The California Air Resources Board has adopted a resolution that will integrate the latest research on indirect land use change into the Low Carbon Fuels Standard regulation, meaning the current ILUC penalty for corn ethanol likely will be cut by at least half by the spring of 2011. The Renewable Fuels Association said the resolution is good news for the ethanol industry, but expressed frustration that the changes aren't going to be effective sooner.
Bob Dinneen, president and CEO of the Renewable Fuels Association, asks why would CARB begin a program on January 1 that is based on ILUC numbers that they now freely admit are wrong and inflated? Dinneen believes the changes made in the middle of the year will confuse and disrupt the market.
Much of the decision is based on the results from Purdue modeling runs which generally ranged from 14 to 18 grams of CO2e/mega joule, compared to CARB's current penalty of 30. Wes Ingram of CARB's stationary source division says staff is recommending that we use what is referred to as the 'Group 2' simulation model. Application of this new model reduces land use change for corn ethanol by about one half over the current LCFS value.