Ag Subcommittee Hears Pros and Cons of RFS

glauber1The food versus fuel debate arose once again in front of Congress. At last week’s U.S. House Ag Subcommittee hearing in Washington, D.C., opponents and proponents of the Renewable Fuels Standard presented their arguments on the RFS and its impact on the livestock industry.

One of the biggest opponents of the RFS is the poultry industry. Their members argued that ethanol has forced up feed prices that keeps them from expanding operations and fulfilling consumers’ needs to have a cheaper alternative to beef and pork, calling the RFS “broken beyond repair.” But the chief economist at the U.S. Department of Agriculture, Dr. Joseph Glauber, said while ethanol initially did have an impact much bigger factors forced up the price of feed.

“Certainly, the ramp up [in ethanol production] we saw from 2005 to 2010 had a big impact on corn prices, but we also saw a big increase in energy prices, so it’s not the only thing going on,” he told the committee.

In fact, during that same ramp-up period, petroleum prices shot up to record levels, and RFS proponent, Roger Johnson, President of the National Farmers Union, said the agriculture industry should be united for renewable fuels.

“The World Bank found that crude oil is the number one determinant of global food prices. We should reduce our dependance on oil consumption in order to be more food secure, and biofuel production is an excellent way to do that,” adding that pitting the biofuels industry against the livestock growers is counter-productive.

The bottom line, according to Glauber, is that biofuels are important, and they’re here to stay.

“Corn-based ethanol is a vibrant industry and is competitively priced against gasoline, and producers will continue to produce ethanol from corn as long as profit margins are there. And profit margins have been there.”

DF Cast: Lawmakers Listening to Ethanol Advocates

Ethanol backers got their voices heard during the recent American Coalition for Ethanol (ACE) Biofuels Beltway March in Washington, D.C. And at least some lawmakers were listening.

In this edition of the Domestic Fuel Cast, we talk to Rep. Rodney Davis (R-IL), Sen. Mike Johanns (R-NE), and Sen. John Thune (R-SD), who met with ACE and its supporters and all expressed their backing of efforts to keep renewable fuels, especially ethanol, in the forefront of federal policies.

Listen to what they had to say after they listened to ACE: Domestic Fuel Cast - Lawmakers Meet with Ethanol Advocates

You can also subscribe to the DomesticFuel Cast here.

2014 ACE Biofuels Beltway March photo album

Coverage is sponsored in part by Patriot Renewable Fuels

GRFA Calls for Redaction of Biofuels & Security Report

The Global Renewable Fuels Alliance (GRFA) is demanding the High Level Panel of Experts on Food Security and Nutrition (HLPE) withdraw their Biofuels and Food Security report given its flaws and their refusal to release the report’s funding sources. The organization’s call to action comes as the Committee on World Food Security’s (CFS) annual Plenary gets underway in Rome, Italy.

Screen Shot 2013-10-07 at 10.15.39 AMBiofuel industry associations representing Canada, the United States and European Ethanol producers sent a joint letter to members of the HLPE Steering Committee highlighting the numerous flaws in the reports drafting process and demanded to know the sources of funding behind it.

“It is not surprising that the final HLPE report was flawed given the secretive nature by which it was funded and the inherent biases among the appointed members of the so-called Project Team,” said Bliss Baker, spokesperson for GRFA.

The open letter released by the GRFA slammed the panel for the manner in which the project scope was finalized, the apparent disregard for stakeholder feedback provided during consultations, the opaque and secretive “external review” of the final draft report, the non-disclosure of the reports financial donors and the veiled process by which the Project Team was selected.

“It became apparent early in the process that industry concerns were being dismissed without any explanation from the HLPE,” said Baker. “It is essential in any public policy process to explain decisions for accepting or rejecting recommendations from stakeholders, but regrettably, the HLPE did not believe that an open transparent process was required.”

Equally concerning to the GRFA was the secretive way the Project Team was selected. Key stakeholders should have been allowed to participate in selecting a Project Team, said Baker, but instead the HLPE “hand-picked” its members. This “hand-picked” team did not include a single expert from the biofuels industry but instead included a known biofuels critic who was the primary author of a highly controversial theory of predicting future land use patterns that has been widely criticized.

“Effective policy is best informed with sound science and an open, transparent, deliberative process that involves the public,” added Baker. The HLPE did not adhere to any of these principles and because of these short comings the HLPE should withdraw the report at the CFS Plenary until these deficiencies are addressed. Moreover, it is imperative that the HLPE disclose the financial donors who contributed to this report.”

Renewable Fuels Fall Preview

Congress is preparing to return to work and renewable fuels will be top of mind at their return with debate still ongoing around the Renewable Fuel Standard (RFS) as well as the need to pass a bi-partisan FAARM bill before the end of September.

Fuels America recently brought together several renewable fuel experts held a call to discuss the progress the renewable fuel industry has made over the summer. In addition, the experts took a look ahead to issues that will both help and hurt the industry.

Panelists included Delayne Johnson, Quad County Corn Processors, Bob Dinneen, CEO and President of the Renewable Fuels Association (RFA), Tom Buis, CEO of Growth Energy, and Paul Bertels, Vice President of Production and Utilization, National Corn Growers Association.

Fields of Corn Photo- Joanna SchroederDinneen noted that as he traveled this summer around the Midwest how he saw fields of corn. This, he said, is undermining Big Oil’s “food versus fuel” argument that he called a “canard”. He pointed out that both the United States Department of Agriculture (USDA) and United Nations (UN) have both come out in the past few weeks with reports that food inflation is really low.

Tom Buis noted that part of what the RFS debate is about is the movement to second generation biofuels (ethanol plants are beginning to co-locate second gen technologies with first gen technologies). Everyone knew, said Buis, that when the RFS was passed, the country would have to move to higher blends to achieve the 36 billion gallon goal. He said that if Big Oil can keep the so-called blend wall from being cracked they can go to Congress and say the RFS isn’t working. However, Buis noted that as consumption of biofuels increases, investments and technology developments in second generation biofuels will increase – a move that will continue to erode Big Oil’s market share.

To learn more about the continued biofuels debate in DC, listen to the full press conference here: Renewable Fuels Fall Preview

Land Availability Should Determine Biomass Use

According to a paper published by the nova-Institute on agricultural feedstock use in industrial applications, efficiency and sustainability assessed on a case-by-case basis Global Prod Capacity by region 2015should be the sole criteria in judging the choice of feedstock used. The paper reviewed the “food versus fuel” arguments surrounding feedstocks to help shed light on the debate on how feedstocks should be used. The institute further stressed that the real issue is land availability for growing biomass for different purposes.

The paper refers to studies asserting that, even after satisfying food demand of a rapidly growing world population, enough arable land would remain available for purposes other than food production. The authors argue that the best usage of these areas is achieved by considering the land-efficiency of different crops. Studies show that many food crops are more land-efficient than non-food crops. According to the paper, they require less land to produce the same amount of e.g. fermentable sugar (commonly used in biotechnology processes) than non-food crops or so-called second generation feedstock, e.g. lignocelluloses.

“Efficiency and sustainability should be the leading criteria when selecting renewable feedstock for industrial purposes, such as the production of bioplastics,” said Hasso von Pogrell, Managing Director of European Bioplastics, embracing the paper as a welcome contribution to the discussion. “If the industry were to neglect the use of first generation feedstock at this point in time, it would do a disservice to society and the environment,” he added. “In addition to being currently more efficient, the use of food-crops for industrial purposes has the major advantage that, in times of food crisis, these crops could be reallocated to food use.”

European Bioplastics is in favor of promoting the use of second or even third generation feedstock for industrial purposes. However, as long as food crops continue in many cases 13-08 use of harvested agricultural biomassto represent the most efficient feedstock by far, discrediting their use would be misguided and a step in the wrong direction in achieving the European Commission sustainability targets.

“This often very emotional discussion needs to be steered into a more fact based direction,” continued von Pogrell. “Only two percent of the global agricultural area is actually used to grow feedstock for material production and only 0.006 percent is used in the production of bioplastics, compared to 98 percent used for food, feed and as pastures,” he concluded.

These findings echo the conclusion of a study recently published by the World Bank, according to which an increase in food prices is largely influenced by the oil price. Biofuels and, by extension, bioplastics play a negligible factor here. The study looked at food commodities such as corn, wheat, rice, soybeans and palm oil and compared commodity prices to energy prices, exchange rates, interest rates, inflation, income and a stocks-to-use ratio to determine which of these drivers had the most impact on food prices.

EU Votes to Cap Biofuel “Food” Feedstock Use

Screen Shot 2013-07-11 at 12.58.19 PMThis week the European Parliament Environment Committee voted for the European Union (EU) to cap the amount of food used as biofuels at 5.5 percent. Groups opposed to the measure want to see an end to biofuels created from “food” crops. The EU’s Renewable Energy Directive requires EU member states to use 10 percent of the road transport fuel from renewable sources by 2020. Historically, the mandate has been met with feedstocks also used to produce food (corn, wheat, soy).

The first generation cap on “agri-fuels” is an attempt to help the country transition to advanced biofuels and reduce greenhouse gas emissions resulting from indirect land use change (ILUC).

“I nonetheless think that the industry must be given time to adapt, and I shall propose a compromise to this end in plenary session,” said rapporteur Corinne Lepage (ALDE, FR) after the vote. Her first-reading report was approved by 43 votes to 26, with one abstention.

“While today’s vote for a 5.5 percent cap is better than no cap, it still means that people in the United Kingdom and Europe will put food in their cars that could have fed tens of millions of people. This is not acceptable at a time when 1 in 8 people go hungry globally,” said Anders Dahlbeck, Head of Policy at ActionAid UK.

EU Parliment copyThe EU is revising its biofuels policies and this week MEPs on the Environment committee voted on proposed amendments that will not have to be accepted or rejected by the European Parliament’s plenary session in Strasbourg in September. After that, the European Parliament will have to negotiate with the European Council (made up of EU governments) before a final revision to biofuels policies can be implemented. Continue reading

Groups React to FAO Biofuels Study

Emotions are mixed regarding the findings in a recent report published by the Food and Agriculture Organization (FAO) that was released in Rome during a meeting with ambassadors. The report found that biofuel from crops has a significant and direct impact on food prices and food availability. In response, ActionAid said the report shows how Europe’s biofuel targets are driving up food prices and increasing hunger among the world’s poorest people.

Screen Shot 2013-06-27 at 8.35.14 AMThe report comes several weeks before a final decision is made by the Environment Committee, part of the European Commission, on how much fuel will be allowed to be made from feedstocks used to produce food.

“It is a wake-up call to the EU to get its house in order on food and fuel. This means some hard work ahead for MEPs and Member States who are working on redefining EU biofuels policy,” said Anders Dahlbeck, ActionAid’s biofuels policy advisor. “However as we speak, the biofuels industry is lobbying hard against new proposals before the Parliament and Council to limit the use of food crops for biofuels. MEPs and member states must not bow to industry pressure – they must end the use of food for fuel.”

The global biofuels industry has in fact taken issue with the report and the Global Renewable Fuels Association (GRFA) says that there are several methodological and factual errors in the report including the omission of key co-products in calculating the net benefits of biofuels; the overly prescriptive policy recommendations; and the inclusion of unproven land use methodologies. It should be noted that the EU biofuels policy that is under review specifically does not take in to account indirect land use in its calculations. Continue reading

CFS Releases New Biofuels Studies

HLPE Biofuels and Security ReportSeveral new studies have been released on biofuels and investment needs of small-scale farmers released by the High Level Panel of Experts (HLPE) of the Committee on World Food Security (CFS). Report no. 5: Biofuels and Food Security finds that world biofuel production increased five-fold in the decade between 2001-2011. As a result, the report attempts to identify the impacts that biofuel policies and the development of biofuel markets are having on food security.

The report studies several specific issues including:

  • To what degree does the sector divert crops from food to fuel?
  • How does biofuel production factor into high food prices?
  • Is the biofuel development model pro-poor?
  • What are the implications for land availability and use and what do they mean for rural communities and the environment?

Report no. 6: Investing in Smallholder Agriculture for Food Security looks at how to HLPE Report Smallholder Ag,jpgpromote greater investment in small-scale agriculture. This study finds that “a vast majority of the hungry people in the world are, paradoxically, small farmers” and calls for a “new deal” for smallholder farmers. This type of farmer constitutes the majority of farm families in the world and make crucial contributions to household, national and global food security.

The report examines:

  • The diversity of smallholder agriculture in the world
  • The constraints to investments
  • What types of investments are needed at farm and broader levels

It also proposes the development of national strategies for investment in smallholder agriculture.

EU Votes In Favor of Biofuels

A proposal from the European Commission that would limit the amount of food produced from biofuels made from food crops was amended today by the European Parliament industry, research and energy committee. The Committee voted to raise the proposed cap on biofuels from 5 percent to 6.5 percent and also voted not to implement indirect land use change (ILUC) factors. According to ActionAid, this means that European countries might end up using biofuels that are worse for the climate than fossil fuels.

actionaid logoAnders Dahlbeck, ActionAid biofuels policy advisor, said, “MEPs voting in the Industry committee in the European Parliament today sent a clear signal that they are prepared to put fuel goals before hunger goals and industry interest before poor people.”

“The evidence is clear that putting food into tanks does not make sense. EU’s biofuels policy is driving food price volatility and land grabs in some of the world poorest countries. The FAO says we need 50 percent more food by 2050 so why do we keep putting it into cars?” questioned Dahlbeck.

The UN special representative on the issue of food rights and hunger, Olivier de Schutter, met MEPs this week and raised the alarm bell on the damaging impacts of the EU’s biofuels policy. In spite of this the Industry committee in the European Parliament has weakened the European Commission’s proposal to limit the amount of food that can be used for fuel.

“There is still time for MEPs to turn it around with upcoming votes in the environment committee and the plenary vote in September. Do we accept hunger in exchange of EU energy targets – targets not even tackling climate change?” asked de Schutter.

DF Cast: Creating, Not Extracting, Sugars for Biofuels

One of the big issues that continues to dog the biofuels business, especially ethanol production, is the use of food crops as fuel sources. While many have made the case that the crops can provide both food AND fuel (consider the dried distillers grains from ethanol production, for example), a New Jersey-based company thinks it has a way to remove the food part from the debate altogether.

Proterro CEO Kef Kasdin1In this edition of the Domestic Fuel Cast, we talk to Kef Kasdin, CEO of Proterro, as she tells us about her company’s method of actually creating, not extracting, sugars. You’ll be able to hear how this process makes sugar for as low as 5 cents/pound… a pretty good bargain compared to 10-20 cents/pound of more conventional methods.

You can listen to the Domestic Fuel Cast here: Domestic Fuel Cast - Proterro Creating Sugars for Biofuels

You can also subscribe to the DomesticFuel Cast here.

And you can check out the video below to get a better explanation of how the process Kasdin describes works.

REG Makes Case that Biodiesel Helps Food Supply

reg-logoApparently tired of false claims that biodiesel takes from the food supply, biodiesel maker Renewable Energy Group has put out a whitepaper that actually shows how the green fuel is helping the food supply. Biodiesel Magazine has this good summary of “Food THEN Fuel: How the American Biodiesel Industry Is Strengthening Food Security.”

“[C]ritics of biofuels have [tried] to convince the public that biodiesel is merely part of an amorphous group of energy sources that share the same alleged disadvantages,” the paper states. “Indeed, they would have the public believe that biodiesel not only depletes the food supply by creating a competing use in fuel, but that it also contributes to higher prices at the grocery store. In reality, biodiesel is playing a vital role in strengthening America’s food security and reducing rising pressures on food prices. Rather than competing with food, biodiesel production applies a “food THEN fuel” approach by adding economic value for food industry byproducts and sending economic signals to the market to produce more. Biodiesel production helps make the food and agricultural sectors more profitable, incentivizes the production of protein and generally helps keeps grocery items, like meat, from increasing in price more than they already would due to inflation and petroleum energy costs.”

Some of the facts REG cites are that soybean oil is the historic primary feedstock for U.S. biodiesel and still makes up the largest single feedstock used. With the soy oil used for biodiesel, that still leaves more than 80 percent of the bean to be made into meal for livestock, keeping feed costs down for livestock producers.

In addition, other feedstocks for biodiesel, such as animal fats and used cooking oils, have created value-added markets in those food industries to help farmers and restaurant owners make more money and allow them to them to produce even more food at cheaper prices.

Most Entertaining Panels at Ethanol Conference

As always, the Global Perspectives and Washington Insiders panels at the National Ethanol Conference were as entertaining as ever. The panels routinely feature representatives from other organizations that may not share the same viewpoint of the Renewable Fuels Association (RFA), allowing the opportunity for some interesting dialogue.

nec13-global-panelGlobal Renewable Fuels Alliance spokesperson Bliss Baker served as the moderator/referee for the global panel which featured RFA CEO Bob Dinneen; Canadian Renewable Fuels Association president Scott Thurlow; Rob Vierhout, Secretary General of ePURE; UNICA CEO Elizabeth Farina; and Poul Ruben Andersen with Novozymes A/S.

Noting the panel placement of Canadian Thurlow between Dinneen and Vierhout, Baker commented, “Some of you may be familiar with Canada’s tradition of peacekeeping,” he said. “Scott may have to assume that role of peacekeeper when we talk about our first issue” which was Europe’s trade challenge to U.S. ethanol imports. “I find it a little bizarre that we are in this spat that we are in today, attacking one another,” Baker said, throwing the floor open to Veirhout to explain “what were you thinking?”

Listen to the panel here: NEC 13 Global Panel

nec13-insdersThis year’s Washington Insiders panel included (L to R) – Marty Durbin, Executive Vice President, American Petroleum Institute; Shane Karr, Vice President, Federal Government Affairs, Alliance of Automobile Manufacturers; Louis Finkel, Executive Vice President, Government Affairs, Grocery Manufacturers Association; and James Massie, Principal, The Alpine Group (the “insider’s insider”).

Interesting exchange on the panel came between Dinneen and GMA’s Finkel regarding the impact of the Renewable Fuel Standard. Challenging Finkel’s claim that the production of corn ethanol under the RFS has had a “significant” impact on food costs, Dinneen asked if he would say that oil prices also have a significant impact on the price of food. “I don’t think it has a significant impact,” Finkel replied. “I think it has an impact on the cost of transporting our food.”

“You’re a good advocate for your industry,” Dinneen responded.

Listen to the whole panel here: NEC 13 Insiders Panel

2013 National Ethanol Conference Photo Album


2013 NEC Golf Tournament Photo Album

RFA Condems UN Biofuels & Food Security Study

Earlier this month, the U.N. Committee on World Food Security (CFS) has released a draft study on biofuels and food security with a public comment period until January 30, 2013. Yesterday, the Renewable Fuels Association (RFA) submitted comments about the report and its several policy recommendations.

maize harvest Photo: FAO/Giulio NapolitanoThe authors write, “Our report has confirmed the central role of biofuels in provoking high and volatile food prices, and therefore, we point to the fact that there is enough evidence to call in question the use of mandates/targets together with subsidies and tariffs where these artificially stimulate biofuels production. Our Report concludes, however that in the context of persistent high oil prices, biofuels from maize in the US and from sugar-cane in Brazil can be, for different reasons, market competitive. In this situation, we must advance beyond the discussion of mandates and subsidies to include mechanisms for controlling the growth of biofuels markets. The recent EU Directive has moved in this direction, and while the EPA in the US has rejected the suspension of targets, maize/ethanol has almost reached its current allocated share of the biofuels market. Policies should now be directed at ensuring that domestic ceilings are not made innocuous by the emergence of a global biofuels market.”

Geoff Cooper, RFA’s Vice President for Research and Analysis, explained that the draft report “needs substantial revision before it can be submitted for official peer review. Not only does the report fail to discuss potentially positive impacts of biofuels expansion on food security, but it also inappropriately expands the intended scope of the study, blatantly disregards input from the May 2012 consultation, fails to include a comprehensive literature review, and adopts highly questionable assumptions regarding animal feed co-products, crop yields and other factors.”

The RFA comments reflect the association’s belief that “biofuels are providing tangible benefits and positive outcomes for both the world’s farmers and consumers. Biofuels have already proven themselves as agents of economic development, environmental improvement, and social progress in many developed nations. We believe biofuels can bring the same benefits to developing nations without jeopardizing food security. In fact, biofuels have the potential to serve as an important tool in reducing food insecurity. Indeed, we agree with the U.N. Food & Agriculture Organization (FAO) that: ‘…investment in bioenergy could spark much-needed investment in agricultural and transport infrastructure in rural areas and, by creating jobs and boosting household incomes, could alleviate poverty and food [in]security.’”

You can read RFA comments in full here.

Book Review – Demystifying Food From Farm to Fork

This week I read, “Demystifying Food from Farm to Fork,” by Maurice J. Hladik. Many of you may be familiar with Hladik, an agricultural expert who has spoken at events all around the world including Commodity Classic. The goal of the book is to take a look at food production from “farm to fork”.

demystifying-food-from-farm-to-forkAs with many concepts, farm to fork can be defined in many ways. Hladik defines it as, “Pertaining to the human food chain from agricultural production to consumption. In other words, from our readers farm to my table.”

As Hladik takes the reader through the varying stages in between the planting, growing and harvesting of food through manufacturing and eventually to the table, he explained the pros and cons, addressed any surrounding controversies and presented both sides of each argument. For this I was very impressed, as many writers take the view of “it’s my way or no way”.

Hladik also points out certain areas that he says are portrayed in the media as myths. One area he addressed was that of ethanol production and food prices. He writes, “There is a widespread conviction that the use of massive quantities of corn for the production of ethanol, and to a lesser extent soy beans for biodiesel, substantially contributes to hunger throughout the world….In reality, there is enough food in the world to go around, but getting it to all those who need it is a challenge.”

He continues by writing that the world does not need all the corn and other grains that are dedicated to biofuel production, and thus corn might as well be used for this purpose (he also rightly points out that a diet solely of corn does not constitute a balanced diet). In addition, he explains during his examination of “food versus fuel” that because of the increased need for corn for ethanol, along with the fact that growers are harvesting more bushels per acre than ever before, that should the unforeseen happen, the corn can be diverted to other areas – in essence, ethanol production is “money in the bank”.

This book is very well suited to those of us who are not very familiar with agriculture, and gives the reader a good, brief introduction into all the steps it takes to deliver our food to the table.

Farm Foundation Blog: Food & Fuel for 9 Billion in 2050

How do you keep an expected world population of 9 billion people by the year 2050 fed AND meet the world’s energy needs? Our friends at Farm Foundation are taking on those challenging questions, hopefully with some good answers through their new blog, AgChallenge2050.org.

“It’s an opportunity for more people to be involved in the conversation,” said Mary Thompson, Farm Foundation’s Vice President, Communications, adding there are four key areas of consideration: role of science and technology in agriculture, farm and food policy, adaptability resistance, and human capital needs in agriculture and the food system. “We have contributors who will be twice a week posting new ideas and new perspectives in those four areas, and we will encourage all types of stakeholders to come in and be part of the conversation.”

And don’t forget, Farm Foundation has another one of their forums coming up this Wednesday, November 14th looking at what the recently completed election means to agriculture, food and rural policies. It will be held at the National Press Club in Washington, DC and webcast. Click here for more information.

Listen to Cindy’s interview with Mary here: Mary Thompson, Farm Foundation

2012 NAFB Convention Photo Album