I have been working on biofuels policy for almost 18 years, and the issue of indirect land use change (ILUC) from biofuels has been a central focus that whole time. My colleagues and I have defended ILUC as a vital safeguard to address land use change from biofuels. I sent countless technical comments, I’ve written technical articles, and helped organize letters from scientists on this topic to the California Air Resources Board (CARB), the US Environmental Protection Agency (EPA) and environmental policymakers in the European Union. But the approach we’ve defended is not working as well as it should, and it is time to think about how to make land use protections stronger.
This week the CARB is holding a workshop to consider the latest science on land use change from biofuels. This is overdue, since the analysis in California’s fuel regulations has not been updated in a decade. Recent analyses find important flaws with the GTAP economic modeling framework CARB used to develop its current ILUC estimates, and an important new analysis from Chen, Sexton and Smith finds that the global growth in vegetable oil-based fuels has accelerated deforestation with very large climate impacts. Despite concerns about land use change, recent actions of the Congress and the Trump administration are poised to dramatically increase consumption of vegetable oil-based fuel in the United States. The bottom line is that land use change remains a very real problem for biofuels.
In addition to the consideration of these scientific and modeling questions, I find myself thinking about lessons learned for policy design. The Low Carbon Fuel Standard (LCFS) framework relies on adjusting lifecycle carbon intensity (CI) scores based on ILUC analysis to send market signals to discourage deforestation. This ILUC accounting framework is complex and controversial, and it has not been universally embraced by other jurisdictions. The challenges are both technical and political. The complex and opaque collection of models required to assign emissions to specific fuels leaves ample opportunity to manipulate the process to get politically motivated results. And the high stakes and political power of the relevant interests mean they can and have shaped the outcomes of the analysis. As a result, ILUC determinations are often made on political rather than technical grounds.
The lesson I take is that the complexity and opacity of the existing ILUC framework are undermining its efficacy as a land use safeguard. Studies like the one from Chen, Sexton and Smith tell us that the expansion of vegetable oil-based fuels from 2002 to 2018 was very harmful, and the most direct way to address this harm is to check further expansion of these fuels. Going forward, directly regulating the amount of vegetable oil or other resources used to make biofuels may be a more effective way to structure a policy safeguard than the current ILUC framework of adjusting CI scores.
Background
On November 6th, CARB is holding a public forum on biofuels and land use change. This workshop is a follow-up to the 2024 amendments to the LCFS. The workshop was called for in a board resolution, issued as part of the process of board approval of the 2024 amendments to the LCFS. The resolution calls for a public forum covering two major topics:
- Review the latest science on land use change and relevant models, and
- Consider how to mitigate risks of harmful land use change or food market conflicts for future updates to the LCFS.
This workshop will only tackle the first part of the board’s direction, reviewing the latest science on land use change and relevant models. The question of how best to mitigate risks, including potential changes to policy design, will have to wait for another day (hopefully soon). I’m disappointed by this omission, because policy changes are needed to effectively mitigate the harm caused by the massive ongoing expansion of biofuel use.
The LCFS relies on lifecycle analysis to address concerns about land use change
The primary LCFS safeguard to address concerns about land use change is the inclusion of an estimate of land use change emissions (called indirect or induced land use change emissions or ILUC) in the carbon intensity (CI) assigned to crop-based biofuels. When this approach was initially proposed in 2007 by Alex Farrell and Dan Sperling[1], it was offered as a short-term measure until an “internationally accepted methodology for accounting for land use change” could be developed. Unfortunately, no consensus on methodology has been reached, and it appears increasingly unlikely it ever will.
In 2010 CARB convened an expert workgroup, on which I served, which informed updates to CARB’s ILUC calculations that were finalized in 2015. CARB’s ILUC analysis is based on the GTAP model, and a different version of the same model was subsequently used by the Argonne Lab to create an ILUC module of the GREET model, which projects ILUC emissions that are much lower than the original CARB study. The GTAP framework has been criticized for many technical deficiencies, and comparisons with other models suggest the GTAP approach substantially underestimates ILUC emissions.
In 2022, I served on a committee of the National Academies of Sciences, Engineering, and Medicine that reviewed Current Methods for Life-Cycle Analyses of Low-Carbon Transportation Fuels in the United States. My experience on this committee reinforced that there is not now, nor will there ever be, a consensus approach in the expert community on how to do lifecycle analysis of transportation fuel. One important finding of the committee was that CI scores used for policies like the LCFS combine two dissimilar kinds of lifecycle analysis, one focused on attributing responsibility for emissions to individual actions and actors in the biofuel supply chain (called an attributional analysis), and a second that evaluates the global consequences of a policy or change (called a consequential analysis). The resulting CI score is a hybrid that does not answer any well-defined question. An alternative approach that resolves this methodological problem is to use different types of analysis for different elements of the policy, with a consequential analysis used to shape decisions of fuel producers, and a consequential analysis used to inform safeguards that directly mitigate risks or problems the analysis identifies.
New analysis points to a major problem with vegetable oil-based fuels
Much of the debate since 2008 over land use change has focused on corn ethanol. But for the last decade, most of the growth of biofuel consumption in the US has been from vegetable oil-based biofuels like biodiesel and renewable diesel. A new analysis by Chen, Sexton and Smith from UC Davis and Berkeley finds that that using vegetable oils for biofuel accelerates tropical deforestation and increases carbon emissions. This new analysis takes a different approach than GTAP, relying more heavily on empirical data to reduce the dependence of the results on assumptions and model structure. They find that the global expansion of bio-based diesel made from vegetable oil has fueled massive deforestation in Indonesia and Malaysia. The extent of deforestation and associated emissions outweigh any climate benefits from replacing petroleum fuels.
A key finding of the analysis of Chen, Sexton and Smith is that the extent of deforestation is largely independent of which specific source of vegetable oil is used to make biofuel. This is not surprising, because vegetable oils are all close substitutes in the global food market. But this finding is in tension with the structure of ILUC implementation, which assigns differentiated ILUC scores to specific types of feedstock. For example, the LCFS assigns ILUC emissions of 71.4 g CO2e/MJ to palm oil, 29.1 g CO2e/MJ to soybean oil, and 14.5 g CO2e/MJ to canola oil and zero to inedible corn oil, used cooking oil or animal fats like tallow. These different ILUC scores create differentiated incentives that have had a big impact on the fuel market, as biofuel producers supplying California have scoured the globe to secure feedstocks with the lowest CI scores[2].
Not surprisingly, biofuel and vegetable oil producers reject the finding that using any source of vegetable oil has a similar impact on global markets. They argue it is unfair to hold midwestern soybean oil accountable for palm oil related deforestation in Indonesia. They have been successful at persuading federal policymakers to change the parameters of federal biofuel policies in a manner that favors major US crops, first by pressuring regulators to reduce ILUC values assigned to these crops and most recently by excluding consideration of ILUC from federal tax credits and restricting biofuel incentives to domestic fuels and feedstocks[3]. The resulting incentive structure of federal policies could have a big impact on California fuel markets in years to come. The strategies California has used to discourage the use of vegetable oil fuels will become less effective because of these changes in federal policy.
Fixing biofuel policies depends on the federal government, but California can help
The federal government bears the primary responsibility for the global harm caused by US biofuel policies. Federal policy has expanded the use of vegetable oil-based fuels to levels that far exceed the availability of US feedstocks to produce those fuels, with large and counterproductive impacts on global trade and land use. The result is that an increasing share of US biofuels have been coming from imported feedstocks or fuels. The administration wants US biofuel policies to focus on US fuels and feedstocks, but rather than scaling back biofuel mandates in line with domestic feedstock availability, they have proposed enlarging the mandates and layering on incentives for domestic feedstocks that will lead to costly and counterproductive shuffling of feedstocks and fuels.
I’ve called on the Environmental Protection Agency to scale back its biofuel policy proposal in line with a realistic assessment of feedstock availability. I also explained in a recent talk (video and slides) that because biofuels have a bigger impact on agriculture than transportation, biofuel policies should be designed with agriculture in mind. In particular, the ambition of US biofuel policies should be based on a realistic assessment of domestic feedstock availability and safeguards should ensure biofuels don’t exceed this level and expand the footprint of agriculture in the US or around the world.
California can’t fix problems caused by federal policies, but it can provide an essential laboratory for policy innovation, which is even more critical with federal science sidelined by the Trump administration. California’s LCFS model has been adopted by other states and will hopefully someday inform federal fuel policy reform. The LCFS wisely recognizes that shifting to renewable electricity for transportation is vital to phasing out petroleum and encourages all fuel producers to reduce their supply chain emissions. But before the LCFS can be a scalable model for federal fuel policy reform, California needs to grapple with the land use change challenge that has hung over the LCFS since its inception.
Learning from failed experiments, building safeguards that work in the real world
Scientists often learn more from failed experiments than they do from successes. But to learn these lessons one must acknowledge when an experiment has failed. California’s LCFS is an elegant policy that has a lot to recommend it, but its efforts to safeguard against harmful land use change have struggled. ILUC adjustments to CI scores are uncertain, technically complex, and prone to political interference. And with multiple overlapping policies affecting markets, adjustments to CI scores have an indirect and uncertain impact on land use.
The essential question policy makers must answer is how much of the vegetable oil, corn, animal fat, and other resources that can be used to make biofuels should be made available for fuel use. This requires an examination of resource availability, competing uses, impacts on land use, deforestation and food markets. With safeguards in place to avoid excessive diversion of these resources to fuel use, the LCFS can create an incentive structure that supports transportation electrification, encourages all fuel producers to reduce emissions and requires steady progress from the transportation fuel sector as a whole.
[1] Farrell, A. E, & Sperling, D. (2007). A Low-Carbon Fuel Standard for California, Part 1: Technical Analysis. UC Davis: Institute of Transportation Studies. Retrieved from https://escholarship.org/uc/item/6j67z9w6. Farrell, A. E, & Sperling, D. (2007). A Low-Carbon Fuel Standard for California, Part 2: Policy Analysis. UC Davis: Institute of Transportation Studies. Retrieved from https://escholarship.org/uc/item/8ng2h3x7
[2] The Chen, Sexton and Smith study considered the major vegetable oils, which make up the large majority of global biofuel consumption, but they did not examine fuels made from secondary fats and oils like tallow, used cooking oil or inedible corn oil. The availability of these secondary sources is much lower than vegetable oil on a global scale, and the data on their production and use is limited. But these feedstocks make up a large share of the California bio-based diesel market. The substitution that links primary vegetable oils will also occur with tallow, used cooking oil or inedible corn oil, but not in precisely the same way. These secondary fats and oils are used to make soaps and detergents or as animal feed, and when they are diverted to fuel production, they will be replaced with other resources. Over the last few years, consumption of these feedstocks for biofuel has grown so large that the indirect impacts of their use merit further study.
[3] For more details, see EPA’s Proposal to Focus Biofuel Policy on Domestic Fuels Doesn’t Add Up.