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E15 Approval Timeline and California LCFS: Implications for Corn Ethanol

This article discusses the latest updates on the approval timeline for E15, its impact on older vehicles and non-road engines, and the implications of California's Low Carbon Fuel Standard (LCFS) on corn ethanol. It also explores the challenges and opportunities in the California market for ethanol exports.

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E15 Approval Timeline and California LCFS: Implications for Corn Ethanol

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  1. National Corn Growers Association Agri-Industry Council August 17-19, 2010 Enhanced Ethanol Blends and CA LCFS Shannon Herzfeld and Anthony Reed

  2. E15 Status • EPA’s Announced Approval Timeline • September 2010 • 2007 and Newer Vehicle • November 2010 • 2001 and Newer Vehicles • Current Vehicle Fleet • Vehicles older than 2001 (50%) • Vehicles 2001-2006 (17%) • Vehicles 2007 and newer (33%)

  3. What About Older Vehicles and Non-Road Engines? “Although we continue to evaluate all available information, it has become clear that insufficient data have been submitted on the use of E-15 in older vehicles and non-road engines (such as chain saws and marine engines) to enable EPA to make a decision on a waiver that would allow the use of E-15 for these engines.  EPA will of course review any relevant data that is submitted prior to making its decision.” E-15 Status Update July 2010 – U.S. EPA Website

  4. E12 for All Vehicle Model Years • ADM E12 request – June 7, 2010 • Waiver under the Growth Energy Petition for fuels “up to and including E15” • Substantially Similar Fuel • Oxygen Content / Chemical Characteristics • ADM Technical Data Submission – July 20, 2010 • Blends approaching E12 already in marketplace • EPA allows fuels with oxygen content equal to E12 • Real world data shows E12 compatible with all vehicles

  5. Blends Approaching E12 in the Marketplace Since 1990

  6. CALIFORNIA LCFS

  7. California Low Carbon Fuel Standard (LCFS) • January 1, 2011 • LCFS does not “ban” corn ethanol per se… • Rather, Carbon Intensity (CI) scores make corn ethanol unattractive for compliance • Regulated parties (RPs) must balance credits and deficits annually • CARBOB generates deficits that increase annually • RPs will want to use low carbon fuels that cancel out deficits generated by CARBOB use • Most corn ethanol generates deficits (or not enough credits to cancel deficits) by 2012

  8. Most corn ethanol is not viable by 2011

  9. E15 for all vehicles extends viability of some pathways

  10. Adoption of 13.9 g/MJ extends viability of several pathways

  11. Removal of ILUC penalty extends viability of all pathways; but corn still phases out by 2016

  12. Where’s the Ethanol? • Despite a slight CI advantage over Midwest facilities, it is highly unlikely that new corn ethanol plants will be built in California because CA corn ethanol is not viable by 2014. • Less Brazilian sugarcane ethanol is available for import than CARB is assuming. • Based on current economics and technology timelines, it is unlikely that cellulosic ethanol would make a significant contribution to the LCFS until 2015-2016 at the earliest. • If grain-based ethanol is abandoned, broad commercialization of cellulosic ethanol becomes even more difficult—if not impossible. • Electric, CNG/LNG, and hydrogen vehicles are years away from commercial deployment and will require new infrastructure.

  13. Brazil Ethanol Exports – Can They Supply California?

  14. CA LCFS – Next Steps • Lawsuits Pending • Ethanol Industry • Oil Industry • Possible Adjustment of ILUC value for Corn Ethanol to 13.9 g/MJ • Delay in LCFS implementation Date?

  15. Questions?

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