Global Biofuels Blog

The CDM EB adopted a ground breaking methodology (ACM0017) in 2010 which allows for biodiesel production (not consumption) to be registered as a CDM project (generating CER) under the UNFCCC framework. This is a break from previous regulations and big step forward in recognizing the potential role of biodiesel in combating climate change. Not surprisingly, biodiesel¹ producers are optimistic about the positive impact of the new methodology in aiding the development of their industry.

The new methodology had various stringent criteria to ensure the GHG abatement potential of biodiesel from a life cycle perspective. Firstly, the feedstock for biodiesel production need to be from a new plantation on degraded/degrading land that has been dedicated to the production of biodiesel feedstock.  Secondly, this methodology is only eligible for biodiesel produced and used within the host country and for vehicles; it must be a captive fleet.  Lastly, stringent checks are expected at both the blending and consumption levels.

Looking deeper, the real benefit of the new methodology might not be as optimistic as most would have hoped for it to be. Dedicated plantations increase the business risks to plantation owners. Consumption criteria limit the market and stringent monitoring requirement add to business costs. The beneficiaries of this new methodology will most likely be biodiesel producers supplying to domestic public transportation, government vehicle fleets as well as hardy and locally consumed feedstocks that are more likely to grow on degraded lands such as jatropha. However, the eventual economic feasibility of this methodology in benefiting biodiesel production will depend on the relative cost of monitoring consumption and terra-treating of degraded land to achieve crop productivity and benefit that could be derived in the form of revenue from CER.

Furthermore, as this methodology is only applicable for blend levels above the mandated level in the host country, its adoption might somewhat have an impact on the implementation of biodiesel mandates in developing countries.

The Global Biofuels Center will analyze this issue further in its upcoming Special Report: Carbonomics 2 scheduled for release early 2010.

1) Biodiesel is defined as FAME produced by the esterification of vegetable and/or waste oil with alcohols from biogenic and/or fossil origin.

 On Friday the U.S. House of Representatives approved the American Clean Energy and Security Act (H.R. 2454) by vote of 219 yeas to 212 nays.  The comprehensive climate change and energy legislation, which serves to advance President Obama’s environmental agenda, was 1,500 pages in length with more than 200 amendments considered.  The Senate now plans to take up climate/energy legislation this fall.

With respect to biofuels, only the democrats “manager amendment” was approved during the floor debate of the bill.  Proponents of the legislation, Rep. Henry Waxman (D-California) and Rep. Edward Markey (D-Massachussets), along with the House leadership cut a deal with Rep. Collin Peterson (D-Minnesota) who vowed he would not support the bill and take other democrats with him unless the legislation included a provision restricting the consideration of indirect land use change (ILUC) GHG emissions provisions in the current RFS2 proposed regulation.  (Mind you, Rep. Peterson was a co-sponsor and voted for the VERY SAME legislation that included these provisions, the 2007 Energy Independence and Security Act, but nobody except me seems to be pointing that important fact out!)

Peterson got his way.  The ILUC provisions restrict EPA from incorporating ILUC impacts when determining GHG lifecycle emissions for biofuels at least over the next five years while federal government agencies study the issue (plus one additional year for findings to be considered by Congress).  It makes sense to me to take a step back and fully study the best and most appropriate methodologies for analyzing such a controversial and complex issue(s).  Will the Senate do the same?  Who knows.  We speculate that the legislation as a whole will be much more controversial in the Senate and thus less likely to pass (ILUC or not) - at least this year.  What does that mean?  ILUC provisions in the RFS2 will stay in the final regulation to be released late this year, and I’m guessing, without many changes.