The California Air Resources Board adopted a resolution on Thursday that improves the prospects for the use of corn ethanol. The resolution brings the latest research on indirect land use change(ILUC) into the low carbon fuel standard(LCFS) regulation, effectively improving the greenhouse gas profile of corn ethanol. The CARB staff, the LCFS expert workgroup, and other stakeholders pushed for the new ILUC research models from Purdue University to be used over CARB’s current ILUC values in order to pass the resolution. The switch in models to Purdue’s will cut the ILUC penalty for corn ethanol almost in half by the spring of 2011.
The new resolution was received favorably amongst those in the ethanol industry for the most part. The only issue for some is why the resolution won’t take effect until midway through 2011, when the LCFS begins implementation on January 1, 2011. If CARB begins the implementation on January 1st with the current ILUC numbers rather than the Purdue numbers, most Midwest corn ethanol that is currently used in California will either generate deficits over the first half of the year, or it won’t be used at the beginning of the year.
But how does the resolution effect other fuels? Under the resolution the ILUC numbers for sugar ethanol and soy biodiesel are expected to change. High-carbon intensity crude oils are expected to be re-examined. Gasoline is expected to not look as good as corn ethanol with the new ILUC numbers. So for 2011 parties are required to reduce the carbon intensity of their fuels by 0.25% and now that corn ethanol scores better than gasoline, it will make refiners less likely to mix 10% ethanol with gasoline to reduce the carbon intensity.