Ethanol and California's Low Carbon Fuel Standard

Nathan Chan
December 15, 2024

Submitted as coursework for PH240, Stanford University, Fall 2024

Introduction

Fig. 1: An Ethanol Plant (Source: Wikimedia Commons)

As climate change continues to worsen, more policies are being enacted to promote the adoption of carbon-friendly energy sources. One such example is the Low Carbon Fuel Standard (LCFS) in California, which mandates a year-over-year decrease in the life-cycle carbon intensity of transportation fuel used in the state. Life-cycle carbon intensity refers to all emissions generated in the creation, distribution, and combustion of the fuel. In other words, since the production process of traditional gas is already mostly optimized, the policy promotes alternative sources of energy. [1]

The renewable fuel type that is most directly promoted by the LCFS is biofuel. Biofuels are the result of converting biomass, such as animal waste or plants, into fuel. Of these, the most common type is ethanol, created by fermenting glucose-rich biomass such as corn (Fig. 1). Today, it can be found blended in most types of gasoline already due to the nationwide Renewable Fuel Standard, most commonly in E10 form (10% ethanol). [2]

Opportunity

The LCFS has positioned ethanol to see an uptake in demand, which has the opportunity to present various societal benefits. Firstly, ethanol combusts at a much cleaner rate than gasoline. In fact, though its combustion is not carbon-free, the fuel is considered carbon- neutral. This is because the released carbon dioxide is the same carbon dioxide the plants absorbed for their growth. [3]

Secondly, ethanol contributes to the economy by minimizing waste. The benefit arises from the ethanol industry's willingness to buy surplus corn crops at a premium from Midwest farmers, a transaction facilitated by the $0.51 per gallon tax credit ethanol producers receive.

Finally, ethanol is a fuel that is priced competitively with gasoline. Looking at energy economics, ethanol produces around 70% of the energy that gasoline does. [4] As such, it follows that its price of $1.75 is also around 70% of gasoline in California.

Environmental Challenge

While the increased demand for ethanol encouraged by the LCFS presents many possible benefits, there is a key environmental challenge that must be solved before the biofuel can be sustainably adopted. As previously mentioned, ethanol combustion is considered carbon neutral, as the CO2 released into the atmosphere is the same CO2 absorbed by the corn. However, converting corn to ethanol requires a significant carbon-intensive process: distillation. This is an inefficient 10-step production fueled by coal energy, which accounts for the vast majority of ethanol's carbon footprint. The emissions can be approximated as [5,6]

Coal used for distilling 1 kilogram of ethanol = 0.5 × (13.4 + 21.5) × 106 J kg-1
(2.94 × 107 J kg-1)
= 0.59 kg of coal per kg of ethanol
CO2 emissions from distilling 1 kilogram of ethanol = 0.59 kg × (44/12)
= 2.16 kg of CO2 per kg of ethanol

Therefore, the distillation of a kilogram of ethanol emits approximately 2.16 kilograms of CO2. It should be noted that the precise number for how many Joules are needed to distill one kilogram of ethanol is not fully uncertain. The number ranges from 13.4 to 21.5 megajoules, so this calculation is based on the average of these two numbers. [5] All in all, this shows that while ethanol is considered a carbon-neutral fuel due to its clean combustion, its total carbon cost is actually high.

Conclusion

By mandating a year-by-year decrease in the carbon intensity of fuels, the LCFS supports an increased demand for ethanol. This provides various benefits, including lowering carbon emissions from transportation vehicles and supporting the agriculture industry. However, for the policy to have its desired environmental effect, ethanol production must be optimized to produce less CO2.

It is also noteworthy that this essay only discusses ethanol. However, many other biofuels are also being refined, such as biodiesel made out of recycled vegetable fats, which could also be viable alternatives to traditional gasoline.

© Nathan Chan. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.

References

[1] D. Cullenward, "California's Low Carbon Fuel Standard," Kleinman Center for Energy Policy, University of Pennsylvania, October 2024.

[2] "The Renewable Fuel Standard (RFS): An Overview," Congressional Research Service, R43325, April 2020.

[3] A. M. Mendiburu et al., "Ethanol as a Renewable Biofuel: Combustion Characteristics and Application in Engines," Energy 257, 124688 (2022).

[4] D. J. Peters, "Understanding Ethanol Plant Economics: Will Boom Turn Bust?," Cornhusker Economics, University of Nebraska-Lincoln, 14 Nov 07.

[5] S. Kim and B. E. Dale, "Environmental Aspects of Ethanol Derived from No-Tilled Corn Grain: Nonrenewable Energy Consumption and Greenhouse Gas Emissions," Biomass Bioenergy 28, 475 (2005).

[6] D. Pimentel, "Ethanol Fuels: Energy Balance, Economics, and Environmental Impacts are Negative," Nat. Resour. Res. 12, 127 (2003).