The LCFS as drafted proposes including indirect land use change enforcement against biofuels, although not for other transportation fuels. The proposed inclusion of ILUC is controversial. Last year, more than two-dozen advanced biofuel companies, joined by researchers and investors under the aegis of the New Fuels Alliance, submitted a letter to the California Air Resources Board (ARB) questioning ARB’s intent to include ILUC—or any kind of indirect effects enforcement against biofuels—as part of the regulation. (Earlier post.)

That letter, signed by 25 biofuel company executives and CEOs, investor Vinod Khosla, and Dr. Frances H. Arnold, noted that the biofuels industry generally supports indirect effects research, including its subset indirect land use change, but warns that enforcing indirect effects prematurely or in a piecemeal way would be catastrophic for advanced biofuel development.

The New Fuels Alliance emphasized that there are two distinct categorical problems with the draft regulation: (1) the public policy decision to enforce indirect effects of any kind is unprecedented, was not ordered by the Governor or the Legislature, and has not been publicly vetted; and, (2) the science of “indirect land use change” is extremely imprecise, and is therefore unreasonably dependent on the assumptions made by ARB staff.

The latest missive to Chairman Nichols argues:

We encourage you to investigate and include significant direct and indirect emissions from all fuels, including conventional petroleum, heavy oils, natural gas for transportation, oil sand-based fuels, and the range of fuels used to power electrified transportation, consistent with the best available science. However, you should not delay inclusion of known sources of emissions, including indirect emissions from biofuels, pending discovery of potential effects from other fuels.

There are uncertainties inherent in estimating the magnitude of indirect land use emissions from biofuels, but assigning a value of zero is clearly not supported by the science. The data on land use change indicate that the emissions related to biofuels are significant and can be quite large. Grappling with the technical uncertainty and developing a regulation based on the best available science is preferable to ignoring a major source of emissions. Over time, greater accuracy and detail in a more refined analysis can be reflected in future LCFS rulemakings.

The need to address uncertainties applies to other areas the analysis as well, and we urge you to evaluate the increasing use of nitrogen fertilizers and herbicides associated with greater biofuel production. In particular, nitrogen fertilizers enhance the emission of nitrous oxide—a powerful greenhouse gas in Earth’s atmosphere.

To spur innovation in low carbon fuels, the LCFS must send an accurate signal to the growing clean energy market. Strategic investment decisions should be based upon the best available data of the carbon footprint of alternative fuels. Failure to include a major source of pollution, like indirect land use emissions, will distort the carbon market, suppress investment in truly low carbon fuels, and ultimately result in higher emissions.