instead if you drive out American ethanol. Please continue increasing your ethanol production (it is needed), but don’t send it here.

  6. Pingback: Biofuels Brazil » Brazil’s Cane Industry Defends California’s Low Carbon Fuel Rules

  7. Pingback: What Role Will Sugarcane Ethanol Play in the US? - Domestic Fuel

  8. Pingback: What Role Will Sugarcane Ethanol Play in the US?

  9. Pingback: What Role Will Sugarcane Ethanol Play in the US? | Big Oil Stocks