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Biofuel Isn’t As Carbon Neutral As We Want It to Be

Claudia Baldwin

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If you’ve pumped gas at a U.S. service station over the past decade, you’ve put biofuel in your tank. Thanks to the federal Renewable Fuel Standard (RFS), almost all gasoline sold nationwide is required to contain 10 percent ethanol — a fuel made from plant sources, mainly corn.

With the recent rise in pump prices, biofuel lobbies are pressing to boost that target to 15 percent or more. At the same time, some policymakers are calling for reforms. For example, a bipartisan group of U.S. senators has introduced a bill that would eliminate the corn ethanol portion of the mandate.

Enacted in the wake of the attacks of Sept. 11, 2001, the RFS promised to enhance energy security, cut carbon dioxide emissions and boost income for rural America. The program has certainly raised profits for portions of the agricultural industry, but in my view it has failed to fulfill its other promises. Indeed, studies by some scientists, including me, find that biofuel use has increased rather than decreased CO2 emissions to date.

Current law sets a target of producing and using 36 billion gallons of biofuels by 2022 as part of the roughly 200 billion gallons of motor fuel that U.S. motor vehicles burn each year. As of 2019, drivers were using only 20 billion gallons of renewable fuels yearly — mainly corn ethanol and soybean biodiesel. Usage declined in 2020 because of the pandemic, as did most energy use. Although the 2021 tally is not yet complete, the program remains far from its 36 billion-gallon goal. I believe the time is ripe to repeal the RFS, or at least greatly scale it back.

Higher profits for many farmers

The RFS’s clearest success has been boosting income for corn and soybean farmers and related agricultural firms. It also has built up a sizable domestic biofuel industry.

The Renewable Fuels Association, a trade group for the biofuels industry, estimates that the RFS has generated over 300,000 jobs in recent years. Two-thirds of these jobs are in the top ethanol-producing states: Iowa; Nebraska; Illinois; Minnesota; Indiana; and South Dakota. Given Iowa’s key role in presidential primaries, most politicians with national ambitions find it prudent to embrace biofuels.

The idea that biofuels are good for the environment rests on the assumption that they are inherently carbon neutral. But subsequent research has shown that they are not.

The RFS displaces a modest amount of petroleum, shifting some income away from the oil industry and into agribusiness. Nevertheless, biofuels’ contribution to U.S. energy security pales compared with gains from expanded domestic oil production through hydraulic fracturing — which brings its own severe environmental damages. And using ethanol in fuel poses other risks, including damage to small engines and higher emissions from fuel fumes.

For consumers, biofuel use has had a varying, but overall small, effect on pump prices. Renewable fuel policy has little leverage in the world oil market, where the biofuel mandate’s penny-level effects are no match for oil’s dollar-scale volatility.

Biofuels are not carbon-neutral

The idea that biofuels are good for the environment rests on the assumption that they are inherently carbon neutral — meaning that the CO2 emitted when biofuels are burned is fully offset by the CO2 that feedstocks such as corn and soybeans absorb as they grow. This assumption is coded into computer models used to evaluate fuels.

Leading up to passage of the RFS, such modeling found modest CO2 reductions for corn ethanol and soybean biodiesel. It promised greater benefits from cellulosic ethanol — a more advanced type of biofuel that would be made from nonfood sources, such as crop residues and energy crops such as willow and switchgrass.

But subsequent research has shown that biofuels are not actually carbon-neutral. Correcting this mistake by evaluating real-world changes in cropland carbon uptake reveals that biofuel use has increased CO2 emissions.

One big factor is that making biofuels amplifies land-use change. As harvests are diverted from feeding humans and livestock to produce fuel, additional farmland is needed to compensate. That means forests are cut down and prairies are plowed up to carve out new acres for crop production, triggering very large CO2 releases.


About 40 percent of corn produced in the U.S. is used to make ethanol. Image courtesy of Shuli Hallak via Getty Images.

Expanding farmland for biofuel production is also bad for the environment in other ways. Studies show that it has reduced the abundance and diversity of plants and animals worldwide. In the U.S., it has amplified other adverse impacts of industrial agriculture, such as nutrient runoff and water pollution.

The failure of cellulosic ethanol

When Congress expanded the biofuel mandate in 2007, a key factor that induced legislators from states outside the Midwest to support it was the belief that a coming generation of cellulosic ethanol would produce even greater environmental, energy and economic benefits. Biofuel proponents claimed that cellulosic fuels were close to becoming commercially viable.

Almost 15 years later, in spite of the mandate and billions of dollars in federal support, cellulosic ethanol has flopped. Total production of liquid cellulosic biofuels has recently hovered around 10 million gallons per year — a tiny fraction of the 16 billion gallons that the RFS calls for producing in 2022. Technical challenges have proved to be more daunting than proponents claimed.


Making cellulosic ethanol from plants such as switchgrass is complicated and remains unaffordable despite large subsidies. Image courtesy of Karen Kasmauski via Getty Images

Environmentally speaking, I see the cellulosic failure as a relief. If the technology were to succeed, I believe it would likely unleash an even more aggressive global expansion of industrial agriculture — large-scale farms that raise only one or two crops and rely on highly mechanized methods with intensive chemical fertilizer and pesticide use. Some such risk remains as petroleum refiners invest in bio-based diesel production and producers modify corn ethanol facilities to produce biojet fuel.

Ripple effects on lands and Indigenous people

Today the vast majority of biofuels are made from crops such as corn and soybeans that also are used for food and animal feed. Global markets for major commodity crops are closely coupled, so increased demand for biofuel production drives up their prices globally.

This price pressure amplifies deforestation and land-grabbing in locations from Brazil to Thailand. The Renewable Fuel Standard thus aggravates displacement of Indigenous communities, destruction of peatlands and similar harms along agricultural frontiers worldwide, mainly in developing countries.

Some researchers have found that adverse effects of biofuel production on land use, crop prices and climate are much smaller than previously estimated. Nevertheless, the uncertainties surrounding land use change and net effects on CO2 emissions are enormous. The complex modeling of biofuel-related commodity markets and land use is impossible to verify, as it extrapolates effects across the globe and into the future.

Rather than biofuels, a much better way to address transportation-related CO2 emissions is through improving efficiency, particularly raising gasoline vehicle fuel economy while electric cars continue to advance.

A stool with two weak legs

What can we conclude from 16 years of the RFS? As I see it, two of its three policy legs are quite wobbly: Its energy security rationale is largely moot; and its climate rationale has proved false.

Nevertheless, key agricultural interests strongly support the program and may be able to prop it up indefinitely. Indeed, as some commentators have observed, the biofuel mandate has become another agribusiness entitlement. Taxpayers probably would have to pay dearly in a deal to repeal the RFS. For the sake of the planet, it would be a cost worth paying.

This article is republished from The Conversation under a Creative Commons license.

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Is Climate Tech the Hottest Corner of the VC Business in the 2020s?

Claudia Baldwin

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This is an excerpt from “Climatenomics: Washington, Wall Street, and the Economic Battle to Save Our Planet” (Rowman & Littlefield, 2022). Reprinted by permission of the publisher.

While government policies and leadership from Washington can help accelerate change, there’s another place that can accelerate change much faster: Silicon Valley.

In 2003, as a national technology reporter for a chain of newspapers, I visited the Mountain View, California campus of Google to meet with cofounder Sergey Brin. At the time, Google was still a private company, though there was widespread speculation that it would launch an initial public offering soon. The moment I pulled into the company parking lot, I got a taste that Google wasn’t a typical company. Covering many of the parking spaces were canopies made from solar panels, something that’s commonplace today but back then was pretty unusual. Even more unusual were the thick power cords hanging down from the panels over nearly every parking space, something that didn’t make sense until Brin and team later explained it to me. At the time, electric vehicles were even more uncommon than solar parking lot canopies (the first Tesla wouldn’t hit the streets for another five years). But Google knew EVs were coming someday soon, and it wanted to be ready. Google also wanted employees and other visitors to think about the possibilities that could come with solar-powered parking lots and cars that you could plug in to refuel.

Two of the forward-thinking people responsible for Google’s early solar deployment were Chris Sacca, who as the company’s corporate counsel and later head of special initiatives was involved in Google’s energy purchase agreements, and Andrew Beebe, who was chief commercial officer at solar company Suntech, which helped Google go solar.

“There really wasn’t any corporate interest until those guys stepped up and said, ‘Please build solar arrays all over our campus,'” Beebe recalled during a GreenBiz VERGE [climate] tech conference in October 2021. “But (Google executives) also said, ‘Set it up so we can have Walmart and Cisco and Microsoft and all of our competitors come over and see what we have done.’ They obviously had a hugely catalytic role in making all this happen.”

Both Beebe and Sacca would go on to become successful venture capitalists, Beebe with Obvious Ventures, the firm that helped launch companies such as Medium, Beyond Meat and electric bus maker Proterra, and Sacca with his firm called Lowercase Capital, which funded companies such as Twitter, Uber and Instagram. For about three years, Sacca also was a “guest shark” on the ABC television show “Shark Tank,” where budding entrepreneurs bid for the favor — and the funding — of millionaire investors. But it didn’t take long before Sacca was feeling unfulfilled by funding kitchen gadget start-ups on “Shark Tank” or electronic-gaming companies back in Silicon Valley. He, like Beebe, turned his attention almost fully toward clean-energy and climate-related investments.

Sacca and Beebe represent one of the hottest corners of the venture capital business in the 2020s: climate tech. Some of the companies that investors like them are backing today will likely become the Googles of tomorrow. Only instead of changing the way we search for stuff on the Internet, climate tech companies will change the way we source and store our energy, grow our food, and move from point A to point B, whether on land, water, or air. In doing so, they’ll not only transform our economy, but help save the planet.

In 2021, investments in climate tech companies hit more $31 billion, according to deal tracking firm PitchBook. That was 30 percent more than in 2020 and more than 2.5 times what it was in 2019. Those big numbers will likely only get bigger as federal, state and international clean climate and clean-energy policies are implemented. Quite simply, government policies and funding help reassure venture capitalists and other private investors to put more of their money at risk.

In 2021, investments in climate tech companies hit more $31 billion, according to deal tracking firm PitchBook.

Climate-tech and clean-tech investing is no longer just about solar or wind or even batteries anymore. Those businesses now attract plenty of mainstream investors. They’re almost like investing in restaurants or real estate — they’re too passe for venture capitalists who are more interested in finding more disruptive technologies that can scale quickly and create big returns.

“What we look at every day are energy innovations that are just insane, some of which are doing things that Einstein declared literally would not be possible,” Sacca said at the VERGE conference. “We see stuff happening in synthetic biology, for instance, that’s just nuts.”

Amid the hellish fires in the West, back-to-back hurricanes in the East and scientists everywhere warning that things were only going to get worse, Sacca in August 2021 stepped away from Lowercase Capital, quit “Shark Tank,” and with wife Crystal turned his attention specifically toward figuring out how to fund and support companies trying to do more to address climate change. The couple launched a new investment fund called Lowercarbon Capital. In a matter of days, they raised more than $800 million that Lowercarbon Capital could deploy to try to “un— the planet,” in Sacca’s terms. The fund was so popular, Sacca wrote on Lowercarbon Capital’s blog, that it had to turn investors away. “It turns out that raising for a climate fund in the context of an unprecedented heatwave and from behind the thick clouds of fire smoke probably didn’t hurt,” he wrote.

Since then, Lowercarbon has invested in companies that capture carbon dioxide and turn it into consumer products, reduce carbon emissions from livestock and fertilizers on the farm, and mine materials that are key to batteries and storage in ways that don’t destroy the environment. One such company is Twelve, a Bay Area start-up that “upcycles” carbon dioxide captured from industrial emissions and turns it into everything from jet fuel to sunglasses lenses, replacing fossil fuels and plastic. Another company Sacca was particularly excited about in 2021 was Lilac Solutions, which has raised $150 million to commercialize its lithium-mining technology. Lilac claims it can produce the essential element for batteries 10,000 times faster than conventional methods, using 90 percent less land and water. Lowercarbon Capital has also made numerous major investments in companies at the intersection of agriculture and climate, including start-up Formo, which is following the Beyond Meat and Impossible Burger model to make fine European cheeses that don’t require dairy or cows; Entocycle, which has figured out how to speed up the gestation period for black soldier fly larvae which happen to be some of the world’s fastest converters of food waste to protein; and Nitricity, which uses solar-powered modules placed around farms to literally make fertilizer out of thin air by converting and processing nitrates found in the atmosphere.

If garbage-eating fly larvae and fine cheeses bioengineered in a sterile laboratory don’t sound like appealing business models, think again. According to research group Climate Tech VC, food-and-water-related climate tech was the biggest sector for climate venture funding in 2021, followed by mobility, consumer goods, and clean energy. Tech investors’ take on food and agriculture is yielding new high-tech twists in one of the world’s oldest and most established economic sectors. Seattle-based clean-agriculture start-up Nori, for instance, got its start in 2017 when its cofounders entered a hackathon contest for coders to figure out new ways to use blockchain technology for social good. Far from the nearest farm, what they came up with was a way to use blockchain technology to monitor and track low-carbon agriculture practices and then monetize that by selling farm-based carbon-removal offsets.

In doing so, Nori is incentivizing farmers to use more climate-friendly agriculture practices that don’t just reduce carbon emissions but actually increase the ability of soil and crops to store carbon, while also creating a new marketplace for carbon removal and trading. In 2020, Nori raised more than $5 million in seed funding to launch its platform. “We call it climate-smart agriculture — thinking of carbon removal like a crop,” Christophe Jospe, a Nori cofounder, told E2.

This excerpt has been updated since publication.

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Walmart Begins Search for Sustainable Packaging

Claudia Baldwin

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“We don’t have time to waste.” With this imperative tagline, American retail giant Walmart launched its Circular Connector this spring.

The goal: to accelerate innovation in the field of sustainable and circular packaging, creating a bridge between companies looking for packaging that has less impact on the environment and those with new solutions to offer.

Searching for sustainable packaging

That the world’s largest retail multinational is launching an online platform to encourage the circular economy of packaging — even while accounting for some form of greenwashing — is undoubtedly great news.

After all, it’s a fact that consumers are becoming increasingly sensitive to the problem of plastic pollution and in general to any aspect related to the sustainability of products. And Walmart, the retail chain of over 10,000 stores around the world, is held accountable by consumers on a daily basis.

Hence the ambitious commitment that the multinational has set for itself by 2025: to achieve that 100 percent of packaging on its shelves would be either recyclable, reusable or industrially compostable. And hence the rush to find solutions to reach the goals.

It’s a fact that consumers are becoming increasingly sensitive to the problem of plastic pollution… And Walmart is held accountable by consumers on a daily basis.

The Circular Connector was therefore created as an online tool to connect packaging designers and manufacturers with companies in various sectors, from food to cosmetics, from fashion to toys. “Basically,” explains a statement on Walmart’s website, “it’s a platform to accelerate packaging innovation and implementation. We want to make it easier for suppliers and brands to find sustainable packaging solutions, thus enabling all of us to move faster toward waste reduction.”

How does the Circular Connector work?

The Circular Connector is accessed from the multinational company’s sustainability policy site, the Walmart Sustainability Hub. To participate, sustainable packaging manufacturers or designers must fill out a special questionnaire with a series of questions about the functions, materials and recyclability of the candidate packaging. Each proposal will then be reviewed according to Walmart’s packaging sustainability goals and, if compatible, will be posted on the site and made available to brands for possible supply contracts.

Reiterating, pragmatically, that they “don’t have time to waste,” the project leaders also made available the company’s Recycling Playbook, based on the two principles of recyclability established by the Ellen MacArthur Foundation. Namely: 1. Is there, in practice, a system for large-scale recycling of this category of packaging that guarantees at least a 30 percent recycling rate for over 400 million people? 2. Do the packaging components fit into that system?

Walmart’s handbook also contains valuable guidance on materials, such as those that are difficult to recycle and therefore tend to be excluded from sorting: metallic films, multi-layer materials, PVC or PVDC, PETG in rigid plastic packaging, oxo-degradable plastics and colored PET.

“We need to work together to promote innovative solutions on a large scale,” states Walmart. “Companies with reusable, refillable, recyclable and other sustainable packaging solutions should therefore come forward. There are hundreds of brands striving to achieve their own packaging sustainability goals, just like Walmart, and the Circular Connector is one tool available to them in this journey.”

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Episode 317: Conversations About Circularity

Claudia Baldwin

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This week’s run time is 1:03:05.

CONSIDERING CIRCULARITY (8:50)

Featuring a recap of interviews and stories from Circularity 22, held this week in Atlanta.

INTERVIEW: Jon Smieja, vice president of circularity and senior analyst for GreenBiz, reflects on hot topics and themes
STORY/AUDIO HIGHLIGHT: Planet vs. plastic: Three steps to solving the global plastics crisis (Featuring Keiran Smith, co-founder and CEO of Mr. Green Africa, on how to encourage decisions made at the local level.)
STORY/AUDIO HIGHLIGHT: John Warner: How to do the materials economy right (Featuring John Warner, senior vice president and research fellow of Zymergen, on how green chemistry could enable the leap to a regenerative, circular economy … if we educated chemists.)
CHITCHAT: Textile recycling tech startup triumphs in Circularity 22’s Accelerate competition
AUDIO HIGHLIGHT: Suzanne Shelton, founder and CEO, Shelton Group (On the importance of shifting context; and what that disturbing baby wrapped in cellophane image teaches us about marketing circularity.)

FEATURE
More sustainable consumer goods (47:30)

Interview with new CEO Christy Slay of The Sustainability Consortium, about priorities, circularity and engaging nimble innovators.

*Music in this episode: Lee Rosevere: “Not My Problem” and “Let That Sink In”; ItsWatR: “Awakening Instrumental”

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