Group Debunks ‘Food-vs-Fuel’ and Other RFS Myths

As we wait (and wait and wait and wait) for the U.S Environmental Protection Agency’s (EPA) decision regarding the amount of ethanol and biodiesel to be mixed into the nation’s fuel supply, one group is taking the time to debunk some myths that might be giving the EPA a reason to hesitate. Media Matters has issued a report debunking the “food-versus-fuel” myth, along with several possible Renewable Fuel Standard-stopping myths.

MYTH: Renewable Fuel Standards Raise Food Prices…

FACT: Ethanol Production Does Not Divert Food Or Raise Prices

CBO Report: RFS Will Not Significantly Alter Food Prices. The Congressional Budget Office (CBO) analyzed how the RFS will impact the economy beyond 2014 and determined that it will have no significant impact on food prices. The CBO also stated that if the standards were increased to meet the initially proposed requirements by 2017, it would result in increased spending on food by just one-quarter of 1 percent…

MYTH: Ethanol Will Harm Your Vehicle…

FACT: Rigorous Studies Show That Ethanol Does Not Harm Engines

DOE: Industry-Funded Study Claiming Ethanol Hurts Engines Is “Significantly Flawed.” Patrick B. Davis, the manager of the Department of Energy’s Vehicle Technologies Program, published an article critiquing the CRC study that found E15 and E20 (a gasoline blend with 20 percent ethanol) hurt auto engines. The DOE concluded that the study was “significantly flawed” because it did not establish a proper control group and that it cherry-picked vehicles “already known to have durability issues”

The report also presents plenty more facts debunking myths about how ethanol is supposed to actually be bad for the environment and how biofuels are heavily subsidized, among others.

RFA Updates Fueling A Nation, Feeding the World

An updated version of the paper “Fueling a Nation, Feeding the World,” has been released by the Renewable Fuels Association (RFA). The publication outlines ethanol’s contribution to the global food and feed supply and also contains information that RFA said disproves the “fabricated food vs. fuel” debate.

Fueling a nation“The U.S. ethanol industry has quietly evolved into one of the largest feed processing sectors in the world, generating nearly 40 million metric tons of high-protein, high-energy animal feed in the 2013/14 marketing year,” said Bob Dinneen, RFA president and CEO. “The RFA publication is a resource intended to educate policymakers and consumers about the industry’s role in producing feed, to counter the nonsensical food vs. fuel notion, and explain the benefits of ethanol production and co-products for both food and feed markets.”

The booklet outlines the co-products of ethanol production, such as distillers grain, corn distillers oil and corn gluten feed. For example, a 56-pound bushel of corn will yield 2.8 gallons of ethanol and 17 pounds of distillers grain, which is commonly fed to beef cattle, dairy cows, swine, poultry, and even fish. The handbook explains that “the feed produced by ethanol plants in 2013/14 would be enough to produce nearly 50 billion quarter-pound hamburger patties — or seven patties for every person on the planet.”

The publication concludes by stating, “Not only are U.S. ethanol producers helping to meet future demands for energy, but they are also helping to meet the increasing food and feed needs of a growing world.”

RFA will be sharing the booklet with international buyers and U.S. producers of ethanol-related co-products, such as distillers grain, at the Export Exchange taking place in Seattle, Washington October 20-22 2014.

Food Prices Still Up Despite Lower Corn Prices

With record corn production forecast this year comes lower corn prices, which makes the food versus fuel argument harder than ever to make, according to Growth Energy.

Total corn production is now projected at 14.475 billion bushels, 550 million bushels more than last year’s record, while the average price received by farmers is expected to be $3.40 per bushel, the lowest price in eight years.

Meanwhile, the United Nations Food and Agriculture Organization (FAO) reports the international food price index is down 6.0 percent over the last year, grain prices are down nearly 9 percent since 2013, but meat prices are nearly 22 percent higher than a year ago.

Domestic food prices are up 2.5 percent compared to December 2013, nearly the same as the overall Consumer Price Index, which is up 2.1 percent for the same period. But while corn and other grain prices are rapidly declining, consumer meat prices are up 11.6 percent since last December.

growth-energy-logo“The current WASDE projections and recent reports from the FAO and Bureau of Labor Statistics further confirm that there is virtually no correlation between U.S. ethanol production and consumer food prices,” said Tom Buis, CEO of Growth Energy. “Corn prices are below the cost of production for most farmers, and ethanol is selling approximately $1.00 per gallon less than the gasoline on the wholesale marketplace.”

“As integrated livestock and poultry companies brag about their record profits and margins to their stockholders and investment bankers, the Turkey Federation, National Chicken Council and The National Council of Chain Restaurants, all allies of Big Oil, continue their campaign to intentionally mislead Americans about the cause of rising food prices in the U.S,” Buis added.

Ethanol Report: Ethanol Production, RFS & EPA

ethanol-report-adIn this edition of the Ethanol Report, Renewable Fuels Association (RFA) president and CEO Bob Dinneen discusses ethanol production for the year so far, new Renewable Fuel Standard (RFS) ad campaigns and gives his thoughts on the Environmental Protection Agency’s 2014 Renewable Volume Obligations that are under Office of Management and Budget (OMB) review.

In addition, he touches on record corn crop production, on why the food versus fuel debate should end and Quad County Corn Processors cellulosic ethanol production grand opening.

Ethanol Report on Ethanol Production, RFS Food EPA

Ethanol Report on Corn and Food Prices

ethanol-report-adIn this edition of the Ethanol Report, Renewable Fuels Association (RFA) Senior Vice President Geoff Cooper talks about how corn prices have fallen but food prices continue to rise, and how that shows the “food versus fuel” argument is false.

A new report from RFA compares corn prices to the price of dairy products, pork products, beef products, and poultry and egg products from January 2007 – July 2014.

Ethanol Report on Corn and Food Prices

RFA Releases Report to Debunk ‘Food v Fuel’

The Renewable Fuels Association (RFA) has released a new report today in an effort to “debunk” what they call the “fictional” food versus fuel debate. The report finds that while corn prices have dropped dramatically over the past two years, retail food prices of key foods including eggs, beef, poultry and pork have remained steady or continue to increase. The report concludes, “… fluctuations in corn prices do not significantly affect consumer food prices.”

RFA Corn Prices are plungingThe report examined a number of factors that contribute to food prices including the cost of food production, pointing to Citibank’s Sterling Smith who stated, “Corn prices may have come down 50% (from their highs), but that doesn’t mean a box of corn flakes will fall 50% in price. Much of the price of food comes from the processing and movement of food…” Additionally, the report also highlighted the role of crude oil in retail food prices, finding that “…every step in the food supply chain is significantly affected by energy costs—especially crude oil.”

The report also compared corn prices to the price of dairy products, pork products, beef products poultry products and egg products from January 2007 – July 2014. Report findings include:

Retail prices for key dairy items like milk and cheese have been largely unresponsive to changes in corn prices. In fact, since January 2011, milk and cheese prices have been negatively correlated to corn prices, meaning retail milk and cheese prices have tended to move in the opposite direction of movements in corn prices.

  • Retail prices for items (like chicken legs, frozen whole turkey, fresh whole chicken) have risen steadily and smoothly since 2007. Wide swings in corn prices did not interrupt or affect the gradual trend toward higher prices for these items.
  • Retail prices for pork products have not shown any meaningful relationship to corn prices over the past seven years. It is well documented that the recent acceleration in pork and bacon prices has been driven by piglet casualties resulting from Porcine Epidemic Diarrhea virus (PEDv). These retail price increases have occurred at a time when corn prices have been plunging.
  • Retail ground beef prices have steadily and smoothly trended higher over the past seven years, showing no obvious response to wide swings in corn prices.

“The food vs. fuel folks screamed to high heaven when the price of corn rose during the drought and immediately blamed high corn prices and ethanol for food price increases,” said Bob Dinneen, RFA president and CEO. “However, these same critics remain suspiciously quiet now that corn prices have dropped, but retail food prices aren’t dropping along with them. The food vs. fuel argument is just another misguided attack on biofuels and the Renewable Fuel Standard, which is reducing foreign oil dependence, lowering gas prices for consumers, and revitalizing rural America.”

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.