EPA Lifecycle Analysis  of Greenhouse
Gas Emissions from Renewable  Fuels
     As part of proposed revisions to the National Renewable Fuel
     Standard program (commonly known as the RFS program), EPA
analyzed lifecycle greenhouse gas (GHG) emissions from increased
renewable fuels use. The Energy Independence and Security Act of
2007 (EISA) establishes new renewable fuel categories and eligibil-
ity requirements. EISA sets the first U.S. mandatory lifecycle GHG
reduction thresholds for renewable fuel categories, as compared to
those of average petroleum fuels used in 2005. The regulatory pur-
pose of the lifecycle greenhouse gas emissions analysis is to determine
whether renewable fuels meet the  GHG thresholds for the different
categories of renewable fuel.
Lifecycle GHG emissions are the aggregate quantity of GHGs related to the full fuel
cycle, including all stages of fuel and feedstock production and distribution, from
feedstock generation and extraction through distribution and delivery and use of the
finished fuel. The lifecycle GHG emissions of the renewable fuel are compared to the
lifecycle GHG emissions for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005,

EISA established specific greenhouse gas emission thresholds for each of four types of
renewable fuels, requiring a percentage improvement compared to a baseline of the
gasoline and diesel. EISA required a 20% reduction in lifecycle GHG emissions for
any renewable fuel produced at new facilities (those constructed after enactment), a
50% reduction in order to be classified as biomass-based diesel or advanced biofuel,
and a 60% reduction in order to be classified as cellulosic biofuel. EISA provides
some limited flexibility for EPA to adjust these GHG percentage thresholds down-
ward by up to 10 percent under certain circumstances. EPA is proposing to exercise
this flexibility for the advanced biofuels category in this proposal.
United States
Environmental Protection
                                  Office of Transportation and Air Quality
                                                          May 2009

EPA must conduct a lifecycle analysis to determine whether or not renewable fuels produced
under varying conditions will meet the greenhouse gas (GHG) thresholds for the different fuel
types for which EISA establishes mandates. While these thresholds do not constitute a control
on greenhouse gases for transportation fuels (such as a low carbon fuel standard), they do require
that the volume mandates be met through the use of renewable fuels that meet certain lifecycle
GHG reduction thresholds when compared to the baseline lifecycle emissions of petroleum fuel.
Determining compliance with the  thresholds requires a comprehensive evaluation of renew-
able fuels, as well as of gasoline and diesel, on the basis of their lifecycle emissions. EISA defines
lifecycle GHG emissions as follows:

       The term 'lifecycle greenhouse gas emissions' means the aggregate quantity of
       greenhouse gas emissions (including direct emissions and significant indirect
       emissions such as significant emissions from land use changes), as determined by
       the Administrator, related to the full fuel lifecycle, including all stages of fuel and
       feedstock production and distribution, from feedstock generation or extraction
       through the distribution and delivery and use of the finished fuel to the ultimate
       consumer, where the mass values for all greenhouse gases are adjusted to account
       for their relative  global warming potential.1

As mandated by EISA, the greenhouse gas emission assessments must evaluate the full lifecycle
emission impacts of fuel  production including both direct and indirect emissions, including sig-
nificant emissions from land use changes. We recognize the significance of using lifecycle green-
house gas emission assessments that include indirect impacts such as emission impacts of indi-
rect land use changes. Therefore, in our proposal we have been transparent in breaking out the
various sources of GHG  emissions  to enable the reader to readily detect the impact of including
international land use impacts,

EPA has analyzed the lifecycle GHG impacts of the range of biofuels currently expected to
contribute significantly to meeting the volume mandates of EISA through 2022, including those
from domestic and international sources. In these analyses we have used the best science avail-
able. Our analysis relies on peer reviewed models and the best estimate of important trends in
agricultural practices and fuel production technologies as these may impact our prediction of in-
dividual biofuel GHG performance through 2022. We have identified and highlighted assump-
tions and model inputs that particularly influence our assessment and seek comment on these as-
sumptions, the models we have used and our overall methodology so as to assure the most robust
assessment of lifecycle GHG performance for the final rule.

The GHG lifecycle analysis combines a suite of peer-reviewed process models and peer-reviewed
economic models of the  domestic and international agricultural sectors to determine direct and
significant indirect emissions, respectively (see Figure 1). As required by EISA, the broad system
boundaries of our analysis encompass all significant secondary agricultural sector GHG impacts,
not only impacts from land use change.  The analysis uses economic models to determine the
area and location of land converted into cropland in each country as a result of the RES
 Clean Air Act Section 21 l(o)(1)

program. Satellite data are used to predict the types of land that would be converted into crop-
land (e.g. forest, grassland),

EPA's draft results suggest that biofuel-induced land use change can produce significant near-
term GHG emissions; however, displacement of petroleum by biofuels over subsequent years can
"pay back" earlier land conversion impacts. Therefore, the time horizon over which emissions
are analyzed and the application of a discount rate to value near-term versus longer-term emis-
sions are critical factors. We highlight two options. One option assumes a 30 year time period
for assessing future GHG emissions impacts and values equally all emission impacts, regardless of
time of emission impact (i.e.,  0% discount rate). The second option assesses emissions impacts
over a 100 year time period and discounts future emissions at 2% annually.  Several other varia-
tions of time period and discount rate are also discussed in the proposed rule. Table 1  provides
draft GHG emission reductions that result under two time horizon/discount rate approaches
for a sample of fuel pathways evaluated in the proposed rulemaking. Figures 1  and 2 break out
emissions for each of these pathways by lifecycle component (e.g. fuel production, domestic and
international and use change, domestic and international agricultural inputs) for the  two time
horizon/discount rate approaches,

                Table 1. Draft Lifecycle GHG Emission Reduction Results
               For Different Time Horizon And Discount Rate Approaches.
Fuel Pathway
Corn Ethanol (Natural Gas Dry Mill)
Corn Ethanol (Best Case Natural Gas
Dry Mill)2
Corn Ethanol (Coal Dry Mill)
Corn Ethanol (Biomass Dry Mill)
Corn Ethanol (Biomass Dry Mill with
Combined Heat and Power)
Soy -Based Biodiesel
Waste Grease Biodiesel
Sugarcane Ethanol
Switchgrass Ethanol
Corn Stover Ethanol
100 year, 2%
Discount Rate
30 year, 0% Discount
2 Best case plants produce wet distillers grain co-product and include the following technologies:
combined heat and power (CHP), fractionation, membrane separation and raw starch hydrolysis

                Figure 1. Net Lifecycle Greenhouse Gas Emissions By Lifecycle Component With
                               100 Year Time Horizon And 2% Discount Rate.




1 — 1



1 — 1




1 — 1




1 — 1




1 — 1



1 	 1







,=, H
•fr ' '

y ./ s


1 — i





                       • Domestic /\Q (w/o land use change)
                       D International Land Use Change
                       • Tailpipe
                         1 Domestic Land Use Change
                         I Fuel and Feedstock Transport
Dlnternational Ag (w/o land use change)
DFuel Production
                Figure 2. Net Lifecycle Greenhouse Gas Emissions By Lifecycle Component With
                                30 Year Time Horizon And 0% Discount Rate.
9- 4,000,000

E 3,000,000
O 2,000,000

c 1,000,000
O -1,000,000
                       n Domestic Ag (w/o land use change)
                       D International Land Use Change
                       • Tailpipe
                         I Domestic Land Use Change
                         I Fuel and Feedstock Transport
Dlnternational Ag (w/o land use change)
DFuel Production

We believe that our lifecycle analysis is based on the best available science, and recognize that
in some aspects it represents a cutting edge approach to addressing lifecycle GHG emissions.
Because of the varying degrees of uncertainty in the different aspects of our analysis, we con-
ducted a number of sensitivity analyses which focus on key parameters and demonstrate how our
assessments might change under alternative assumptions. By focusing attention on these key pa-
rameters, the comments we receive as well as additional investigation and analysis by EPA will
allow narrowing of uncertainty concerns for the final rule. In addition to this sensitivity analysis
approach, we will also explore options for more formal uncertainty analyses for the final rule to
the extent possible.

Because lifecycle analysis is a new part of the RFS program, in addition to the formal comment
period on the proposed rule, EPA is making multiple efforts to solicit public and expert feedback
on our proposed approach. EPA plans to hold a public workshop focused specifically on lifecycle
analysis during the comment period to assure full understanding of the analyses conducted,
the issues addressed and the options that are discussed. We expect that this workshop will help
ensure that we receive submission of the most thoughtful and useful comments to this proposal
and that the best methodology and assumptions are used for calculating GHG emissions impacts
of fuels for the final rule. Additionally, between this proposal and the final rule, we will conduct
peer-reviews of key components of our analysis. As explained in more detail in the section VI of
the proposal, EPA is specifically seeking peer review of:  our use of satellite data to project future
the type of land use changes; the land conversion GHG emissions factors estimates we have
used for different types of land use; our estimates of GHG emissions from foreign crop produc-
tion; methods to account for the variable timing of GHG emissions; and how the several models
we have relied upon are used together to provide overall lifecycle GHG estimates.

Each component of our analysis is discussed in detail in the preamble and the Draft Regulatory
Impact Analysis that accompany the Notice of Proposed Rulemaking. The proposed rule is an
important opportunity to seek public comment on EPA's entire lifecycle GHG  analysis,  includ-
ing questions about land use modeling, and the choice of which  time horizon and discount rate
is most appropriate for this analysis.
For More Information
For more information on this proposal, please contact EPA's Office of Transportation and Air
Quality, Assessment and Standards Division information line at:
          U.S. Environmental Protection Agency
          Office of Transportation and Air Quality
          2000 Traverwood Drive
          Ann Arbor, MI48105

          Voicemail: (734) 214-4636
          E-mail: asdinfo@epa.gov

Or visit: www.epa.gov/otaq/renewablefuels/index.htm