Biofuels are an important tool to help decarbonize our transportation system, and their role will likely grow in coming years. New tax credits authorized under the Inflation Reduction Act are being finalized; these would offer significant incentives for the biofuel alternatives to conventional jet fuel, so-called “Sustainable Aviation Fuels” or SAF. But it’s not always clear how sustainable these fuels truly are, or whether they offer a significant GHG advantage over petroleum. The proposed SAF tax credits limit eligibility to fuels that offer at least a 50% reduction in life cycle GHGs compared to petroleum and give additional incentives to those that exceed that threshold.

Advanced fuel technologies – such as those that use inedible wastes, hydrogen, or fuels synthesized using renewable electricity – may eventually deliver very low carbon fuels, but they have yet to emerge at commercial scale. This means that current biofuel technologies that use food crops like corn or soybean oil, are likely to receive most of these tax credits for the next several years, at least. Assessing the GHG benefits of current biofuels requires a descent into the wonky world of lifecycle analysis—measuring the total emissions through farming, processing, and consumption. Much of this is fairly straightforward, by the standards of researchers and expert analysts, until one gets to the use and displacement of land.

While crop-based biofuels can reduce GHG emissions when used in place of petroleum fuels, they compete against food crops for arable land. When biofuel production increases demand for agricultural commodities like corn or vegetable oil, growers often meet this demand by expanding their planted area. Clearing land for cultivation releases much of the carbon stored in plants and soil into carbon dioxide, a greenhouse gas and the primary driver of climate change. This process of biofuel demand causing land conversion is known as Indirect Land Use Change (ILUC), and it has been a point of deep contention around biofuels over the past 20 years.

Experience has taught us that we ignore ILUC at our peril. European attempts to increase the use of biodiesel in the 2000’s overlooked the issue of emissions from land clearing. This led to widespread slashing and burning of tropical rainforest to expand palm oil plantations, much of it on sensitive high-carbon peat soil. Over 6 million hectares of tropical rainforest was lost in Indonesia and Malaysia between 2000 and 2012, demand for biofuels accounted for as much as half of this. Emissions from this conversion dramatically outweighed the benefits from additional biofuels.

Over the next few years, the key question for policy makers is: should we incentivize the consumption of more crop-based fuels, such as those made from corn or soybean oil and, if so, how much? Understanding the impacts of ILUC and getting the question right is essential to ensuring our climate policies actually reduce emissions.

All models are wrong, some models are useful

Estimates of ILUC arising from crop-based biofuel production are highly uncertain. The lowest estimates rate crop-based biofuels as up to 50% less carbon intensive than petroleum gasoline or diesel, while the highest estimates suggest that they’re several times more carbon intensive than petroleum.

Estimates of ILUC factors found in literature for a variety of fuels. Height of the gray bar represents the mean, black “x” represents the median, with uncertainty bars covering the full range of ILUC factors, and the numbers showing the number of studies contributing data points to each category. Red line shows the typical carbon intensity of petroleum. Source: Woltjer et al. (2017)

This uncertainty is due to three main factors:

1. Complexity. Accurately modeling ILUC means accurately modeling the entire global agricultural commodity system, and the decisions of millions of individuals that make it up. Reducing this complex, dynamic system down to a single, fixed number is an impossible task, but nonetheless necessary to create a stable regulatory structure.
2. Subjectivity. There’s no perfectly objective method for analyzing emissions from complex systems, like biofuel production or ILUC emissions. Modelers must set system boundaries and allocate impacts between products. Soybeans, for example, yield oil and high-protein meal, used as food for livestock or people. Assigning energy and pollution burdens to each of these is a subjective process. Two analyses of the same product can use equally valid assumptions and result in widely differing estimates of GHG impact.
3. Calibration and validation. Developing ILUC models requires calibrating against real-world data about how growers make decisions about what to grow and where. These data are often incomplete, non-public, hard to interpret, or unavailable. More importantly, historical data don’t include future climate change impacts. We know that rising temperatures and changing weather patterns will make some highly productive growing areas too hot or dry to maintain yields, and other areas will become fertile. These factors will change how and where growers choose to expand cultivation – which means today’s ILUC model predictions will necessarily be calibrated with unrepresentative data.

Due to these challenges, estimates produced by any ILUC model will be rough representations of a dynamic system, based on subjective assumptions, and calibrated against data that does not reflect the world we’re trying to make policy for. In plain language: they’re going to be wrong. The thing is, there are a lot of different ways to be wrong, some of them worse than others. The question for policy makers in this case is: What’s the right way to be wrong

How to Make Decisions When Models Are Wrong

A perfect fuel policy would provide enough support to crop-based biofuels to maximize near-term decarbonization, but not so much that demand for agricultural products soars and exacerbates ILUC-driven emissions.

In a perfect world, we would use a perfect ILUC assessment to perfectly align incentives with real-world impacts, but that’s not possible in this case, so it helps to think through what happens when we’re wrong. Overestimating ILUC’s impact means biofuels will have higher carbon intensity scores on regulatory assessments, and so fewer of them will be eligible for credits and we would expect to see less of them enter the market; overestimating ILUC would therefore lead to consuming less than the theoretically optimal amount of crop-based biofuels. Underestimating ILUC’s impact means biofuels will have lower carbon intensity scores, more would be eligible for policy support and we would expect to over-consume them compared to a theoretical ideal.

If we get biofuel policy wrong in a way that causes us to under-consume biofuels, then we miss opportunities to reduce GHG emissions. Every billion gallons of renewable diesel made from soybean oil could offer the opportunity to reduce GHG emissions by about three million tonnes of CO₂ equivalent.^[1] This is not a trivial or meaningless loss. We know we must reduce emissions very quickly in coming years in order to achieve carbon neutrality by mid-century, and soybean oil based biofuels have demonstrated commercial success already.

There are significant GHG impacts of over-consuming biofuels, as well. Each billion gallons of soybean oil based renewable diesel requires about 15 million acres of land to grow – roughly the size of West Virginia. If this land were grassland in the U.S. Midwest before being converted to cultivation, the GHG emissions from land use change alone would be over two million tonnes of carbon equivalent, and much more if it were forested or land with high-carbon soil that was converted.

These direct GHG impacts are only part of the story, however. As we dig deeper into the risks associated with over- and under-estimation, critical differences arise.

1. Timing. Carbon in land accumulates slowly but is lost quickly. Plants remove CO₂ from the air over time, storing it as solid carbon and accumulating as organic matter in the soil. Converting natural land to cultivation releases that carbon in a matter of weeks to a few years. Once it’s lost, it often takes decades to recover, if it recovers at all.
2. Diminishing returns. Higher-yielding land is likely to be converted from carbon-storing natural cover to crops first. Each additional million acres of cultivated land is likely to yield a bit less than those that were converted before it. As total demand increases, the additional land needed for every extra unit of production is expected to increase.
3. Political momentum.  It is easier for politicians and regulators to give support to businesses than to withdraw it. Removing support can also reduce the effectiveness of future climate policy; if governments signal, via policy incentives, that investors should back biofuel projects and then quickly withdraw the incentives, those same investors would be justifiably skeptical about trusting other climate policy incentives. Starting off with lower levels of support and adding mores in the future, on the other hand, avoids sending mixed signals to the market.

These issues show that the risks entailed from under- or overshooting optimal biofuel production volume are not equal. Insufficient support for crop-based biofuels could cost us the opportunity to reduce emissions, but excessive support for them could be significantly worse. Land conversion causes a loss of stored carbon that cannot be reversed on a time scale that allows us to meet mid-century GHG targets. Once over-production of biofuels occurs, any attempt to correct it could lead to stranded assets and break financial markets’ trust that policy signals are a reliable guide when making investment decisions.

We know that ILUC analysis is difficult to get right, and we cannot count on developing a model to predict the optimum level of crop-based biofuel consumption any time soon. If we can’t be sure we’re right, we should make a decision that recognizes the profoundly asymmetric risks around biofuel consumption. The risks entailed with underestimating ILUC impacts are far worse than the risks of overestimating them, so we should err on the side of overestimation.

Developing a Risk-Aware Approach to Biofuels

In practical terms, this means the arguments over which ILUC model is best are not terribly helpful since every model is going to be inaccurate. Instead, we should look at the full range of ILUC estimates we get from the many approaches of ILUC estimation that have been put forward by researchers. We’re relatively confident that the correct answer lies somewhere within this very wide range. The risk-aware approach to biofuel policy is to select a number high enough that it’s very unlikely we underestimate the real value.

“High enough to not be an underestimate” is still not precise enough to be helpful. Other landmarks can help us get closer to a risk-aware ILUC impact estimate. We know, based on extensive scientific research, that fuels from wastes and residues generally have lower ILUC impact, and that fuels from palm oil are very likely to be worse than the petroleum they try to displace. An effective ILUC assessment should align with the ample scientific evidence on these topics.

Support for additional research and modeling can help us both narrow the range of uncertainty around this issue, as well as identify what ILUC impact value within that range should be chosen to yield the best possible result. Expert-driven consultative processes, like the National Academies committee on biofuel life cycle assessment or CORSIA workgroups developing sustainability and GHG assessment methods can serve a vital role here, not only as clearinghouses for the latest research in this space but also to allow stakeholders to engage with the process. These groups can find mutually acceptable approaches to some, though certainly not all, of the subjective decisions that are an unavoidable part of LCA.

Just as there is no perfect ILUC model, there is no simple solution to alternative fuels. We know, however, that it’s going to be virtually impossible to meet critical decarbonization targets without lower-carbon liquid fuels. Avoiding the worst impacts of climate change will require risk-aware policies that succeed without perfect modeling. In the case of crop-based biofuels, it’s quite clear that the worst risks arise when we underestimate ILUC impacts. We know that our attempts to quantify ILUC risk are likely to be wrong, but we also know that there’s a less-damaging way to be wrong in this case. Policy should reflect this reality.

---

Colin Murphy is the Deputy Director of the UC Davis Policy Institute for Energy, Environment, and the Economy, and the co-Director of the Low Carbon Fuel Policy Research Initiative there. Any statements or inaccuracies herein are solely the responsibility of the author and should not be taken as representing UC Davis or the Policy Institute.

The material in this blog was originally presented as part of the EPA National Center on Environmental Economics seminar series, a recorded version is available via the UC Davis Low Carbon Fuel Policy Research Initiative website. The author would like to gratefully acknowledge the assistance of Amber Manfree, Dan Sperling, and John Schmitz in helping develop and refine this material.

 

^[1] Assuming 65 gCO2e/MJ carbon intensity (derived from approximate average CI of such fuels under California’s LCFS), and that each gallon of renewable diesel displaces 1 gallon of petroleum diesel with 91 gCO2e/MJ carbon intensity (approximate average of U.S. diesel supply).

At the UC Davis Policy Institute for Energy, Environment, and the Economy and the Institute of Transportation Studies, we hope to shine a light on which transportation bills might yield benefits to our communities and the environment. Of the 2,600 bills introduced to the California State Legislature in 2023, here are some of the most important for transportation and energy.

Top Bills about Public Transit

Senate bill (SB) 434 is sitting on the governor’s desk. It was introduced by a savvy transportation lawmaker, Senator Min (a former law professor at UC Irvine). This bill would allocate funds to district public transit operators for rider safety surveys and outreach efforts. The survey would collect data regarding street harassment experienced by riders from underrepresented populations. The bill expands on San Jose State University research that found that “sexual harassment experienced by riders on buses and trains leads to reduced use of public transportation.” This bill would require transit agencies to collect and publish information on harassment reported by populations of interest including females, particularly those of color, those with low-income, and those in LGBTQ+ communities.

Another notable transit bill on the governor’s desk is Assembly Bill (AB) 971, introduced by Assemblymember Lee, which would amend the Vehicle Code to reflect the term “transit-only” instead of “for the exclusive use of public transit buses” when granting exclusive use of designated traffic lanes. ITS research supports the fact that transit-only lanes can encourage more ridership by improving bus speed and reliability. However, this bill is more procedural than substantive. It falls short of giving transit agencies what they really need, (but which local government’s hold the key) which is more control over where transit-only lanes crosscut busy roadways.

Despite many previous attempts to advance fare-free transit, this is not the year for Assemblymember Holden, a long-time transit advocate, to win on this issue. Holden’s AB 610 would have established the Youth Transit Pass Pilot Program and provided free transit service to youths attending certain qualifying educational institutions. It failed in its very last committee. Youth fare-free transit passes can increase accessibility and transit use among students, according to UC Irvine researcher Jean-Daniel Saphores. So far, the state has not found long-term sustainable funding sources for such programs.

Top Bill about Bikes

Also on the governor’s desk is SB 381, introduced by Senator Min. If signed, it will fund research on electric bicycle safety and regulation. Electric bicycles are defined as bicycles with fully operable pedals and a motor of less than 750 watts. UC Davis researcher Dillon Fitch has shown that the availability of shared e-bikes can reduce vehicle miles traveled. More research is necessary to understand safety and regulatory challenges that might inhibit scaling of e-bikes.

Bills about Emerging Technologies

The Legislature is attempting to prevent safety issues with medium and heavy-duty automated vehicles (AVs) weighing more than 10,000 lbs. These vehicles are currently not allowed to operate in the state due to a previous ban from the California Department of Motor Vehicles (DMV). AB 316 would add more limitations to the existing ban, requiring a safety driver in all automated trucks. It would also require more collision and deactivation data reporting and require the DMV to submit a performance evaluation regarding AV technology to the Legislature in five years. Researchers at UC Davis are currently studying this topic to assess whether AV safety driver requirements are the best way to increase road safety in the state. AB 316 passed the Legislature and is on its way to the governor’s desk for a signature or veto.

SB 800, authored by Senator Caballero, would require Caltrans to establish the Advanced Air Mobility and Aviation Electrification Advisory Panel. The panel would be tasked with assessing current infrastructure, developing a three year plan to advance infrastructure, and promoting pathways towards equitable access to advanced air mobility services. Members would include government and industry representatives. UC Berkeley, in partnership with NASA, is pursuing research that looks at how urban air mobility could fundamentally revolutionize regional travel.

Bills about Carbon Offsets

AB 1305, a carbon markets bill, is on the governor’s desk. This bill would add clarity to public reporting of carbon offset purchasing, which is an area that could use additional public accountability mechanisms. A sister bill, SB 390, is also on the governor’s desk. It is similarly intended to provide clearer standards for voluntary carbon offsets by defining unlawful conduct and requiring sellers and buyers to provide explicit information. Improving the transparency of carbon offset is critical to the effective functioning of the State’s carbon market. These proposed bills aim to enhance the credibility and confidence of private investors within the green energy sector.

Some Wins and Losses for Electric Vehicles

Finally, it’s worth noting a few losses and one big win for California legislative actions on EVs. The winner first, AB 126 will extend certain vehicle fees till 2035 that fund state programmatic investment in a clean transportation future. There’s a few new EV priorities added to the updated program, including a requirement that half of funding goes to disadvantaged and low-income communities, and new requirements for data reporting for EV charging reliability. The bill requires new research led by the California Energy Commission to consider alternative funding strategies for ZEV infrastructure, and consider the equity impacts of the alternatives.

Other EV bills are worth noting, even though they didn’t make it out of the Legislature. These three bills failed to make it to the governor’s desk: 

AB 591, introduced by Assemblymember Gabriel, would have forced Tesla to open charging stations to the public and require universal connectors and public accessibility at almost all new and retrofitted EV charging stations, except those located at single- or multi-family residences. This bill would also have required CHAdeMO EV service equipment be maintained in good working conditions by owners for at least five years. UC Davis researcher Gil Tal suggests that charger reliability, including the prevention of highly disruptive charging failures, is a high priority for EV drivers. The challenge is that charger owners would prefer not to bear the costs of supporting charging standards for which there are very few vehicles on the road, such as CHAdeMO. This bill didn’t make it out of its second round of committees in time, but if legislators and stakeholders can find the right solution, it could still pass in next year’s legislative session.

Another EV bill worth noting is SB 529, which would have facilitated EV sharing services at affordable housing facilities. This type of program would have been transformational and expanded access to EVs in lower-income communities. UC Davis researchers Caroline Rodier and Brian Harold have done extensive work demonstrating that low-income EV carsharing in the San Joaquin Valley has successfully expanded access to EVs with short-term vehicle rentals to people living in low-income communities. These rental programs are a game-changer for rural community members, and will be an essential part of building an equitable and clean transportation system in California. This bill didn’t get the support it needed this year, but it was authored by Senator Gonzalez, Chair of the Senate Transportation Committee and champion for equitable transportation, so we will likely see this issue raised in future legislative sessions.

Another hot topic that didn’t advance through the Legislature was SB 425, introduced by Senator Newman. This bill would have expanded rebates for new electric pickup trucks. Rebates for electric pickup trucks would be $2,500 greater than rebates provided for other electric vehicles. This bill may not have advanced because additional research is needed to understand the role of EV pickup trucks in the overall clean vehicle fleet.

Conclusions and Looking Ahead

Governor Newsom has until October 14 to act on these bills. We’ll be watching out for which bills advance this year, and which topics may need more research and deliberation.

____

Mollie Cohen D’Agostino is Executive Director of the Mobility Science, Automation and Inclusion Center at the Institute of Transportation Studies at UC Davis

Colin Murphy is Deputy Director of the UC Davis Policy Institute for Energy, Environment and the Economy

Emily Chiu is a law student at the UC Davis School of Law

Laedon Kang is a Graduate Student at the UC Davis Transportation, Technology, and Policy Program

Dan Sperling is Founding Director of the UC Davis Institute of Transportation Studies, and distinguished Blue Planet Prize Professor of Engineering and Environmental Policy

The impacts of lithium-ion batteries on low- and middle-income countries are increasing as the global electric vehicle (EV) market continues to grow. The environmental and health burdens of production mainly affect countries that supply raw materials for EV batteries, while increasing exports of used EVs are going to poorer countries.

In the absence of strategic policies, the positive impacts of new EVs—such as decreased pollution and greenhouse gas emissions—could disproportionately benefit higher-income countries, while the negative impacts of second-hand EVs—such as battery disposal—could fall more on lower-income countries. 

To shed light on this problem and outline possible policy solutions, researchers at ITS-Davis collaborated with the United Nations Environment Programme (UNEP) and produced a March 2023 report entitled Electric Vehicle Lithium-ion Batteries in Lower- and Middle-income Countries: Life Cycle Impacts and Issues. Alissa Kendall, lead author and UC Davis professor of Civil and Environmental Engineering highlighted the aims of the study:

“The exponential growth of new EV sales in regions like Europe and the US is exciting to see given the key role that vehicle electrification will play in decarbonizing the transport sector. Second-hand or used vehicles from high-income regions are important sources of lower-cost vehicles in many lower- and middle-income countries, so the rapidly changing fleets have implications for the vehicles available in these regions. Unlike engines and other powertrain components in gasoline and diesel vehicles, which can be repaired, EV batteries aren’t as repairable, and as they age, their capacity and power inevitably fade. We undertook this research to make a first estimate of the magnitude of internationally traded second-hand EVs in the coming decades, and then explored the potential impacts, risks, and benefits to lower- and middle-income countries.”

The report and Figure 1 describe the life-cycle of lithium-ion batteries (LIBs)—from mineral extraction, to use in original vehicles, to secondary use in 2- and 3-wheel vehicles and microgrids, and finally disposal and recycling of components.

The impact of second-hand EVs and batteries in lower- and middle-income countries, and whether they provide a net benefit or impact, is a function of the EV battery state-of-health at the time of import, the potential for repairing or replacing the battery, the availability of charging infrastructure, and the energy resources (fossil-fuel or renewable) used to charge batteries.

The authors of the report conducted an extensive literature review, consulted with an expert in a major used-EV importing country (Sri Lanka), and analyzed data from multiple sources on EV sales, imports, and exports. This last endeavor revealed major discrepancies in vehicle numbers reported by paired exporting and importing countries, such as the US and Mexico shown below.

Policy suggestions stemming from this research, include:

• Upon export, provide information on battery condition, technical information for safe repair and repurposing of batteries, and data on the movement of second-hand vehicles.
• Ensure that secondary parties other than battery and vehicle manufacturers have the right to repair batteries and EVs and have access to real-time information on battery condition.
• Create a harmonized reporting system for collecting data at the point of export and import.
• Institute export and import controls, such as minimal requirements for the state-of-health of batteries.

Such measures can help prevent second-hand EV and battery exports from becoming a least-cost disposal option for exporting markets, burdening rather than benefiting importing markets.

 

---

Seth Karten is a science writer at ITS-Davis.