Special Report-How U.S. Regulators Allow Ethanol Plants to Pollute More Than Oil Refineries


 Green Plains' Otter Tail ethanol manufacturing plant is seen at night

 in Fergus Falls, Minnesota, U.S., October 24, 2020. Picture taken October 24, 2020. 

REUTERS/Bing Guan/

By Leah Douglas

 Reuters
Sept. 8, 2022

WASHINGTON (Reuters) - In 2007, the U.S. Congress mandated the blending of biofuels such as corn-based ethanol into gasoline. One of the top goals: reducing greenhouse gas emissions.

But today, the nation’s ethanol plants produce more than double the climate-damaging pollution, per gallon of fuel production capacity, than the nation’s oil refineries, according to a Reuters analysis of federal data.

The average ethanol plant chuffed out 1,187 metric tons of carbon emissions per million gallons of fuel capacity in 2020, the latest year data is available. The average oil refinery, by contrast, produced 533 metric tons of carbon.

The ethanol plants’ high emissions result in part from a history of industry-friendly federal regulation that has allowed almost all processors to sidestep the key environmental requirement of the 2007 law, the Renewable Fuel Standard (RFS), according to academics who have studied ethanol pollution and regulatory documents examined by Reuters. The rule requires individual ethanol processors to demonstrate that their fuels result in lower carbon emissions than gasoline.

The Environmental Protection Agency (EPA) is charged with writing the regulations to meet the goals set by Congress. For processors, that translates to an EPA requirement that the plants use certain emissions-control processes the agency assumes will result in lower-than-gasoline emissions.

But the agency has exempted more than 95% of U.S. ethanol plants from the requirement through a grandfathering provision that excused plants built or under construction before the legislation passed. Today, these plants produce more than 80% of the nation’s ethanol, according to the EPA.

Among the five biggest polluters in 2020, per gallon of fuel capacity, were plants owned by Archer-Daniels-Midland Co, Golden Triangle Energy, Central Indiana Ethanol, Green Plains Inc and Marquis Energy, according to the Reuters analysis. Plants operated by major energy companies POET LLC and Valero Energy Corp were among the top 15.

 For a graphic showing the top five dirtiest ethanol refineries, click here: https://www.datawrapper.de/_/MVaMG 

Green Plains, Marquis and POET said that ethanol is cleaner than gasoline, despite higher plant-level emissions, when all factors are considered, including emissions from fuel consumption in vehicles. The other companies did not respond to requests for comment.

Some of the exempted plants produced much less pollution, including some owned by the same companies producing the highest emissions. The EPA said about a third meet the law’s environmental standard even though they are not required to do so. But as a group, the plants freed from regulation produced 40% more pollution per gallon of fuel capacity, on average, than the plants required to comply, the Reuters analysis found.

The EPA’s resolve to rein in ethanol emissions faces a new test this year as Congressional mandates for expanding biofuels expire, placing the future of the RFS at the agency’s discretion. The EPA is expected to propose regulatory changes later this year but has yet to publicly detail any proposed revisions.

White House representatives of Democratic U.S. President Joe Biden, who has vowed to aggressively fight climate change, did not comment on the Reuters findings on ethanol emissions. In response to Reuters inquiries, the EPA said it has followed the intent of Congress in implementing the biofuels law, including the regulatory exemptions. The agency acknowledged the higher production emissions of ethanol, compared to gasoline, but asserted that ethanol is cleaner overall.

The agency also touted ethanol’s benefits on rural economies and national security. “Renewable fuels help diversify our nation’s energy supply, improving energy independence and security,” the agency said, adding that biofuels provide “good paying jobs and income to farming communities.”

Ethanol industry representatives have recognized the need to lower the biofuel’s carbon emissions, and biofuel producers have been investing in projects that would capture plants’ carbon emissions and bury them permanently underground.

The leading ethanol industry group maintains, however, that ethanol is cleaner than gasoline. “Ethanol offers a significant and immediate carbon savings,” said Geoff Cooper, president of the Renewable Fuels Association (RFA), in a statement to Reuters.

Other industry observers say the RFS has utterly failed to meet its stated environmental goals. The ethanol mandate was “just a mistake,” said Timothy Searchinger, a senior researcher at Princeton University’s Center for Policy Research on Energy and the Environment. “We created a terrible model.”

DISPUTED GOVERNMENT RESEARCH

Ethanol does have a key environmental advantage over gasoline: It burns cleaner in cars. The problem, biofuels researchers have found, is that those gains are offset by the pollution from planting corn and refining it into fuel.

Researchers from industry, government and academia seek to account for all these dynamics in estimating ethanol’s pollution throughout its full “life cycle” -- from farms to processing plants to automobile tailpipes.

The Reuters analysis examined one major part of that cycle - ethanol processing - based on the emissions data that most plants are required to report to the EPA. The data provides the only view of ethanol emissions tied to individual processors, allowing for comparisons among ethanol plants subject to the emissions-reduction regulation, those exempt from it, and their counterparts in oil refining.


Government and academic researchers have also sought to estimate the industry’s overall pollution, but they have come to sharply contrasting conclusions.

A growing consensus of academics has found that, considering all phases of the fuel’s life cycle, ethanol produces more carbon than gasoline - not less. A study published by the National Academy of Sciences in February, for example, estimated that ethanol produces 24% more carbon.


The EPA’s methodology, by contrast, has hewed closer to the findings of industry-commissioned studies, which assert that ethanol produces as much as 40% less lifecycle emissions than gasoline. The EPA has used a controversial methodology to estimate the ethanol industry’s life-cycle emissions that has effectively ensured the industry’s continuing regulatory compliance. The model greatly underestimates the industry’s pollution from corn agriculture, four academic researchers of ethanol told Reuters.

The EPA methodology relies in part on the work of a researcher from Purdue University in Indiana, whose model the agency selected at the ethanol industry’s suggestion, regulatory documents show.

The RFA said the Reuters analysis of processing-plant pollution inappropriately focused on only one aspect of the industry’s pollution profile and disputed the findings of independent academic researchers showing the overall life-cycle emissions of ethanol are higher than gasoline. Cooper, the association’s president, concluded that “the science is clear,” showing overall ethanol emissions are “40-50% lower than gasoline.”

EXEMPTIONS FOR POLLUTERS

The ethanol industry’s high emissions are caused in part by the exemptions the EPA has granted to almost all ethanol plants, academic researchers said.

The law requires that the ethanol industry demonstrate that the fuel delivers a 20% reduction in carbon emissions compared with gasoline. The percentage is based on the EPA’s model for estimating emissions from all phases of the fuel’s life cycle, including agricultural and fuel consumption. But individual processing plants can meet the standard by agreeing to certain EPA-stipulated emissions-control practices.

Congress initially required the exemptions, but the EPA had broad authority to interpret the law. Several environmental groups asked the agency early on to set an expiration date for the exemptions, or to terminate exemptions for plants that are substantially upgraded or expanded. The agency declined, regulatory records show. The EPA argued in documents outlining the final rule in 2010, for example, that terminating an upgraded plant’s exemption status would require an agency evaluation that would be too “time consuming.”

The legacy of the exemptions is apparent at the Vantage Corn Processors ethanol plant, a hulking complex of steel silos, storage tanks and brick factory buildings that dominates the riverfront in downtown Peoria, Illinois, near the heart of the U.S. corn belt.

The facility was among the dirtiest U.S. ethanol plants, according to a Reuters analysis of EPA data. The plant cranked out more than 3,600 metric tons of carbon dioxide - seven times more than the average oil refinery - for every million gallons of fuel produced.

The plant was owned in 2020 by ADM, the multinational food processor and agricultural trader, and was purchased the following year by BioUrja Group, a global energy firm. BioUrja’s chief operating officer, Shék Jain, said the data analyzed by Reuters reflects emissions under ADM ownership and that his company is making the plant more efficient. ADM did not comment.

The Peoria plant is among 240 of 251 U.S. ethanol production facilities that are exempted from emissions-reduction requirements, EPA data show.

Reuters analyzed 165 of the exempted facilities, those for which both production and emissions data were available. The remaining facilities are not required by federal law to report their pollution levels because their carbon emissions were below 25,000 metric tons annually. Generally, that indicates they are small processing facilities.

While the small number of ethanol plants subject to regulation produce 40% less pollution than the exempted plants, they still produce more pollution, on average, than oil refineries, the Reuters analysis found. Ethanol plants complying with the rule produced an average of 860 metric tons of carbon per millions of gallons of fuel capacity, compared to 533 tons at the average oil refinery. The average exempted ethanol plant produced 1,203 tons of carbon.

The grandfathered facilities produced 4.8 million tons more carbon emissions than they would have if they had been required to comply with the standard, according to a Reuters calculation based on the average emissions from regulated and unregulated plants. That’s equivalent to the emissions of more than a million cars.

INDUSTRY-FRIENDLY ASSUMPTIONS

The U.S. government has maintained that ethanol produces less pollution than gasoline despite the growing body of independent research showing the opposite. The EPA bases its claim that ethanol benefits the climate on calculations made nearly 15 years ago using a handful of scientific models. The models include one that was recommended to the agency by the Renewable Fuels Association, agency documents show.

When Congress passed the RFS, it required the EPA to model ethanol’s emissions profile to verify it could meet the emissions-reduction standard. The EPA’s first pass at the calculation in 2009, however, found that ethanol would result in a 5% increase in greenhouse gas emissions over gasoline, which would have barred the fuel from the blending mandates.

Industry groups including the RFA bristled at the calculation and urged the agency to change the formula. The industry recommendations included adopting a model maintained by the Global Trade Analysis Project (GTAP) at Purdue University to estimate the pollution generated by planting corn for ethanol, EPA records of the debate show.

The EPA redid its modeling and used GTAP to test its results, according to a 2010 Congressional Research Service report. It concluded ethanol’s emissions were 21% lower than gasoline - putting the biofuel just barely over the 20% threshold for RFS compliance.

The agency told Reuters that it did not make the modeling change solely at the industry’s request, but rather included input from “government, academia, industry, and not-for-profit institutions.”

The Purdue model’s approach to estimating agricultural emissions has been disputed by academics.

The bulk of ethanol emissions are produced when new land is tilled for corn production, releasing carbon that is stored in soil and roots. Two biofuel experts told Reuters that the team working on the Purdue model has steadily reduced its estimate of how much carbon is released from tilled land over the years, making ethanol appear more climate-friendly. For instance, the model has been adjusted over the past decade to overstate increases in corn yields, resulting in an underestimate of emissions from planting, according to a study published in 2020 by the Journal of Cleaner Production, an academic publication focused on sustainability.

The changes raise concerns about the model’s credibility and result in a “really lowball estimate” for agricultural emissions from ethanol, said Stephanie Searle, director of the fuels program at the International Council on Clean Transportation, a nonprofit research organization.

The Purdue model is led by Dr. Farzad Taheripour, a researcher and professor of agricultural economics. Taheripour said the model was modified over time to reflect real-world observations of how biofuels production has affected land use. For instance, early scholarship on ethanol regulation suggested the RFS would lead to deforestation, which did not occur, he said.

Taheripour has received research funding from several biofuels industry trade groups since 2012, including the Renewable Fuels Association, National Corn Growers Association, Indiana Corn Soybean Alliance, and National Biodiesel Board, according to a Reuters review of his research funding disclosures.

Reuters was not able to determine the total amount of industry grants Taheripour has collected or the amount he may have received from other sources. Taheripour said his funding sources do not affect his research methods or outcomes.

LAND CONVERSION

When Congress passed the RFS, it barred farmers from planting previously uncultivated acres with corn for ethanol, a measure intended to limit carbon emissions. And biofuels supporters often point to the fact that overall U.S. corn acreage has stayed relatively stable since the passage of the biofuels law in 2007.

Some scientists counter that corn planting would have dropped significantly without the government biofuels mandate. In the 25 years before the law’s passage, corn acreage declined nearly 7%, due in part to increasing yields per acre.

Moreover, corn acreage statistics do not account for millions of acres of corn for ethanol being planted on new lands -- the result of another EPA regulation that relaxed restrictions on the industry.

During its initial RFS rulemaking, the agency allowed new corn planting for ethanol on land enrolled in the U.S. Department of Agriculture’s Conservation Reserve Program (CRP), which pays farmers a monthly rent to keep fragile land idle.

Since then, farmers have planted about 5 million acres of conserved land with corn for ethanol, according to the National Academy of Sciences study. All that planting comes with “a carbon cost,” said Tyler Lark, a scientist at the University of Wisconsin-Madison’s Center for Sustainability and the Global Environment and the study’s lead author.

Taheripour dismissed the idea that the ethanol industry’s new corn plantings produced much pollution.

“CRP land is nothing but unused cropland,” Taheripour said. “Unused land does not have the capability to capture lots of carbon.”

The USDA has for years claimed otherwise – that unused farmland in its CRP program soaked up massive amounts of carbon. Touting the program as a major solution to climate change, the department estimated between 2006 and 2017 that such lands contained about 1.4 metric tons of carbon per acre, on average.

Asked about the climate benefits of CRP land for this story, however, the USDA told Reuters it had recently lowered its estimate of carbon in such lands by nearly half, to 0.8 metric tons per acre, after reviewing updated data.

Given the scientific disputes surrounding ethanol, industry and governmental claims of a major climate benefit are dubious, said Rich Plevin, an environmental consultant and former researcher at the University of California-Berkeley who has studied biofuels emissions.

“Did the policy achieve anything? I think it’s really hard to claim that it did for the environment,” he said. “The best we can say is, no one really knows.”

(Reporting by Leah Douglas; editing by Richard Valdmanis and Brian Thevenot)

Copyright 2022 Thomson Reuters.

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CORN IN YOUR TANK MEANS NO CORN TORTILLA'S

EXPLAINER: Why Biden is allowing more ethanol in gasoline

WASHINGTON (AP) — President Joe Biden said Tuesday his administration will suspend a federal rule that bars higher levels of ethanol in gasoline during the summer. The move, which Biden announced during a visit to Iowa, is intended to tamp down prices at the pump that have spiked during Russia’s war with Ukraine. Iowa is a key producer of the corn-based fuel additive.

A look at how that the decision to authorize year-round use of so-called E15 will impact gas supplies, prices and the environment.

WHAT ACTION IS BIDEN TAKING?

Most gasoline sold in the U.S. is blended with 10% ethanol. At Biden's direction, the Environmental Protection Agency will issue an emergency waiver to allow widespread sale of 15% ethanol blend that is usually prohibited between June 1 and Sept. 15 because of concerns that it adds to smog in high temperatures.

Senior Biden administration officials said the move will save drivers an average of 10 cents per gallon at 2,300 gas stations that sell E15, as the high-blend ethanol is known. Those stations are mostly in the Midwest and the South, including Texas, according to industry groups.

WHY IS BIDEN DOING THIS?

Lawmakers from both parties and ethanol advocates have urged Biden and the EPA to allow year-round sales of E15, calling it a cheaper and readily available domestic alternative to traditional gasoline. The U.S. has banned imports of Russian crude oil since the country's late February invasion of Ukraine, disrupting global markets and raising prices.

“Homegrown Iowa biofuels provide a quick and clean solution for lowering prices at the pump, and bolstering production would help us become energy independent once again,″ said Sen. Chuck Grassley, R-Iowa, a longtime ethanol proponent. Grassley and 15 other senators sent Biden a letter last month urging him to allow year-round E15 sales.

Ethanol groups called Biden's action a major win for American drivers and U.S. energy security. "It means cleaner options at the pump and a stronger rural economy,” said Emily Skor, CEO of Growth Energy, a biofuel trade group.

HOW WILL THIS AFFECT THE ENVIRONMENT?

Biden administration official say the short-term move will have little effect on the environment and that EPA will work with states to "ensure there are no significant air quality impacts through the summer driving season.''

Environmentalists questioned that, saying ethanol production contributes to greenhouse gas emissions and soil erosion and raises prices for corn and other crops.

“The ethanol lobby will be happy and kids with asthma will be sicker,'' said Dan Becker of the Center for Biological Diversity, an environmental group. “However well-meaning (Biden's action) might be, kids and the elderly shouldn’t pay the price with their health for slight gas savings.''

A recent report in the Proceedings of the National Academy of the Sciences revealed that the federal ethanol mandate inflated corn prices by 30% from 2008 to 2016, made corn-based ethanol more carbon intensive than gasoline and increased annual fertilizer use by up to 8%, polluting waterways.

HAS EPA DONE THIS BEFORE?

The EPA has lifted seasonal restrictions on E15 in the past, including after Hurricane Harvey in 2017. The Trump administration allowed for year-round E15 sales starting in 2019, but a federal appeals court struck down the policy change in July 2021, saying the EPA overstepped its authority.

The decision dealt a significant blow to the ethanol industry and corn farmers who had anticipated increased ethanol demand through year-round sales of the higher blend.

HOW IS THIS DIFFERENT FROM TRUMP'S ACTION?

Senior Biden administration officials said they expected the EPA waiver to survive a likely court challenge, saying that unlike the open-ended Trump rule, the action is limited to this summer and is prompted by a supply disruption caused by the war in Europe.

Greater use of E15 should "help alleviate some of the pain that we’ve seen since Russia launched this war against Ukraine,” EPA Administrator Michael Regan told a Senate committee last week.

But critics said the only emergency is Biden's dropping poll numbers.

Emergency fuel waivers are reserved for acute supply disruptions, such as those resulting from a hurricane, said Chet Thompson, president & CEO of the American Fuel & Petrochemical Manufacturers, which represents petroleum refiners.

“An additional three months of E15 sales won’t do anything to address high crude oil prices, and 98% of retail (gas) stations can’t even sell the fuel,'' Thompson said. “This is politics, not a real solution for drivers.”

WILL E15 HURT MY CAR'S ENGINE?

E15, often sold at the pump as Unleaded 88, for its octane rating, can safely be used in all cars, trucks and SUVs from 2001 on. Those model years represent more than 90% of vehicles on U.S. roads. The ethanol industry says the fuel is one of the most tested in history and has no effect on vehicle drivability. More than 20 billion miles have been driven in cars and trucks using Unleaded 88, a number continues to grow.

WHAT IS THE PRICE OF E15 GAS?

E15, or Unleaded 88, typically sells for 10 cents a gallon less than E10, the standard formulation for U.S. cars. The price difference between Unleaded 88 and conventional gasoline without ethanol is around 40 cents.

WILL I GET BETTER MILEAGE WITH E15?

There is no noticeable difference between the mileage achieved when using E15 and mileage when operating on E10.

CAN I USE E15 IN MY LAWNMOWER OR OTHER SMALL-ENGINE EQUIPMENT?

E15 has not been approved by EPA for use in non-automotive engines such as boats, motorcycles, lawn mowers and other small engines. E10, the standard ethanol formulation, is approved for small engines.

Matthew Daly, The Associated Press

'Short-term thinking': Environmentalists push back on Biden's ethanol expansion

Jon Schuppe - 



President Joe Biden's plan to reduce the price of gas by allowing the sale of higher-ethanol fuel this summer may make corn farmers and their elected representatives happy. But the move also has irked environmentalists who see ethanol as a climate-change villain.

Biden made his announcement Tuesday during a trip to Iowa, where corn — and ethanol — are crucial to the state economy. He said the Environmental Protection Agency would issue an emergency waiver from the Clean Air Act that will permit the sale of gasoline that is 15 percent ethanol, 5 percent more than the typical blend, from June 1 to Sept. 15. The change will lower gas prices by about 10 cents a gallon at the 2,300 gas stations equipped to pump it, the Biden administration says.

To environmentalists, that's a small benefit compared to the damage the decision could do to efforts to reduce the country's carbon emissions.

“What the president is doing is the definition of short-term thinking,” said Carroll Muffett, president and CEO of the Center for International Environmental Law. “The

goal here shouldn’t be to bring gas prices down by 10 cents in the near term by increasing emissions that will endanger large parts of the population.”

Although ethanol was embraced more than a decade ago as a renewable fuel, its green reputation has eroded. Scientists have found evidence that increased corn production for ethanol could increase greenhouse gas emissions; a study published in February said ethanol may be worse for the climate than gasoline.

The reason Biden needs an emergency waiver is that the summertime use of gas with 15 percent ethanol, known as E15, is known to increase smog.

“This is a quick fix that will harm the planet and not do much to support consumers,” said Jim Walsh, policy director at Food & Water Watch, a nonprofit group that opposes the use of ethanol as a climate solution.

Senior Biden administration officials have told reporters that the EPA's own analysis did not indicate that the emergency waiver was likely to harm air quality. They pointed to another study, published last year, showing that ethanol's greenhouse gas emissions are decreasing with improvements in farming and production methods.

Geoff Cooper, president and CEO of the Renewable Fuels Association, an ethanol trade association, said ethanol was "unquestionably a winner when compared to gasoline."

Biden's move also drew criticism from the oil industry. The American Petroleum Institute, a trade association for the oil and gas industries, said that the scarcity of stations equipped with E15 fuel limits the impact of the president's action.

"Americans are looking for long-term solutions, not short-term political fixes that fail to acknowledge the logistical, legal and compatibility constraints that limit the ability of E15 to influence prices at the pump today," Ron Chittim, the group's vice president of downstream policy, said in a statement.

Then-President Donald Trump tried allowing the year-round use of E15 fuel in 2019 but a federal court overruled him following a challenge from oil refiners.

Sheila Karpf, a senior policy analyst at Taxpayers for Common Sense, a nonprofit government watchdog group that opposes ethanol subsidies, said she expected Biden's waiver to be challenged in court as well.

"We have seen decades of corn ethanol subsidies, and the handouts to the industry continue to happen," she said.

Cooper, of the ethanol trade group, said that he too expected the oil industry to challenge Biden's expansion of E15 but that it will survive, because it involves the temporary use of emergency powers allowed by the Clean Air Act.

"If war in Ukraine and $4 gas and a shortage in the marketplace don’t warrant an emergency, I don’t know what would," he said.

Villagers resist India's biofuel push, fearing hidden health risks


24 November 2023 - BY BHASKER TRIPATHI

“The government might reduce pollution by blending ethanol, but the hidden cost is the pollution that locals like us face wherever its ethanol is produced”.
Image: 123RF/Ralph Fiskness / File photo

On a sunny afternoon last month, two dozen people gathered at the council office in a south Indian village to protest against a new ethanol plant they say is polluting their backyard.

Over a year ago, locals were alarmed when they saw construction begin on the government-sanctioned grain distillery on a vacant plot about a kilometre (0.62 miles) away from their homes.

Touted as a green fuel and a solution to cut tailpipe emissions from vehicles when blended with gasoline, ethanol — a biofuel — is key to India’s action to tackle climate change.

But the residents of Chittanur village in Telangana state say they are not ready to pay for the national clean energy drive with their health.

This September, the plant started operating for a trial period. Villagers told Context that, despite claiming to be a Zero Liquid Discharge (ZLD) facility, it had released hazardous effluent in the stream running near the village.

Effluent discharged by distilleries can contain acids and heavy metals, which if untreated can harm soil fertility, aquatic life and human health, according to Indian researchers.

The stream is an essential source of water for surrounding villages. Local people said a child fell seriously ill after swimming in contaminated water while adults who came into contact with it developed skin rashes.

“The government might reduce pollution by blending ethanol, but the hidden cost is the pollution that locals like us face wherever its ethanol is produced,” said Sugunakar Reddy, a village resident who works in the IT industry in Hyderabad.

Reddy said inhabitants had repeatedly complained about the ethanol plant to the district administration and pollution control bodies, but to no avail.

Jurala Organic Farms and Agro Industries, the company that owns the plant near Chittanur, did not respond to questions about its operations.

Once fully functional, the distillery will use food crops like rice to produce 800,000 litres of ethanol daily to be sold to Indian gasoline retailers.

Many countries around the world, from the US to Indonesia and Brazil, blend biofuels with gasoline to reduce their fossil-fuel import burden and curb climate-heating emissions from the transport sector.

Starting from the early 2000s, India used sugar cane to ramp up ethanol production to 4 billion litres annually to meet a target of blending 10% ethanol into gasoline.

In addition, about five years ago, it decided to harness food crops — rice and maize — to increase production for a higher 20% blend target that took effect in 2021, requiring 12 billion litres of ethanol each year.

Since 2020, the government has approved nearly 200 new grain-based distilleries, nine of them sited in Telangana.

It has eased the way for such facilities by weakening regulations to exempt them from public hearings before getting environmental clearance, offering financial support and putting in place long-term purchase agreements for their output.

The biofuel push has seen experts flag the risks of increased pollution impacts and warn that over-use of crops for ethanol production could threaten food security for the poor and hurt a sector already hit by climate change.

India's Ministry of Petroleum and Natural Gas, which also steers biofuel policy, did not respond to a request for comment.

WATER AND FOOD DIVERTED FOR FUEL

The Chittanur protests, which started a year ago, foreshadow the risk of local conflicts erupting in other areas with ethanol distilleries.

Farmer Vakiti Ramanji said residents found out that the Chittanur plant had been given the green light without public consultation, triggering demonstrations and a village council resolution against it.

Locals fear toxic effluent from the plant could contaminate groundwater in the future. “This will have scary outcomes for our health and the crops we grow,” Ramanji said.

After they raised objections, residents said the plant's operator started taking effluent out in tankers and releasing it on the roadside, sparking angry protests and clashes between villagers and police which led to many arrests in October.

Locals are also worried about how ethanol production will affect their food and water supplies in a drought-prone region.

Farmer Puttapalli Murli noted that producing one litre of ethanol takes three kilos of rice and six litres of water.

While the ethanol company has been given permission by the government to take water from a nearby dam, farmers are not getting enough for their irrigation needs, he added.

According to government data, sugar cane and rice use up to 70% of India's irrigation water

Murli said the plant had promised to buy rice directly from villagers but the government is already selling subsidised rice from public stocks to ethanol producers, undercutting farmers.

The Food Corporation of India, which maintains national food stocks, released 2.5 million tonnes of rice to 100 distilleries from March 2020 to July 2023, according to data requested by Context.

The body is also responsible for allocating rice and wheat to India’s public food distribution system for the poor.

With India ranking 111 out of 125 countries in the 2023 Global Hunger Index, the national policy of diverting food crops for ethanol has been criticised by experts.

“The use of rice for food should be prioritised over its use as fuel,” wrote Siraj Hussain, a former Indian agriculture secretary, and agricultural economist Shweta Saini in an opinion piece published in June by online news platform The Wire.

In August, the government stopped releasing subsidised rice for ethanol production amid concerns over depleting stocks, but the halt may only be temporary, according to Indian media.

LOW-EMISSIONS FUEL?

Promit Mookherjee, an associate fellow at the Observer Research Foundation, a Delhi-based think-tank, said the government should not set an ambitious biofuels target and then make changes to the “fragile” agriculture sector to achieve it.

Instead it should assess how much ethanol can be produced sustainably from existing farmland and then seek other efficient ways to boost ethanol production, he said.

Incentivising farmers to grow feedstock for ethanol will deter them from diversifying into new crops and cultivation methods needed to adapt to climate change, while the policy could increase planet-heating emissions from land-use change, he added.

A 2022 study published in the journal of the National Academy of Sciences in the US — which produces most of its ethanol from corn — found that expanding crop production for biofuel intensified the use of fertiliser and water.

This resulted in the carbon footprint of corn-based ethanol being “no less than gasoline and likely at least 24% higher”, the researchers wrote.

While using food crops to produce ethanol — known as “first-generation” biofuel — is easier, technology now allows the use of agricultural waste to produce “second-generation” ethanol.

Several companies have successfully demonstrated this new method in India but are struggling to scale it up, Mookherjee said, calling for a government road map for sustainable ethanol production.

In the meantime, Chittanur residents are refusing to be pushed aside in the race to hit national biofuel targets.

“Everyone tells us that this plant is for the development of India,” said IT worker Reddy. “Is our village, our farmers not a part of India? Do we not have the right to live a healthy life?”

Reuters

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EPA raises amount of ethanol that must be blended with gas


An ethanol refinery is shown on July 22, 2021, in Chancellor, S.D. The Biden administration set new requirements Friday, June 3, 2022, that increase the amount of ethanol that must be blended into the nation's gasoline supply but reduce previous ethanol-blending requirements due to a plunge in fuel demand during the coronavirus pandemic. 

(AP Photo/Stephen Groves, File) 

DAVID PITT
Fri, June 3, 2022

DES MOINES, Iowa (AP) — The Biden administration on Friday set new requirements that increase the amount of ethanol that must be blended into the nation's gasoline supply but reduce previous ethanol-blending requirements due to a plunge in fuel demand during the coronavirus pandemic.

The Environmental Protection Agency said it would set the 2022 levels for corn-based ethanol blended into gasoline at 15 billion gallons. But even as the new rules increased future ethanol requirements, the EPA retroactively reduced levels for 2020 by 2.5 billion gallons and by 1.2 billion gallons for 2021, reflecting the lower amount of ethanol produced and decreased sales of gasoline during a period when the virus led to a drop in driving.

Most gasoline sold in the U.S. contains 10% ethanol, and the fuel has become a key part of the economy in many Midwest states. The fuel consumes more than 40% of the nation's corn supply, and ethanol and other biofuel production plants offer jobs in rural areas that have seen steady population declines over the decades.

President Joe Biden is among many politicians from both parties who have frequently promised to support increases in the renewable fuel standard.

“Today’s actions will help to reduce our reliance on oil and put the RFS program back on track after years of challenges and mismanagement," said EPA Administrator Michael Regan.

The Renewable Fuels Association, an ethanol lobbying group, criticized the retroactive reduction of biofuels targets but said the future requirements would bring certainty back to the renewable fuel standard, help lower gas prices and set a foundation for future growth.

In the last few days, wholesale ethanol prices have been as much as $1.30 per gallon lower than gasoline, the group said.

The final order also denies exemptions for certain oil refineries from ethanol requirements, saying they had failed to show exemptions were justified under the Clean Air Act.

The American Fuel & Petrochemical Manufacturers group, which represents refineries, called the 2022 figure “bewildering and contrary to the administration’s claims to be doing everything in their power to provide relief to consumers.” The group said unachievable mandates will increase fuel production costs and keep consumer prices high.

The Biden administration also announced Friday that the U.S. Department of Agriculture would provide $700 million to support 195 biofuel producers in 25 states that faced unexpected market losses due to the COVID-19 pandemic.

The money comes from the Coronavirus Aid, Relief, and Economic Security Act.

Biden's EPA finalizes ethanol, biodiesel blending requirements, requiring largest amount on record

Donnelle Eller, Des Moines Register
Fri, June 3, 2022

The Biden administration Friday made official its requirement for how much ethanol and biodiesel the oil industry must blend into the nation's fuel supply this year, giving the renewable fuel industry several wins.

The U.S. Environmental Protection Agency deviated little from the proposal level announced late last year, the largest since the establishment of the Renewable Fuel Standard in 2005. Most U.S. gasoline is blended with at least 10% ethanol under the federal mandate.

Iowa is both the nation's largest ethanol producer and corn grower, with about half the crop going to make the renewable fuel.

It also leads the nation in making biodiesel and is the second-largest grower of soybeans, a major feedstock for the fuel.

President Joe Biden announces the elimination of restrictions on E15, allowing the 15% ethanol blend of gasoline to be sold year-round, at POET Bioprocessing, on Tuesday, April 12, 2022, in rural Menlo, Iowa.

The EPA said the decision on the standard reflects "the Biden administration’s commitment to reset and strengthen the RFS, bolster our nation’s energy security, and support homegrown biofuel alternatives to oil for transportation fuel."

Supporters hailed the decision, which comes at a time when gas prices have skyrocketed. In Iowa, the Friday median gas price was $4.493 a gallon, nearly 60% higher than a year earlier, according to AAA Gas Price.

The renewable fuels industry says gas blended with 15% ethanol, called E15, can cut pump prices by nearly 60 cents a gallon in some parts of the country. President Joe Biden visited an Iowa ethanol plant in April to announce he was lifting disputed smog-related restrictions on the summer sales of E15 to help cut gas prices

More: A new Iowa law will require more gas stations to carry E15. Can I use it? Will it save me money?

Also, a recent study shows that corn-ethanol has 46% fewer greenhouse gas emissions than gasoline.

"More ethanol in the fuel supply saves Americans money at the pump and lowers greenhouse gas emissions," said Chris Edgington, an Iowa farmer and National Corn Growers Association's board president.

“President Biden understands the important role the biofuels industry plays in supporting Iowa farmers and rural communities while reducing the price at the pump for consumers,” U.S. Rep. Cindy Axne, an Iowa Democrat, said in a statement.

"By requiring petroleum refiners to blend larger volumes of low-cost biofuels like ethanol, today’s actions will put downward pressure on gas prices and provide economic relief to American families facing record-high pump prices," Renewable Fuels Association CEO Geoff Cooper said in a statement.

MORE: President Joe Biden in Iowa OKs more ethanol use to cut gas prices, pitches plan to improve rural America

But Chet Thompson, CEO of the American Fuel & Petrochemical Manufacturers, said the blending requirement for this year is "contrary to the administration’s claims to be doing everything in their power to provide relief to consumers."

"Unachievable mandates will needlessly raise fuel production costs and further threaten the viability of U.S. small refineries, both at the expense of consumers," Thompson said.
Announcement also include denial of refinery exemptions

The EPA, after gathering comments since releasing it proposed blending requirements in December, said Friday it will require refiners to blend 20.77 billion gallons of ethanol, biodiesel and other renewable fuel this year.

Additionally, the oil industry must blend 250 million more gallons of renewable fuel, both this year and next, after a federal court found the Obama administration inappropriately reduced the 2016 blending requirements.

The agency also denied roughly 70 exemptions for small refineries, many of which had been granted under former President Donald Trump.

More: Verbio launches $115 million renewable natural gas, ethanol plant in Nevada; touts bigger plans

“The Biden EPA is to be commended for restoring sanity to the refinery exemption program,” Monte Shaw, the Iowa Renewable Fuel Association's executive director, said in a statement. “These exemptions have never been justified and were simply being used to illegally undermine the RFS. We are grateful this long nightmare is over.”

Shaw, however, said he's concerned about the EPA's decision to retroactively scale back the blending requirements for 2020 and 2021, although the agency did increase last year's requirement by 320 million over December's proposal.

More: Chevron plans to buy Ames-based biodiesel company Renewable Energy Group for $3.15 billion

The EPA attributed the reduction in the blending requirements to widespread travel shutdowns during the coronavirus pandemic, which drastically reduced fuel demand.

“We cannot ignore that today’s final rule creates uncertainty," Shaw said. "Any of these numbers that look good today could be revised downward in the future."

But Emily Skor, CEO of Growth Energy, a Washington, D.C., biofuels advocacy group, said the Biden's administration final rule "sends a positive signal" as the EPA works to set new guidelines for 2023, when the federal mandate will no longer outlines blending requirements.

Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at deller@registermedia.com or 515-284-8457.

This article originally appeared on Des Moines Register: EPA announces renewable fuel standard, key figure for Iowa corn, ethanol

Pretreating soil with ethanol protects plants from drought

Peer-Reviewed Publication

RIKEN

 

IMAGE: AFTER TWO WEEKS WITHOUT WATER, WHEAT DID NOT SURVIVE WHEN SOIL WAS PRETREATED WITH WATER (LEFT), BUT THRIVED WHEN THE SOIL WAS PRETREATED WITH 3% ETHANOL (RIGHT). THE SAME WAS TRUE FOR RICE AND THE MODEL PLANT ARABIDOPSIS. view more 

CREDIT: RIKEN

Ethanol can help plants survive in times of drought says a new study conducted at the RIKEN Center for Sustainable Resource Science in Japan. Led by Motoaki Seki, researchers show that adding ethanol to soil allows plants, including rice and wheat, to thrive after two weeks without any water. As ethanol is safe, cheap, and widely available, this finding offers a practical way to increase food production all over the world when water is scarce, without the need for costly, time-consuming, and sometimes controversial production of genetically modified plants. The study was published August 25 in Plant and Cell Physiology.

The foreseeable future includes a steadily rising population and climate change-induced increases in water shortages, two conditions that will inevitably lead to food shortages unless action is taken. One option is to find a way to prevent plants from dying when they don’t have access to water. Genetically modifying plants so that their stomata—the pores in their leaves—stay closed, has been somewhat effective because it prevents water from leaving the plants. However, making genetically modified plants is expensive and time consuming, and countries with the greatest need might not have equal access to these modified crops.

Seki and his team have been working on another approach. Knowing that plants produce ethanol when deprived of water, they reasoned that giving it to plants would protect them from future drought. To test this hypothesis, they grew plants for about two weeks with ample water. Then, they pretreated soil with ethanol for three days, followed by water deprivation for two weeks. About 75% of ethanol-treated wheat and rice plants survived after rewatering, while less than 5% of the untreated plants survived.

Having shown that ethanol can protect these two important crops from drought, they next set out to explain why by focusing on the model plant Arabidopsis. First, they looked at the leaves. They found that soon after ethanol-treated Arabidopsis plants were deprived of water, their stomata closed and leaf temperature went up. By 11 and 12 days of water deprivation, these plants had retained more water in their leaves than the untreated plants.

Then, the researchers analyzed gene expression before and during water deprivation and radio-tagged the ethanol before pretreatment. This allowed them to see what processes were activated during drought and what happened to the ethanol after it was taken up by the plant roots. Even before water was deprived, the ethanol-treated plants began to express genes that are normally expressed during water deprivation. Additionally, around the same time that water content was dropping in untreated leaves, the ethanol-treated plants were making sugars from the ethanol and doing photosynthesis.

Seki says that treating the soil with ethanol mitigates drought on several fronts. First, drought-related genes are expressed even before water is missing, giving the plants a head start in preparation. Then, the stomata close, allowing leaves to retain more water. At the same time, some of the ethanol is used to make a variety of sugars, which provide much needed energy that is normally difficult to get with closed stomata.

“We find that treating common crops such as wheat and rice with exogenous ethanol can increase crop production during drought. As in Arabidopsis, this is likely via changes in the metabolomic and transcriptomic profiles that regulate the drought-stress response,” says Seki. “This offers us a cheap and easy way to increase crop yield even when water is limited, without the need for genetic modification.”

---

JOURNAL

Plant and Cell Physiology

DOI

10.1093/pcp/pcac114 

Fuel from waste wood

Possibility to produce ethanol on a financially competitive and technically efficient basis

Date: March 29, 2022

Source: Technical University of Munich (TUM)

Summary: According to the latest assessment report from the Intergovernmental Panel on Climate Change, a considerable reduction in CO2 emissions is required to limit the consequences of climate change. Producing fuel from renewable sources such as waste wood and straw or renewable electricity would be one way to reduce carbon emissions from the area of transportation.


Ethanol is usually produced through the fermentation of sugars from starchy raw materials such as corn, or from lignocellulosic biomass, such as wood or straw. It is an established fuel that decarbonizes the transportation sector and can be a building block to reduce emissions of CO2 over the long term. In collaboration with the Lappeenranta-Lahti University of Technology (LUT) in Finland, researchers at the Straubing Campus for Biotechnology and Sustainability of the Technical University of Munich (TUM) have developed a new process for the production of ethanol.

In this context, offcut materials from the area of forestry are used together with hydrogen. The hydrogen is produced by separating water into hydrogen and oxygen with the use of electricity -- in other words, with the use of water electrolysis. In the future, this will allow the excess electricity to be used for the production of ethanol.

"The overall process mainly consists of technically mature sub-processes. However, the composition of the process steps and the final step -- the hydrogenation of acetic acid to produce ethanol -- are new," explains Daniel Klüh, a doctoral student at the Professorship of Renewable Energy Systems at the TUM Straubing Campus.

The costs of ethanol with the new production method are competitive

The researchers have also assessed the economic feasibility. "The prices we have calculated are based on assumptions for raw materials and energy. We are not using any current market prices. The calculation basis of our prices for the components in the chemical system is the year 2020," explains Klüh. The lowest cost for ethanol in the modeling was 0.65 euros per liter, with biomass costs of 20 euros per megawatt hour, electricity costs of 45 euros per megawatt hour, and a production volume of approximately 42 kilotons of ethanol per year.

"With the current lignocellulosic ethanol production options, the costs are therefore competitive. The price of ethanol is very sensitive to the costs of electricity, and fluctuates between 0.56 and 0.74 euros per liter," explains Assistant Professor Kristian Melin of LUT in Finland. One reason for the high profitability is that the ethanol yield is much higher compared to traditional fermentation based bioethanol process from straw or wood. This process produces 1350 to 1410 liters of ethanol, compared to only 200 to 300 liters of ethanol for the traditional process per dry ton of biomass.

Where production facilities could be located

Part of the study is focusing on the variable geographical positioning of production sites, which would enable a degree of independence from suppliers to be achieved. "Countries with a high potential for waste wood and green electricity, such as Finland or even Canada, can serve as producers of acetic acid, which, in the final process step, is hydrogenated to produce ethanol," explains Prof. Tuomas Koiranen of LUT.

"In the future, countries like Germany will hopefully have a green electricity mix and will be able to carry out the hydrogenation of acetic acid to ethanol at a domestic level. However, Germany does not have the waste wood potential for a large-scale biomass gasification which is required for the synthesis of acetic acid," adds Prof. Matthias Gaderer, Professor of Renewable Energy Systems at TUM.

The technology needs to mature further

With the use of green electricity to power the electrolysis, this process can produce a low CO2 fuel that has a greenhouse gas reduction potential of 75 percent in comparison with a fossil fuel such as gasoline. Ethanol is established as a fuel. It can be used in the form of both E-10 gasoline, with 10 percent ethanol in the fuel mixture for regular automobiles, as is already the case, or as ED95, which is 95 percent ethanol, as a diesel substitute for heavy goods transportation.

With their process simulation, the scientists have demonstrated the competitiveness of the process. "To commercialize this product, it is necessary to further improve the degree of technological maturity. The next steps could entail further catalyst developments, a reactor design and the construction and operation of a pilot system," says Prof. Gaderer.

Journal Reference:
Kristian Melin, Harri Nieminen, Daniel Klüh, Arto Laari, Tuomas Koiranen, Matthias Gaderer. Techno-Economic Evaluation of Novel Hybrid Biomass and Electricity-Based Ethanol Fuel Production. Frontiers in Energy Research, 2022; 10 DOI: 10.3389/fenrg.2022.796104

Big Oil Rips Off Ethanol Subsidies

Talk about biting the hand that feeds you. Big Oil is using Ethanol subsidies, corporate welfare, to fight Ethanol blending. The U.S. taxpayer is subsidizing big oils fight against Ethanol another good reason NOT to have corporate welfare for Ethanol.

For some industries, the prospect of $3.5 billion in federal subsidies now, and double that in three years, might be a powerful incentive. But not, apparently, for the oil industry, which is seeing crude oil prices soar to record highs. Despite collecting billions for blending small amounts of ethanol with gas, oil companies seem determined to fight the spread of E85, a fuel that is 85% ethanol and 15% gas. Congress has set a target of displacing 15% of projected annual gasoline use with alternative fuels by 2017. Right now, wider availability of E85 is the likeliest way to get there.

At the same time the industry is collecting a 51 cents-per-gallon federal subsidy for each gallon of ethanol it mixes with gas and sells as E10 (10% ethanol and 90% gas), it's working against the E85 blend with tactics both overt and stealthy. Efforts range from funding studies that bash the spread of ethanol for driving up the price of corn, and therefore some food, to not supporting E85 pumps at gas stations. The tactics infuriate a growing chorus of critics, from the usual suspects—pro-ethanol consumer groups—to the unexpected: the oil industry's oft-time ally, the auto industry.

The industry collects the subsidies, but didn't lobby for them—Congress created them to encourage a larger ethanol market. While oil reps say they aren't anti-ethanol, they are candid about disliking E85. Says Al Mannato of the American Petroleum Institute (API), the chief trade group for oil and natural-gas companies: "We think [ethanol] makes an effective additive to gasoline but that it doesn't work well as an alternative fuel. And we don't think the marketplace wants E85."

One prong in the oil industry's strategy is an anti-ethanol information campaign. In June the API released a study it commissioned from research firm Global Insight Inc. The report concludes that consumers will be "losers" in the runup to Congress' target of 35 billion gallons of biofuel by 2017 because, it forecasts, they'll pay $12 billion-plus a year more for food as corn prices rise to meet ethanol demand. The conclusions are far from universally accepted, but they have been picked up and promoted by anti-ethanol groups like the Coalition for Balanced Food & Fuel Policy, made up of the major beef, dairy, and poultry lobbies. Global Insight spokesman Jim Dorsey says the funding didn't influence the findings: "We don't have a dog in this hunt."

SEE:

Bio-Fuel B.S.

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Inhaled ethanol may treat respiratory infections and stop pandemics

In mice, the treatment decreased infections caused by the Influenza A virus

Peer-Reviewed Publication

OKINAWA INSTITUTE OF SCIENCE AND TECHNOLOGY (OIST) GRADUATE UNIVERSITY

 

IMAGE: THE STUDY FOUND THAT MICE TREATED WITH ETHANOL VAPOR ARE PROTECTED FROM LETHAL RESPIRATORY INFECTIONS CAUSED BY THE INFLUENZA A VIRUS. view more 

CREDIT: DR. MIHO TAMAI AND PROF. HIROKI ISHIKAWA (OIST)

Inhaling low concentrations of ethanol vapor can disable the influenza A virus in mice, without harmful side effects, says a new study by scientists at the Okinawa Institute of Science and Technology (OIST). The scientists believe it may also treat similar viruses such as the one that causes Covid-19. 

Prof. Tsumoru Shintake, who leads the Quantum Wave Microscopy Unit at OIST, first proposed the idea to use ethanol vapor to treat respiratory tract infections. He set out to test the approach with his colleague, Prof. Hiroki Ishikawa, leader of the Immune Signal Unit at OIST, and their team members.  

“Ethanol is an effective disinfectant for body surfaces, so we wanted to know whether ethanol could also be effective inside the body,” said Dr. Miho Tamai, a scientist in Prof. Ishikawa’s lab.  

Using a humidifier to produce ethanol vapor in a small container, they found that when mice infected with influenza A inhale the vapor for ten minutes, the virus is inactivated. The study is published in The Journal of Infectious Diseases.  

Influenza A viruses accumulate in a thin fluid layer covering lung cells that protect the surface of the airway. The scientists think that the ethanol vapor must increase ethanol concentrations in the fluid to 20% to successfully treat the infection. This concentration is not toxic to lung cells the scientists created in the lab to mimic human cells. At body temperature, 20% ethanol can not only inactivate the influenza A virus outside of the cells in one minute, but also stop the virus from replicating inside these cells.  

The concentration of ethanol provided is important. If the concentration does not reach the right level to inactivate viruses, it will not be useful. 

Influenza A is a virus that has an outer membrane, called an envelope. “Ethanol vapor may also inactivate other enveloped viruses such as SARS-CoV-2,” Prof. Ishikawa said, and so far, all viruses that have caused pandemics have been enveloped. “Once the next pandemic happens, maybe we can quickly apply the ethanol vapor inhalation therapy to prevent or cure the disease,” he explained. 

Prof. Shintake agreed, noting that the effectiveness of this method does not depend on the variant of the virus. He explained that if designed carefully, an ethanol vapor inhalation method could possibly stop a pandemic in future. He and Prof. Ishikawa will continue to collaborate to optimize the therapy and to investigate its effects on other respiratory infectious diseases such as avian influenza viruses and SARS-CoV-2.  

The researchers believe that ethanol vapor inhalation treatment has great potential as a versatile and cost-effective new therapy against various respiratory infectious diseases. But Prof. Ishikawa cautioned that people should not try using ethanol as a therapy on their own. “That may lead to serious side-effects or explosion risks,” he said. “The efficacy and safety of this new treatment on humans and other mammals should be carefully evaluated in the future.”  

---

JOURNAL

The Journal of Infectious Diseases

DOI

10.1098/jiad089 

METHOD OF RESEARCH

Experimental study

SUBJECT OF RESEARCH

Animals

ARTICLE TITLE

Effect of Ethanol Vapor Inhalation Treatment on Lethal Respiratory Viral Infection With Influenza A

ARTICLE PUBLICATION DATE

27-Apr-2023

Brazil’s All-Powerful Sugar Industry Is Souring the Country on EVs












Dayanne Sousa, Leonardo Lara and Simone Preissler Iglesias
Wed, July 19, 2023 

(Bloomberg) -- For two decades, Brazil’s unique solution to curb tailpipe emissions — specialty cars powered by any mix of gasoline and ethanol — helped it boast a fraction of the roadway pollution of other countries its size. Now, it threatens to hold it back.

As governments in many of the world’s other top economies lay out detailed plans to eventually end the sale of combustion-engine cars, Brazil is digging in its heels. The country’s most popular models are so-called flexible-fuel vehicles capable of running completely on biofuel produced from sugar cane, making them by most accounts cleaner than pure gasoline engines. When Brazil releases its updated auto-industry policy as soon as next month, it will plot a path to reduce its reliance on cars that run entirely on gasoline, Secretary for Industrial Development Uallace Moreira Lima told Bloomberg News — but it won’t touch the beloved flex-fuel models.

“Brazil will be the last among its peers to shift to electrics,” said Eder Vieito, senior commodity analyst at Green Pool Commodity Specialists. “And that’s because of ethanol.”

Since their introduction 20 years ago this spring, flex-fuel cars have become dominant in Brazil, making up a whopping 84.5% of all auto sales in June, according to the Brazilian Association of Automotive Vehicle Manufacturers, known as Anfavea. That same month, electric cars comprised less than 0.5% of the market. By comparison, almost one in four passenger vehicle sales in China this year will be battery-powered. Even the US, a fossil fuel diehard, will see EVs comprise almost 8% of sales this year, GlobalData estimates. By 2030, battery-electric vehicles will account for around 7% of the light vehicles sold in Brazil, Bright Consulting projects, far below the expected world average of 37%.

Brazil’s slower adoption of EVs isn’t a fluke. Big-name automakers, the prominent sugar industry and government authorities are pushing hard to keep ethanol in drivers’ gas tanks. That support takes several forms: a series of pro-ethanol regulations, including lower taxes than gasoline at the pump and a federal carbon-credit program that essentially rewards ethanol mills, plus scant investment in the charging infrastructure or battery production needed to make widespread acceptance of EVs a reality.

Changing course would be complicated for leftist President Luiz Inacio Lula da Silva. Phase out flex cars, and he’d lose the massive economic boost created each year by ethanol in the world’s largest producer of sugar cane, where agribusiness represents about a fourth of GDP. But keep the popular, affordable and locally made flex-fuel models, and they’ll continue to elbow out EVs, which would be among the world’s cleanest given that more than 80% of Brazil’s electricity comes from renewable sources like hydropower, wind, solar and biomass. That makes them cleaner than flex-fuel cars over the lifetime of the vehicles.

So far, Lula’s government is trying to support both technologies in a precarious balancing act. To appease the sugar industry, it will keep incentives for ethanol in place while simultaneously courting electric-car makers from China scouting new overseas factory sites with a compelling sales pitch: proximity to local battery-metal deposits, a growing domestic middle class and access to other Latin American markets with their own discretionary incomes to spend. It has worked, with at least two of China’s biggest carmakers — BYD Co. and Great Wall Motor Co. — planning to bring their vehicle production to the country’s shores. But even they plan to add some ethanol-fueled hybrids to their Brazilian lineups in what looks like a friendly — and savvy — gesture.

The discussion about electric cars is “very important for Brazil and for the world,” said Renan Filho, Brazil’s transport minister. But ethanol should be part of the conversation, too, he said. “Ethanol emits much less.”

The longer Brazil waits to start mapping out its path to battery cars, the harder it will be to keep up with the dizzying evolution of EV technology. Transitions take time, and the country may find itself trapped in an outdated system if it delays putting in place the kinds of programs, incentives and municipal projects other countries have found are key to bringing down prices for consumers and spurring adoption.

Like many other emerging economies, where local supply chains primarily focus on affordable vehicles, EVs remain out of reach for many Brazilian households. The cheapest EV in the local market costs more than 140,000 Brazilian reais ($29,000), twice the price of the most affordable flex car.

Meanwhile, Brazil only had one public charger per 12.9 EVs at the end of 2020, BloombergNEF estimates, compared to one for every 5.4 in China, or every 3 in the Netherlands.

“Brazil needs to step out of its comfort zone if it does not want to become isolated from the rest of the world,” said Lourenço Faria, a researcher at University of Copenhagen.

Pure ethanol cars first arrived on Brazilian streets in 1979 when Fiat, the brand now owned by Stellantis NV, introduced a biofuel-powered model. Several powerful industrial and political forces were behind the move. For one, it offered Brazil a way to better shield itself from future petroleum shortages like the one that decimated its economy earlier that decade.

The push into ethanol cars also created a massive new market for the influential five-century-old sugar industry. The sector has deep political connections that are embedded in the nation’s history: Sugar gave birth to Brazil’s very first agricultural elite in a time when landowners profited by exploiting the work of enslaved people trafficked from Africa. This year, Brazil’s sugar-cane production and its subproducts will be worth 105.6 billion Brazilian reais ($22 billion).

The ethanol-only models made from the late-1970s onward were eventually dethroned by flex-fuel vehicles, starting with Volkswagen AG’s subcompact Gol Flex in 2003. In the last two decades, they’ve secured a seemingly unshakable foothold. VW in 2021 announced the creation of a research and development center in Brazil to explore expanding the applications of ethanol and other biofuels in emerging markets, and nearly every carmaker operating in Brazil plans to keep ethanol it its lineup in some form going forward.

Some players in the auto sector, including industry group Anfavea, are even lobbying for the end of a tax exemption for EV imports in a bid to promote Brazil’s domestic carmaking and ethanol refining; the plea has the support of sugar-cane industry group Unica. The carmakers’ group also wants to establish temporary import quotas for EVs landing on Brazilian shores to give local manufacturers more time if they want to develop their own domestic EV production. With no local manufacturing currently, 100% of light electric vehicles on the market have to be shipped in.

By most measures, Brazil’s flex-fuel autos have been a rare success story among developing markets that are in many other cases behind in the race to clean up their car sectors. And unlike other so-called solutions, like VW’s “clean diesels” that appeared greener than they actually were, the country’s unique reliance on ethanol has brought some tangible benefits.

For one, tailpipe emissions per capita are better than in most developed economies and other middle-income, populous nations like Russia or Mexico, International Energy Agency data show. According to data from BloombergNEF and the International Council on Clean Transportation, a flex-fuel Brazilian car made in 2020 will emit 16.7 tons of carbon dioxide over the course of its life, a fraction of the roughly 40 to 50 tons produced by combustion cars in other major economies. Sugar-cane fields can capture carbon from the atmosphere, too, the industry argues.

Because of its use of biofuels in light-vehicle transportation, Brazil avoided around 35 million tons of CO2-equivalent emissions last year, a study by think tank Getulio Vargas Foundation found. That’s the same as shutting down nine US coal plants for a year, according to US Environmental Protection Agency data.

But the ability of flex-fuel cars to run on biofuel doesn’t mean they always do. The BloombergNEF and ICCT study, for instance, assumes a 48% share of ethanol in flex-fuel cars. In reality, consumers often choose to fill their tanks solely with gasoline. A common rule of thumb is that selecting ethanol at the pump only makes sense when it’s priced below 70% of the cost of gas. While fuel costs vary a lot by region, the biofuel hasn’t been competitive in Brazil’s most important market, Sao Paulo, for much of the past two years. In fact, pure ethanol accounted for about 20% of Brazil’s car-fuel consumption in the past year. That figure rises to 42% when blending is considered, sugar-cane industry group Unica estimates.

And although Brazil’s flex models perform well in comparison to combustion-engine cars globally, they aren’t nearly as clean as the battery-powered vehicles that could replace them if the political will were there. Over the course of a car’s life, a pure EV operating in Brazil would produce half the carbon emissions of a flex vehicle — and less still if the batteries were made domestically instead of in a Chinese factory.

And yet, only 618 fully electric cars were sold in the country during the entire month of June, a pittance for an emerging economy with well over 200 million people. Flex cars reign supreme, and that’s likely to continue, especially if a group of nearly 350 members of Parliament who defend the interests of agribusiness are able to secure for ethanol-fueled cars the same incentives as EVs when an update to the Rota 2030 policy comes out as soon as next month.

“With the public already sold on the reduced environmental impact from driving on ethanol, it makes the argument for switching to a battery considerably more challenging,” said Kevin Riddell, a senior manager at GlobalData.

For now, most automakers operating in Brazil are sticking firm to their commitment to ethanol, but with a new spin: a hybrid model that includes a flex engine, plus a battery.

“It is not about denying the electric vehicles, but ethanol still holds a place in Brazil’s journey for the next 10 to 15 years, especially because hybrids increase efficiency,” said Paula Kovarsky, chief strategy officer at Brazil’s biggest sugar-cane processor, Raizen.

Toyota Motor Corp. has already started selling a hybrid flex version of its Corolla that can run on gasoline, ethanol or electricity. Other major carmakers are plotting a similar path that lets Brazil keep ethanol in the fuel tank.

Stellantis, which sells almost one in three new cars in Brazil, aims to develop its own flex-hybrid technology by the end of this year. China’s BYD, which will build a production complex in the northeastern state of Bahia state, told Bloomberg it will make EVs as well as flex-fuel hybrids. China’s Great Wall Motor plans to start assembling a flex hybrid model locally in 2024; it’s even in talks with Chinese suppliers and local authorities to develop a local supply chain for EV batteries. Brazil is already being aggressively mined for metals including copper and nickel used to make batteries in other countries, and it sits on relevant reserves of lithium, so producing EV parts locally would be a chance for the country to regain some ownership in the energy-transition economy.

“Why should we deny this solution, which needs no additional infrastructure and uses such a clean fuel?” said Rafael Chang, president of Toyota Brazil, when asked about flex-fuel hybrids. Ciro Possobom, the head of VW in Brazil, makes a similar case: “Cars are going to be electric in the future, but that’s going to take a long time,” he said. In the meantime, “we strongly believe in a hybrid with ethanol.”

General Motors Co. is one of the only major carmakers skeptical that ethanol cars have a future in Brazil. The company, which has laid out goals to be carbon neutral by 2040, wants to replicate locally its global focus on EVs. Electric vehicles made in Brazil could be exported to any other country, while flex-fuel cars have only one real market, said Santiago Chamorro, GM’s president for South America. The company also doesn’t think EVs and flex hybrids are equals in terms of carbon emissions.

“Brazil has the potential to be the third-largest global market for electrics,” said Fabio Rua, a vice president at GM South America. “So why would we accept delaying that progress?”

For now, ethanol remains so popular — among consumers as well as policymakers — that during a recent car show featuring more than 40 EVs in the nation’s capital that was meant to highlight the need to build charging infrastructure, Brazilian Vice President Geraldo Alckmin chose to take pictures inside the sole flex-hybrid car on display. While recognizing Brazil’s need to explore EV technology, he also spoke at the event about initiatives for fostering ethanol.

Until Brazil looks beyond ethanol, the country risks stalling out its emissions gains or failing to land a place for itself in the global automotive supply chain.

“Ethanol is a fine fuel, but wrapped in this topic is the desire that many have of not facing the real challenges ahead,” said Robson Cruz, a partner at Barassa & Cruz Consulting and a proponent of electrification. “Addressing carbon emissions with ethanol is cheaper for automakers, but it does not mean that’s the best option for Brazil.”

--With assistance from Tatiana Freitas and Beatriz Reis.

Bloomberg Businessweek