GAO Report Gets Mixed Reviews from Ethanol Groups

Cindy Zimmerman

Ethanol organizations received a Government Accounting Office report on biofuels this week with mixed reviews.

On the plus side, the GAO report indicated that using indirect land use change to evaluate the lifecycle greenhouse gas emissions for biofuels under the Renewable Fuel Standard may be difficult due to uncertainty in how that can accurately be measured. According to the report, “Many researchers told GAO there is general agreement on the approach for measuring the direct effects of biofuels production on lifecycle greenhouse gas emissions but disagreement about how to estimate the indirect effects on global land use change, which EPA is required to assess in determining RFS compliance. In particular, researchers disagree about what nonagricultural lands will be converted to sustain world food production to replace land used to grow biofuels crops.”

That pleased Growth Energy CEO Tom Buis. “On the unsettled science of International Indirect Land Use Change, the GAO has come down firmly on our side of the debate: there is no scientific consensus on ILUC,” Buis said in a statement. “As we’ve said all along, ILUC is a concept and a theory – it is not proven, and there is no agreement in the scientific community that if it exists, how it can be accurately measured. We agree completely with GAO’s assessment that the proposal to incorporate ILUC into RFS would greatly complicate the agency’s ability to complete writing this rule.”

On the downside, the report suggests elimination of the 45 cent per gallon blenders tax credit for mixing ethanol with gasoline. The GAO report says the Volumetric Ethanol Excise Tax Credit (VEETC) “may no longer be needed to stimulate conventional corn ethanol production because the domestic industry has matured, its processing is well understood, and its capacity is already near the effective RFS limit of 15 billion gallons per year for conventional ethanol.”

The Renewable Fuels Association disagrees. “The tax incentive has been instrumental in helping to build a renewable fuels industry in this country. It should remain,” the organization responded in a statement. “As long as petroleum and fossil fuel companies that dominate the energy market continue to receive preferential tax treatment and hidden subsidies, incentives are needed to develop renewable alternatives such as ethanol.”

Read the full GAO report here.

Ethanol, Government, Growth Energy, Indirect Land Use, RFA