Energy & Technology
Electricity generation accounts for more than one third of total U.S. greenhouse gas (GHG) emissions (Figure 1). Nuclear power is a virtually carbon-free source of reliable, baseload electricity which can play a very large role in decarbonizing the U.S. electric power sector. Existing government incentives have already spurred a renewed interest in building new nuclear plants, and comprehensive climate policy is expected to provide further impetus for a significant expansion of U.S. nuclear power generation (for an in-depth discussion of nuclear power and its role in climate mitigation see the Pew Center’s Nuclear Power factsheet).
Nuclear Power’s Current Role
In 2008, nuclear power provided one fifth of total U.S. electricity and constituted nearly 70 percent of total U.S. non-emitting electricity generation (see Figure 2). With 104 operating nuclear reactors at 65 plants in 31 states, the United States is the world’s largest generator of nuclear power, accounting for about 30 percent of global nuclear generation.1,2 97 percent of current U.S. nuclear generating capacity was built and brought online between 1965 and 1990.3 No new nuclear plants have been ordered in the United States since 1978, and no U.S. plant has been completed that was ordered after 1973.4
Existing Incentives for Nuclear Power and Pending Climate Legislation
The construction of much of the existing nuclear fleet saw significant cost overruns and delays, which makes financing new plants challenging.5,6 Recent changes to the licensing process, standardized plant designs, and improved construction management and quality assurance offer the promise of avoiding the problems of past U.S. nuclear plant construction. The expansion of nuclear power, though, depends on demonstrated success in constructing and operating the first few new nuclear plants.
The Energy Policy Act of 1992 overhauled the nuclear licensing process and moved major regulatory risks to the front end of the process. The Energy Policy Act of 2005 provided financial incentives to promote investment in the first few new plants—most importantly federal loan guarantees.7 In 2007, Congress authorized the Department of Energy (DOE) to grant $18.5 billion of loan guarantees. 17 applications for combined construction and operating licenses for 26 new reactors are under review by the Nuclear Regulatory Commission (NRC)—all submitted since 2007.8
The Waxman-Markey American Clean Energy and Security Act (ACES Act), H.R.2454, includes provisions likely to spur a major expansion of nuclear power. The energy bill passed by the Senate Energy and Natural Resources Committee, the American Clean Energy and Leadership Act (ACEL Act, S.1462) and the energy and climate bill, which includes a GHG cap-and-trade program, introduced by Senators Kerry and Boxer, the Clean Energy Jobs and American Power Act (S.1733), also include provisions related to nuclear power (see Table 1). This brief focuses on the ACES Act because it has been extensively modeled, but any legislation that puts a price on carbon is expected to have a similar effect on nuclear power. Future briefs will discuss the projected impacts of the Senate proposals.
Putting a Price on Carbon
The most important thing that pending climate legislation does for advancing low-carbon energy technologies, especially nuclear power, is to put a price on carbon via a GHG cap-and-trade program.9 A carbon price guides investments toward a variety of low-carbon technologies and makes the cost of electricity from new nuclear power plants lower relative to traditional fossil fuel-based generation.
Financing Low-Carbon Energy Technology
The ACES Act amends the existing DOE nuclear loan guarantee program in order to make the program more effective, including providing the Secretary of Energy with more flexibility in setting the financial terms of the loan guarantees.10 In addition, the ACES Act creates a new Clean Energy Deployment Administration (CEDA), an independent corporation wholly owned by the United States with a 20-year charter, with the mission of promoting domestic development and deployment of clean energy technologies, such as nuclear power, by making available affordable financing. The ACES Act instructs the U.S. Treasury to issue $7.5 billion in “green bonds” to initially capitalize CEDA. The Senate ACEL Act includes similar provisions related to the loan guarantee program and creation of a CEDA.
The Role for Nuclear Power under Market-Based Climate Policy
The U.S. Energy Information Administration (EIA) modeled the effects of the ACES Act and projected that CO2 emission reductions from the electric power sector would comprise more than 80 percent of cumulative GHG emission reductions from sources covered under cap and trade through 2030.11 EIA projects that new nuclear power plants will play a key role in providing these emission reductions. According to EIA, under “business-as-usual,” between 2012 and 2030 only 11 gigawatts (GW) of new nuclear generating capacity would come online (compared to a current nuclear generating capacity of about 100 GW). By contrast, during the same time period under the ACES Act, EIA projects that new nuclear power would make up almost 40 percent of new generating capacity (96 GW) such that by 2030 nuclear power would provide one third of U.S. electricity (see Figure 3).
The United States and the rest of the world cannot avoid dangerous climate change without reducing GHG emissions from electricity generation. Pending cap-and-trade legislation establishes a regulatory framework and long-term price signal to guide investments in low-carbon energy technologies, including nuclear power. In addition, pending legislation builds on existing incentives to overcome the hurdle of financing the first wave of new U.S. nuclear power plants. Under an aggressive global effort to reduce GHG emissions, the International Energy Agency (IEA) projects that nuclear power generation will increase more than three-fold by 2050 with the largest increases in the United States, China, and India.12 The very large deployment of nuclear power projected under climate legislation with a price on carbon could revitalize the U.S. nuclear power industry and position the United States as a leader in a critical low-carbon technology industry.
|Figure 1: Total U.S. Greenhouse Gas Emissions (2007)13|
|Figure 2: U.S. Electricity Generation by Type (2008)14|
|Figure 3: Projected Cumulative New Electric Generating Capacity (2012-2030)|
|Notes: The figure above is based on the EIA ACES Act modeling analysis’s reference and “Basic” policy cases.|
1. Holt, Mark, Advanced Nuclear Power and Fuel Cycle Technologies: Outlook and Policy Options, Congressional Research Service (CRS), Jul 2008. All of the 104 U.S. nuclear reactors were ordered between 1963 and 1973.
2. EIA, International Energy Annual 2006, 2008, see Table 2.7.
3. EIA, U.S. Nuclear Statistics.
4. National Commission on Energy Policy (NCEP), Ending the Energy Stalemate: A Bipartisan Strategy to Meet America’s Energy Challenges, 2004.
5. According to the 2003 Future of Nuclear Power report from the Massachusetts Institute of Technology (MIT), the “historical construction costs reflected a combination of regulatory delays, redesign requirements, construction management and quality control problems” (p. 38).
6. See Table 2-1 and accompanying discussion in Congressional Budget Office (CBO), Nuclear Power’s Role in Generating Electricity, 2008.
7. The Energy Policy Act of 2005 also included a production tax credit (PTC) of $18 per megawatt-hour for 6,000 megawatts (MW) of new nuclear capacity for the first 8 years of operation and a form of insurance (called standby support) under which the federal government will cover debt service for up to six new reactors (subject to funding) if commercial operation is delayed.
8. NEI, Status and Outlook for Nuclear Energy in the United States, May 2009.
9. For explanation of how cap and trade works, see the Pew Center’s Cap and Trade 101.
10.For a detailed discussion of the challenges faced in implementing the DOE loan guarantee program, see the letter “Administrative Changes Necessary for a Workable Title XVII Loan Guarantee Program” sent to the Obama Administration and signed by several clean energy industry associations, including the Nuclear Energy Institute.
11. EIA, Energy Market and Economic Impacts of H.R. 2454, the American Clean Energy and Security Act of 2009, August 2009. Unless otherwise noted, this document refers to EIA’s “Basic” core policy case. EIA’s modeling timeframe only extends to 2030. Abatement refers to the difference between covered emissions under climate policy and under “business-as-usual.”
12. IEA, Energy Technology Perspectives 2008: Scenarios and Strategies to 2050, BLUE Map Scenario, see Figure 8.1.
13. EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2007.
14. U.S. Energy Information Administration (EIA), Annual Energy Review 2008, 2009, see Table 8.2a.
15. The summary of S.1733 is based on the version released September 30, 2009.
- High global warming potential (GWP) gases are mostly man-made gases used in industrial processes. They typically have much longer atmospheric lifetimes and much stronger radiative forcing properties than carbon dioxide.
- Currently, high GWP gases account for 2.1 percent of domestic greenhouse gas (GHG) emissions in terms of carbon dioxide equivalency (CO2e). The EPA has created several voluntary programs aimed at lowering these emissions.
Because of their immense contributions to climate change per molecule emitted, abatement of high GWP gases can be very cost-effective.
This factsheet examines high GWP gases outside of methane and nitrous oxide. High global warming potential gases are gases that have a greater impact on climate change per molecule emitted than carbon dioxide (CO2). GWP is a reporting mechanism developed by the IPCC to standardize the impact of GHGs on climate in units of carbon dioxide equivalency (abbreviated as CO2e). Typically, these potentials are reported over a 100-year time horizon. Carbon dioxide is assigned a 100-year GWP of 1, and this is the standard used to determine the GWPs of other gases (i.e., a gas with a GWP of 50 has an impact on warming 50 times greater than that of CO2 across a 100-year time span).
GHGs can be thought of as having three specific properties: they selectively absorb radiation—meaning they let shortwave radiation (solar radiation) pass through and absorb longwave radiation (infrared radiation) before it can exit the earth’s atmosphere; they have long residency times in the atmosphere; and they are strong absorbers of longwave radiation. GWP is a function of these three properties. Thus, a gas that is a very strong absorber of longwave radiation and remains in the atmosphere for a long time will have a high GWP.
While two high GWP gases—methane (CH4) and nitrous oxide (N2O)—are accounted for in most GHG inventories, many other high GWP gases are not. Some of these GHGs have an extremely high GWP—e.g., sulfur hexafluoride (SF6), which has a GWP 22,800 times that of CO2. Industrial processes are responsible for the majority of high GWP GHG emissions. Many of these high GWP gases do not occur naturally; rather, they are man-made, industrial gases that have been manufactured for certain applications.1
There are three key types of high GWP gases outside of methane and nitrous oxide. These are: sulfur hexafluoride (SF6), other types of perfluorocarbons (PFCs), and hydrofluorocarbons (HFCs). All of these gases contain fluorine, and fluorinated compounds are very potent GHGs because of their long lifetime in the atmosphere and high absorption potential. Over the past two decades, PFC and HFC usage has increased because these gases are good substitutes for chlorofluorocarbons (CFCs), hydrochlorofluorocarbons (HCFCs), and halons—all of which are ozone depleting substances2 (ODSs) being phased out of production under the Montreal Protocol.3 HFCs and PFCs have replaced ODSs in many cases, as they are not ODSs; however, these gases do have high GWPs. Overall, replacement provides net-benefits because HCFCs and CFCs are potent greenhouse gases as well as ODSs. For example, CFC-11 is a common chlorofluorocarbon that depletes the ozone and has a 100-year GWP of approximately 4,750 CO2e. HCFCs and CFCs were excluded from the Kyoto Protocol, however, because the Montreal Protocol had already mandated reductions in these gases. Despite ozone benefits relative to the use of HCFCs, CFCs, and halons, HFCs and PFCs are powerful greenhouse gases. In order to achieve climate protection, it is important to increase the efficiency of their use, abate emissions, or find substitutes that are environmentally benign.4
High GWP gases only account for about 2.1 percent of U.S. greenhouse gas emissions in terms of CO2e (carbon dioxide is the dominant greenhouse gas, accounting for 85 percent of domestic emissions).5 The chart below illustrates domestic sources of high GWP gas emissions and their relative contributions.
|Figure 1: Relative Contributions of Domestic Sources of High GWP Gases|
|Source: 2009 U.S. Greenhouse Gas Inventory Report, EPA. 2009.|
PFCs are very potent GHGs with 100-year GWPs between 7,390 to 17,700 CO2e and atmospheric lifetimes in the range of 740 to 50,000 years. There are a few types of sources of PFC emissions in the United States at present. One source category is aluminum production. Aluminum production is a very electricity-intensive process during which alumina is electrolytically reduced into aluminum in a reaction cell.6 During this process, alumina concentrations may drop below a certain optimal threshold, and this causes a surge in voltage in the cell and switches the reduction reaction to carbon in the anode, called an “anode effect.” During an anode effect, carbon in the anode and fluorine present in the reaction cell are converted to PFCs.7
Solvents are also a source of PFC emissions. Many solvents used for electronics and metals cleaning contain PFCs. These solvents have low boiling points, so they convert easily to gas. Once in gaseous form, they can remain in the atmosphere for thousands of years.8
HFCs have a 100-year GWP range between 124 and 14,800 CO2e and atmospheric lifetimes in the range of 1.4 to 270 years. They are emitted from a wide variety of industrial processes and are the most common of the high GWP gas types. The greatest source of HFCs, and the greatest source of any high GWP gas, is leakage from refrigeration, heat pumps and air conditioning equipment. They may leak from these units during operation, repair, or disposal at the end of a unit’s useful life.9
Like PFCs, HFCs are also used in solvents designed for electronics and metals cleaning. HFCs are emitted when these solvents evaporate.10
The production of HCFC-22, commonly known as R-22, is another source of HFC emissions. HFC-23, a powerful greenhouse gas, is created as a byproduct in the production of R-22, which is currently used for a variety of applications.11
HFCs are also used as blowing agents in the production of certain types of foams. HFCs will escape during the manufacture of the foam, and they will also gradually leak from the foam throughout its life, although a portion of the HFCs will remain trapped indefinitely.12
Many aerosols also contain HFCs. For example, metered dose inhalers used for various medical applications have recently switched from CFC-based propellants to HFC-based propellants. Many other consumer products, like aerosol computer dusting agents and emergency air horns, also contain HFCs.13
HFCs have now replaced halons in fire extinguishers as well. These HFCs are emitted when a fire extinguisher is discharged.14
- Sulfur Hexafluoride
Sulfur hexafluoride (SF6) has a 100-year GWP potential of 22,800 CO2e and an atmospheric lifetime of 3,200 years, making it an extremely potent GHG. It acts as an insulator in electric transmission and distribution equipment. A vast majority of SF6, about 80 percent of all emissions, is emitted when such equipment is damaged or opened during repair or disposal.15
Magnesium production and casting have also become sources of SF6 emissions. SF6 has replaced sulfur dioxide (SO2) in magnesium production as an inhibitor of violent molten magnesium oxidation.16 Its use in this process generates GHG emissions.17
Several high GWP gases—including HFCs, PFCs, and SF6—are used in the manufacture of semiconductors. These gases are largely used for plasma etching and the cleaning of semiconductor production equipment.18
Environmental Benefit/Emission Reduction Potential
As there are many different sources of high GWP gas emissions, there are also many different potential options for emission reduction.
PFC emissions result from sub-optimal concentrations of alumina, in the form of anode effects. Thus, improving control of alumina concentrations could mitigate PFC emissions. At present, computerization of the smelting process or capital additions, such as point feeders,19 provide means to better control alumina concentrations in the production process. There are two gases emitted from anode effects, CF4 and C2F6, with GWPs of 7,390 and 12,200 CO2e, respectively. In 2001, the EPA estimated that these technologies could reduce 2010 emissions by between 17 and 30 percent, depending on the technologies used and the degree to which they are employed.20
Reductions in PFC emissions from solvents can be achieved several ways: through improvements to cleaning equipment and properties; through improvements in the efficiency of solvent usage and recycling; and through improvements in solvent technology and the development of alternative solvents. These GHGs have GWPs upwards of 7,400 CO2e. Reductions will vary by technology used—with greater reductions occurring from displacement of PFC solvents and smaller reductions coming from process improvements. In 2001, the EPA estimated overall emissions reduction potential to be between 31 and 35 percent in the year 2010 depending on the technologies employed.21
Refrigeration, cooling units, and heat pumps are the greatest sources of HFC emissions. Thus, finding ways to improve the handling and operation of such units will decrease fugitive HFC emissions. In many cases, this may be as simple as providing routine maintenance to units and performing leakage tests. In addition, ensuring that refrigeration units are properly disposed of will prevent HFC leakage at landfills. The EPA requires the recovery of refrigerant from retired equipment, but the degree to which this actually occurs is unknown. Design and performance improvements aimed at emission reductions for future units, and upgrades to existing units, can also be implemented. Non-HFC refrigeration systems that do not contribute to climate change, such as ammonia or hydrocarbon-based refrigeration systems, could be deployed at scale, but there are flammability and toxicity issues that must be addressed with many of these systems before they can be fully commercialized. Finally, alternative cooling technologies, like geothermal cooling—where the relatively constant temperature present in subterranean environments can be used as a heat sink—could be employed. These geothermal systems would have to employ HFC-free heat pump systems or water based systems in order to be emissions-free. Overall, these non-or-low-HFC technologies limit emissions from leakage, and they may also limit emissions from electricity production, as some use significantly less energy than conventional refrigeration and cooling systems. As refrigeration and air conditioning are the greatest contributors to high GWP emissions, significant potential for reduction exists. In 2001, the EPA estimated that reductions between 4 and 12 percent could be achieved in 2010.22
HFC-23 emissions from R-22 production will remain problematic in the short-term. However, as part of the Montreal Protocol, R-22 is to be gradually phased out of production and usage in the United States by 2020.23 Until then, measures that improve the efficiency of R-22 production will limit diffuse emissions of HFC-23. Additionally, HFC-23 emissions can be thermally oxidized, thereby decreasing their GWP by converting them to carbon dioxide, hydrogen fluoride, and water. Thermal oxidation has the potential to eliminate over 99 percent of HFC-23 emissions.24
Like PFCs, HFCs are also present in solvents. Reduction options for HFCs in solvents mirror those for PFCs, and the EPA estimated reduction potential is the same, as HFCs are part of these reductions, at about 31 to 35 percent.25
For HFC emissions related to foam and foam blowing, the best mitigation option is substituting other blowing agents that have lower GWPs than HFCs. For example, hydrofluoroolefin (HFO) and hydrocarbon-based blowing agents offer viable alternatives to HFC blowing agents. Concerns about flammability exist with the use of some hydrocarbons. In addition, performance issues and other obstacles may need to be overcome with the use of certain blowing agents, but alternative blowing agents present promising options. In 2001, the EPA estimated that emissions reductions between 35 and 37 would occur.26
CFC use in aerosols has largely been replaced by the use of HFCs. As of December 31, 2008, all metered dose inhalers (MDIs) have switched to a hydrofluoroalkane (HFA) propellant from a CFC based propellant (inhalers were the last consumer product in the United States to use a CFC propellant).27 The GWP of the HFA propellant is nearly six times less than that of the CFC propellant, and almost 30 percent less propellant is required per dose. Tire inflators and air horns are other types of equipment that utilize HFCs. There are several options for mitigation, such as transitioning to dry powder-based inhalers that do not require propellants in the case of MDIs and finding lower GWP alternatives for other types of equipment. Performance and safety issues, particularly issues with flammability, will have to be overcome for certain alternatives, but the EPA estimates that alternative propellants could reduce emissions by up to 20 percent by 2010. When combined with other options, like non-propellant based alternatives and the use of hydrocarbon based propellants, up to 37 percent reductions could occur by 2010.28
For portable and installed fire extinguishers with HFCs, water mist systems and inert gas systems present lower GWP alternatives. In addition, technologies that impede the spread of fires or allow for early detection and quick extinguishment may cut down on emissions because they will allow extinguishing systems to use smaller amounts of chemicals to put out fires. In 2001, the EPA estimated that water mist systems could reduce emissions by 3 percent and inert gas systems could reduce emissions by 25 percent by 2010.29
- Sulfur Hexafluoride
- SF6 emissions from electricity transmission and distribution equipment can be reduced by:
- ensuring that equipment is properly disposed of and that SF6 is recycled whenever possible; the EPA estimates that this could reduce emissions by 10 percent;
- installing new equipment that is easier to service, uses SF6 and has greater structural integrity, which could reduce SF6 emissions by up to 50 percent;
- developing alternative insulating gases, with lower GWP than SF6, as an alternative;
- and installing leak detection systems that will inform operators of leakage, which could reduce emissions by up to 20 percent.30
- SF6 emissions from magnesium production can be reduced by:
- replacing SF6 with lower GWP cover gases;
- improving the efficiency of SF6 usage and implementing measures to reduce leakage;
- installing alternative production and casting systems that limit the need for cover gases.31
- SF6 emissions from electricity transmission and distribution equipment can be reduced by:
Several technologies have been employed that improve the efficiency of and reduce emissions from etching and production operations. Some of these technologies involve capturing emissions and subsequently destroying them through thermal or catalytic processes. Emissions reductions can be anywhere between 50 to 98 percent or greater, depending on the technology used. While there are currently no alternatives to the use of fluorinated GHGs (F-GHGs) in semiconductor manufacture, some processes are amenable to substitution by F-GHGs that have lower GWPs and/or are more efficiently reacted, thus lowering CO2e emissions.32
As there are numerous sources of high GWP emissions, costs of emission reductions vary widely depending on the source of emissions and the available mitigation technologies. Typically, costs will be lower for reductions achieved through efficiency improvements or lower GWP gas substitutes—these options may even generate a net savings. The installation of new capital or additions to existing capital designed to mitigate emissions are generally more costly options across all emission sources because of the large upfront expenditures required for such projects.
Overall, those high GWP gases that are point source emissions—meaning they come from a fixed, identifiable source—present more cost-effective mitigation options than other diffuse emissions sources, like fugitive emissions from electricity transmission lines, because they only require improvements to single sources rather than large-scale improvements to expansive systems. Some reductions in certain high GWP gases could be spill-over effects from other actions taken to reduce GHG emissions. For example, electricity efficiency measures aimed at reducing CO2 emissions could also be responsible for indirect reductions in fugitive SF6 emissions by cutting down on the amount of electricity transmission and distribution equipment needed. These indirect benefits may not be accounted for when estimating the cost of mitigation projects.33
Finally, it is important to note that several economic studies have concluded that the inclusion of high GWP gases—including methane and nitrous oxide— in measures designed to reduce GHG emissions creates greater GHG reductions at lower costs than just targeting CO2 alone. For example, a Pew Center on Global Climate Change report completed in 2003 estimated that meeting Kyoto Protocol targets with a multi-gas mitigation system would be about 30 percent cheaper and would allow for about 5 percent greater reductions than a CO2-only system. Because these gases are far stronger than CO2, emissions reductions per dollar expended tend to be much higher in many cases, making them very cost-effective options relative to CO2.34
Current Status of High GWP Gas Mitigation
As noted before, the Montreal Protocol has called for the phase out of ODSs—which are also potent GHGs. Class I ODSs, of which CFCs are a part, are no longer used or produced in the United States. Class II ODSs, of which HCFCs are part, will be completely phased out by January 1, 2030. As the Montreal Protocol is an international treaty, gradual phase out can be expected on a global level, and this will have a significant impact on reducing high GWP gases not included in the Kyoto Protocol. In fact, a decision to accelerate the phase out of HCFCs made by parties to the Montreal Protocol in 2007 will avoid emissions of approximately 16 gigatons CO2e.37
The EPA has established several voluntary programs aimed at reducing high GWP emissions. It estimates that these voluntary programs will be responsible for reductions of approximately 90 million metric tons CO2e for the year 2010 when compared to business as usual estimates, about a 300 percent reduction.38 These voluntary programs are as follows:
- SF6 Emission Reduction Partnership for Electric Power Systems
- The electric power systems partnership focuses on reducing emissions of SF6 emissions from electric transmission and distribution equipment. Partners agree to keep an inventory of SF6 emissions and implement measures to reduce them. About 45 percent of the industry now participates in the program, and Partners were collectively responsible for 4 million metric tons carbon equivalent (MMTCE) reduction in 2006 alone.39
- The Voluntary Aluminum Partnership (VAIP)
- VAIP was established in 1995 with the goal of reducing PFC emissions from aluminum production through the mitigation of anode effects. It represents 98 percent of U.S. aluminum production capacity. VAIP’s efforts have reduced PFC emissions per ton of aluminum produced by 77 percent from 1990 levels.40
- SF6 Emission Reduction Partnership for the magnesium Industry
- Established in 1999, this partnership between the EPA and the magnesium industry focuses on reducing the SF6 emissions associated with the production and casting of magnesium. It was responsible for emissions reductions of 40 percent per ton of magnesium produced between 1999 and 2002. The program has a goal of eliminating SF6 emissions from this industry entirely by 2010.41
- PFC Reduction/Climate Partnership for the Semiconductor Industry
- Established in 1996, this partnership focuses on reducing a wide variety of high GWP emissions from semiconductor manufacturing through efficiency and capital improvements. The program has a goal of reducing emissions 10 percent below a 1995 baseline, and the EPA estimates that it will mitigate 10 MMTCE in the year 2010 alone.42
The EPA also maintains a regulatory program called the Significant New Alternatives Policy Program. Under this program, the EPA may evaluate and control substitutes to ODSs so as to ensure that they are more environmentally benign than the substances they seek to replace.
Obstacles to Further Development or Deployment of High GWP Emissions Controls
High GWP gas mitigation has increasing marginal costs, meaning that smaller emissions reductions achieved by substituting gases or implementing marginal efficiency improvements may be cheap, but large reductions—which require new capital or alternative processes—will have much higher costs in the form of R&D or expenditures on new equipment. Thus, attaining high levels of reductions may be very costly, and some technologies still remain prohibitively expensive.
Many high GWP emissions come from diffuse sources, such as electricity transmission equipment, that are more difficult to monitor and control. Mitigation options for diffuse emission will be systemic in scope. In most cases, this will make their implementation longer and more difficult than mitigation measures for point sources.
Policy Options to Help Promote High GWP Emissions Reductions
- Price on greenhouse gases
A price on greenhouse gases, as would exist, for example, under a greenhouse gas cap-and-trade program, would incentivize high GWP emissions reductions so long as they were included in the cap. If they were not included in the cap, inclusion in an offsets program— where high GWP gas-emitting firms could still earn emission reduction credits that they could sell to covered firms—would incentivize reductions.
Mandates or incentives
The Montreal Protocol has contributed to significant emissions reductions in ODSs, which are also high GWP gases. A similar mandate targeting industrial high GWP gases, or a program that incentivizes or subsidizes their reduction, could effectively reduce emissions. However, this approach is limited by the availability of technically acceptable and cost-effective alternatives.
Related Business Environmental Leadership Council (BELC) Company Activities
Related C2ES Resources
Further Reading/Additional Resources
U.S. Environmental Protection Agency (EPA)
1 Reilly, John M., Jacoby, Henry D. and Prinn, Ronald G. Multi-gas contributors to global climate change 2003. Arlington, VA : Pew Center on Global Climate Change, 2003.
2 ODSs are chemicals that deplete the stratospheric ozone layer in the earth’s atmosphere. The ozone layer absorbs ultraviolet radiation; its depletion allows more ultraviolet radiation to reach earth’s surface, and this has negative impacts on public health and agricultural productivity. The Montreal Protocol, an international treaty that called for a reduction in the use of ODSs, was ratified in 1987. Since then, the United States and many other nations have sought to phase out the usage of ODSs.
3 Phasing Out Ozone Depleting Substances and Safeguarding the Global Climate. UNDP-Environment and Energy. [Online] United Nations . [Cited: July 15, 2009.]
4 Final Report on U.S. High Global Warming Potential (High GWP) Emissions 1990-2010: Inventories, Projections, and Opportunities for Reductions. EPA High Global Warming Potential Gases. [Online] June 2001. [Cited: July 18, 2009.]
5 2009 U.S. Greenhouse Gas Inventory Report. Climate Change - Greenhouse Gas Emissions. [Online] EPA, 2009. [Cited: July 15, 2009.]
6 Production. International Aluminum Institute. [Online] International Aluminum Institute, 2009. [Cited: July 17, 2009.]
7 Cost and Emission Reduction Analysis of PFC Emissions from Aluminum Smelters in the United States . Final Report on U.S. High Global Warming Potential (High GWP) Emissions 1990-2010: Inventories, Projections, and Opportunities for Reductions. [Online] EPA, June 2001. [Cited: July 17, 2009.]
8 Cost and Emission Reduction Analysis of HFC and PFC/PFPEs Emissions from Solvents in the United States. Final Report on U.S. High Global Warming Potential (High GWP) Emissions 1990-2010: Inventories, Projections, and Opportunities for Reductions. [Online] EPA, June 2001. [Cited: July 17, 2009.]
9 Cost and Emission Reduction Analysis of HFC Emissions from Refrigeration and Air Conditioning in the United States. Final Report on U.S. High Global Warming Potential (High GWP) Emissions 1990-2010: Inventories, Projections, and Opportunities for Reductions. [Online] EPA, June 2001. [Cited: July 17, 2009.]
10 Cost and Emission Reduction Analysis of PFC Emissions from Aluminum Smelters in the United States, 2001.
11 Cost and Emission Reduction Analysis of HCFC-22 Production in the United States, 2001.
12 Cost and Emission Reduction Analysis of HFC Emissions from Foams in the United States, 2001.
13 Cost and Emission Reduction Analysis of HFC Emissions from Aerosols in the United States. Final Report on U.S. High Global Warming Potential (High GWP) Emissions 1990-2010: Inventories, Projections, and Opportunities for Reductions. [Online] EPA, June 2001. [Cited: July 17, 2009.]
14 Cost and Emission Reduction Analysis of HFC and PFC Emissions from Fire Extinguishing in the United States. Final Report on U.S. High Global Warming Potential (High GWP) Emissions 1990-2010: Inventories, Projections, and Opportunities for Reductions. [Online] EPA, June 2001. [Cited: July 17, 2009.]
15 Cost and Emission Reduction Analysis of SF6 Emissions from Electric Utilities in the United States. Final Report on U.S. High Global Warming Potential (High GWP) Emissions 1990-2010: Inventories, Projections, and Opportunities for Reductions. [Online] EPA, June 2001. [Cited: July 17, 2009.]
16 Magnesium is a highly flammable metal that reacts violently with oxidizing or extinguishing agents. This may result in excessive oxidation which is dangerous and results in losses of the metal during production. SF6 is used as a cover gas, a gas that helps stabilize the magnesium production process by inhibiting ignition violent oxidation.
17 Cost and Emission Reduction Analysis of SF6 Emissions from Magnesium Production and Parts Casting in the United States. Final Report on U.S. High Global Warming Potential (High GWP) Emissions 1990-2010: Inventories, Projections, and Opportunities for Reductions. [Online] EPA, June 2001. [Cited: July 17, 2009.]
18 Cost and Emission Reduction Analysis of PFC, HFC, and SF6 Emissions from Semiconductor Manufacturing in the United States. Final Report on U.S. High Global Warming Potential (High GWP) Emissions 1990-2010: Inventories, Projections, and Opportunities for Reductions. [Online] EPA, June 2001. [Cited: July 17, 2009.]
19 Point feeders are alumina distribution devices that allow for greater control and precision in the administration of alumina in the reaction cell. By incrementally adding alumina into the reaction cell, they help maintain optimal reaction conditions and cut down on anode effects.
20 Cost and Emission Reduction Analysis of PFC Emissions from Aluminum Smelters in the United States, 2001.
21 Cost and Emission Reduction Analysis of HFC and PFC/PFPEs Emissions from Solvents in the United States, 2001.
22 Cost and Emission Reduction Analysis of HFC Emissions from Refrigeration and Air Conditioning in the United States, 2001.
23 Phaseout of HCFC-22 and HCFC-142b in the United States. Ozone Layer Depletion - Regulatory Programs. [Online] EPA, 2009.
24 Cost and Emission Reduction Analysis of HCFC-22 Production in the United States, 2001.
25 Cost and Emission Reduction Analysis of HFC and PFC/PFPEs Emissions from Solvents in the United States, 2001.
26 Cost and Emission Reduction Analysis of HFC Emissions from Foams in the United States, 2001.
27 CFC-Free Inhalers: Time to Make the Switch. American Lung Association. [Online] American Lung Association. [Cited: July 15, 2009.]
28 Dalby, Richard. Introduction to Pharmaceutical Aerosols. University of Maryland. [Online] [Cited: July 15, 2009.]
29 Cost and Emission Reduction Analysis of HFC and PFC Emissions from Fire Extinguishing in the United States, 2001.
30 Cost and Emission Reduction Analysis of SF6 Emissions from Electric Utilities in the United States, 2001.
31 Cost and Emission Reduction Analysis of SF6 Emissions from Magnesium Production and Parts Casting in the United States, 2001.
32 Cost and Emission Reduction Analysis of PFC, HFC, and SF6 Emissions from Semiconductor Manufacturing in the United States. Final Report on U.S. High Global Warming Potential (High GWP) Emissions 1990-2010: Inventories, Projections, and Opportunities for Reductions. [Online] EPA, June 2001. [Cited: July 17, 2009.]
33 Final Report on U.S. High Global Warming Potential (High GWP) Emissions 1990-2010: Inventories, Projections, and Opportunities for Reductions, 2001.
34 Reilly, 2003.
35 Phase Out of Class I Ozone Depleting Substances. Ozone Layer Depletion-Regulatory Programs. [Online] EPA, June 2001. [Cited: July 17, 2009.]
36 Phaseout of HCFC-22 and HCFC-142b in the United States. Ozone Layer Depletion - Regulatory Programs. [Online] EPA, June 2001. [Cited: July 17, 2009.]
37 Phasing Out Ozone Depleting Substances and Safeguarding the Global Climate, 2009.
38 High Global Warming Potential Gases. EPA. [Online] EPA, October 2006. [Cited: July 16, 2009.]
39 SF6 Emission Reduction Partnership for Electric Power Systems. EPA . [Online] EPA, February 2009. [Cited: July 15, 2009.]
40 Voluntary Aluminum Industrial Partnership (VAIP). [Online] EPA, March 2008. [Cited: July 15, 2009.]
41 SF6 Emission Reduction Partnership for the Magnesium Industry. SF6 Emission Reduction Partnership for the Magnesium Industry. [Online] EPA, March 2008. [Cited: July 15, 2009.]
42 PFC Reduction/Climate Partnership for the Semiconductor Industry. PFC Reduction/Climate Partnership for the Semiconductor Industry . [Online] EPA, March 2008. [Cited: July 15, 2009.]
Welcome to our new blog. This blog presents ideas and insights from the Center and its experts on topics critical to the climate conversation. These topics include domestic and international policy, climate science, low-carbon technology, economics, corporate strategies to address climate change, and communicating these issues to policymakers and the public. Our bloggers include policy analysts, scientists, economists, and communication specialists – all of whom are working to advance solutions to our climate and energy challenge.
Thank you for visiting our blog, and check back often for more timely posts.
Tom Steinfeldt is Communications Manager
Press Release- June 23, 2009
Contact: Tom Steinfeldt, (703) 516-4146
REPORT EXAMINES POTENTIAL OF WIND AND SOLAR ELECTRICITY
New Policies Needed to Spur Significant Growth in Wind, Solar in U.S.
WASHINGTON, D.C. – Wind and solar power could become a major source of electricity for the United States, but only if the nation adopts new policies that promote renewable energy and that place a price on carbon, according to a new report from the Pew Center on Global Climate Change.
The report, “Wind and Solar Electricity: Challenges and Opportunities,” cites figures showing that renewable energy sources currently provide only a small fraction of U.S. electricity (8 percent of the total including conventional hydro power, and only 2 percent excluding hydro). A business-as-usual forecast suggests that renewables will supply 14 percent of U.S. electricity by 2030, with non-hydro renewables providing only 6 percent.
However, Congress currently is considering policies that could lead to a significantly larger role for renewables in meeting the United States’ energy needs. Such policies include a cap-and-trade program for greenhouse gases and a national renewable portfolio standard (RPS) that requires increased production of energy from renewable sources. The Pew Center report, which includes a detailed analysis of the costs of wind and solar vs. other power sources, suggests that such policies could provide a critical boost in overcoming barriers to the more rapid development and deployment of renewables.
“Wind and solar power are two of our most promising renewable energy technologies, but without a price on carbon – they will face significant barriers to widespread market penetration,” said Eileen Claussen, President of the Pew Center on Global Climate Change. “Acting now to regulate carbon through a cap-and-trade system and changing the way we plan and manage our electricity grid can help to make these cleaner energy sources a more significant part of the climate solution.”
“Wind and Solar Electricity: Challenges and Opportunities” examines three primary obstacles to deployment of wind and solar power: cost, variability of generation, and lack of transmission. The paper, authored by Dr. Paul Komor of the University of Colorado at Boulder, explains these challenges, explores policy options for addressing them, and describes the implications of future scenarios that entail significantly higher levels of electricity generation from wind and solar power.
Key sections of the paper include:
- An overview of wind, solar photovoltaic, and solar concentrating power technologies;
- An explanation of the key challenges to deploying wind and solar power—namely, higher cost, variability of generation, and inadequate transmission;
- Policy options for making wind and solar cost-competitive, overcoming transmission constraints, and managing variability; and
- An evaluation of the implications of “high wind” and “high wind and solar” scenarios for future U.S. electricity production.
For more information about global climate change and the activities of the Pew Center, visit www.c2es.org.
The Pew Center was established in May 1998 as a non-profit, non-partisan, and independent organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.
Wind and Solar Electricity: Challenges and Opportunities
BY: Dr. Paul Komor
Wind and solar power could become a major source of electricity for the United States, but only if the nation adopts new policies that promote renewable energy and that place a price on carbon. The report cites figures showing that renewable energy sources currently provide only a small fraction of U.S. electricity (8 percent of the total including conventional hydro power, and only 2 percent excluding hydro). A business-as-usual forecast suggests that renewables will supply 14 percent of U.S. electricity by 2030, with non-hydro renewables providing only 6 percent.
Wind and Solar Electricity: Challenges and Opportunities examines three primary obstacles to deployment of wind and solar power: cost, variability of generation, and lack of transmission. The paper, authored by Dr. Paul Komor of the University of Colorado at Boulder, explains these challenges, explores policy options for addressing them, and describes the implications of future scenarios that entail significantly higher levels of electricity generation from wind and solar power.
Buildings and Emissions: Making the Connection
Residential and commercial buildings account for almost 39 percent of total U.S. energy consumption and 38 percent of U.S. carbon dioxide (CO2) emissions.1 Nearly all of the greenhouse gas (GHG) emissions from the residential and commercial sectors can be attributed to energy use in buildings (see Climate TechBook: Residential and Commercial Sectors Overview).
|Figure 1: Buildings Share of U.S. Primary Energy Consumption (2006)|
|Source: U.S. Department of Energy (DOE), 2008 Buildings Energy Data Book, Section 1.1.1, 2008.|
GHG emissions from energy use in buildings can be broken down into two types: first, direct emissions from the on-site combustion of fuels for heating and cooking and, second, emissions from the end use of electricity used to heat, cool, and provide power to buildings. Emission reductions from buildings can be achieved by reducing emissions from the energy supply (see Climate TechBook: Electricity Sector Overview, as well as the individual Climate TechBook briefs on low- and zero-emission energy supply technologies) or by reducing energy consumption through improved building design, increased energy efficiency and conservation, and other mechanisms that reduce energy demand in buildings (see Climate TechBook: Building Envelope).
Factors Affecting Building-Related Emissions
Buildings come in a wide variety of shapes, sizes, and purposes, and they have been built at different times according to different standards. Consequently, addressing energy use in any given building requires a holistic approach to ensure the best results. In considering buildings generally, the following elements play important roles in shaping energy consumption and use. Whole-building design standards include most or all of these categories in order to maximize energy savings, but frequently any adjustments in these areas can be beneficial.
- Embodied energy
Embodied energy refers to the energy required to extract, manufacture, transport, install, and dispose of building materials. The GHG emissions associated with the embodied energy of a building are not attributed to “buildings” in above values, but efforts to reduce this energy use and associated emissions, for example through the substitution of bio-based products, can be made as part of a larger effort to reduce emissions from buildings.
- Building design
Overall building design can help determine the amount of lighting, heating, and cooling a building will require. Architects and engineers have developed innovative new ways to improve overall building design in order to maximize light and heat efficiency.2 Another important determinant of energy consumption is size because larger buildings generally require more energy for heating, cooling, and lighting. The United States has seen a general trend of increased building size among residential buildings.
- Building envelope
The building envelope is the interface between the interior of a building and the outdoor environment. Minimizing heat transfer through the building envelope is crucial for reducing the need for space heating or cooling. Insulation, air sealing, and windows can each play an important role in minimizing heat transfer. For more information, see Climate TechBook: Building Envelope.
- On-site or distributed generation
The terms “on-site generation” or “distributed generation” refer to energy that is produced at the point of use and encompass many different options from both renewable and fossil fuel sources, as well as small energy storage systems. Many buildings can integrate distributed generation as either an alternative or supplement to grid-supplied electricity.
- Energy end uses in buildings
Utilizing efficient technologies can reduce GHG emissions by moderating energy use. In both residential and commercial buildings, energy consumption is dominated by space heating, cooling, and air conditioning (HVAC) and lighting (see Figure 2 and Figure 3). In addition to reducing energy use and associated GHG emissions, energy efficiency improvements also yield a variety of co-benefits, including lower monthly utility bills and greater energy security.3
|Figure 2: Residential Buildings Total Energy End Use (2006)|
Source: DOE, 2008 Buildings Energy Data Book, Section 2.1.5, 2008.
|Figure 3: Commercial Sector Buildings Energy End Use (2006)|
|Source: DOE, 2008 Buildings Energy Data Book, Section 3.1.4, 2008.|
Note: This pie chart uses an adjustment factor (*) used by the EIA to reconcile two datasets.
Space heating, cooling, and air conditioning (HVAC)
Opportunities for minimizing HVAC-related energy losses include making use of natural ventilation and natural sources of heat, minimizing unwanted heat and humidity gains from lights and appliances, minimizing energy losses in conventional systems by upgrading equipment or downsizing the scale of the equipment, and integrating new efficient technologies such as evaporative coolers and ductless systems. Adjustments to HVAC systems can occur and be most effective with modifications in other building elements. For example, increasing window performance and the insulating properties of the building envelope will reduce the demands upon the HVAC system and will allow HVAC equipment to be downsized, enabling efficiency improvements and cost savings.
Energy use for lighting can be reduced in two ways: reducing the amount of artificial light required and using more efficient technology. Reducing light use can be achieved by behavioral changes—individual commitments to only keeping on the lights that are in use—or by using motion sensors, occupancy sensors, time sensors, and photosensors to automatically ensure that lights are only on when they are in use. Options for using more efficient technology include changing light bulbs and lighting fixtures from incandescent bulbs to fluorescents or solid-state lighting options.
Emission Reduction Potential of Climate-Friendly Buildings
Reductions in building-related GHG emissions can be achieved in many different ways: by increasing the amount of electricity generated from low- and zero-carbon technologies, by retrofitting existing buildings to reduce energy consumption and improve energy efficiency, and by constructing new buildings to be low- or zero-energy buildings. Many factors influence the level of emission reductions achieved. Significant improvements in energy efficiency are attainable and can reduce building-related emissions to very low levels or, when coupled with renewable energy sources, to zero.
Zero-energy buildings (ZEBs) are buildings designed to have markedly reduced energy needs achieved through design and efficiency measures; the remaining energy needs required by these buildings can be achieved through renewable technologies. ZEBs can be net energy producers through the use of on-site renewables. The Energy Independence and Security Act of 2007 (EISA 2007) directed the U.S. Department of Energy to form the Net-Zero Energy Commercial Building Initiative, a public-private collaboration, in order to “develop and disseminate technologies, practices, and policies” to promote and facilitate the transition to zero net energy commercial buildings. EISA 2007 calls for all new commercial buildings to be zero net energy consumers by 2030 and all U.S. commercial buildings to be zero net energy consumers by 2050.4 A recent analysis showed that by using existing technologies and practices, 22 percent of commercial buildings could be ZEBs by 2025; this number increases to 64 percent if technology improvements are included.5
A variety of other public and private efforts to reduce energy consumption and GHG emissions from commercial and residential buildings have emerged in recent years, including the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system, Architecture 2030’s 2030 Challenge, and the American Society of Heating, Refrigerating, and Air-Conditioning Engineers’ (AHSRAE) goal to improve commercial building codes by 30 percent by 2010.6
Obstacles to Climate-Friendly Buildings
Building-related GHGs can be reduced in many ways, and these different pathways to lower emissions can also face a number of challenges. In broad terms, these obstacles include:
- Cost concerns
Estimates vary as to the financial cost and emissions-reducing potential for green building and energy efficient building practices, particularly because of the range of ideas and products and the degree to which specific technologies and designs are utilized. In many cases, the integration of efficient practices can reduce energy use in multiple elements of the building; for example, insulation and solar heating can reduce HVAC equipment costs and electricity costs, and strategic design can reduce the need for artificial lighting as well as improve air circulation.
New efficient buildings are estimated to have costs equal to or only slightly more than those for conventional buildings. For new buildings, it is estimated that the additional cost of state-of-the art, energy-efficient technology is less than 2 percent of the total building cost.7 For example, a 2006 study comparing the cost of LEED-certified buildings compared with the cost of non-certified buildings8 found that LEED-certification is not a strong indicator of cost. Academic buildings with and without LEED certification can incur a wide range of costs on a square footage basis (see Figure 4).
Regardless of initial cost, efficient buildings can yield savings over the lifetime of the building through:
|Figure 4: Cost per Square Foot of Academic Buildings,|
Including LEED- and Non-certified Buildings
|Source: Langdon, D., The Cost of Green Revisited: Reexamining the Feasibility and Cost Impact of Sustainable Design in the Light of Increased Market Adoption, 2007.|
- Market barriers
A variety of market barriers exist, including the “split incentive” barrier wherein there exists a disconnect between those that manage the building and those who must pay the utility bills. Thirty-two percent of households and 40 percent of commercial buildings are rented or leased; in these cases, tenants do not have much control over retrofits or building improvements, and landlords may not reap the benefits of more efficient technology.11
In addition, the prevailing fee structures for building design engineers cause first costs to be emphasized over life-cycle costs. Projects are often awarded in the first place to the team that designs the building that costs the least to construct; their fees are typically reduced if actual construction costs exceed the estimated costs.12 This practice tends to hinder energy efficiency because initial capital costs are typically higher for the installation of superior heating, ventilation, and air-conditioning systems that reduce subsequent operating costs.
- Public policy and planning barriers
Policies and planning efforts that affect buildings are often implemented at the state or local level. Policies can be designed to encourage more climate-friendly buildings, but a variety of policies also exist that discourage making buildings more climate-friendly. For example, many utilities have incentives to generate and sell more electricity and little or no incentive to encourage energy efficiency, even if the energy efficiency options have lower costs.
- Customer barriers
Lack of information about energy-saving opportunities and incentives, such as rebates and low-interest loans, can result in consumer underinvestment. In addition, lack of access to energy-efficient technologies (e.g., because a particular technology is not stocked in local stores) can limit the use of some technologies. Understanding these barriers may improve the feasibility of efficient construction and planning. With increasing availability of efficient technology and the growing popularity of green building techniques, it is becoming more and more important to address these barriers to the implementation of efficient and effective building technology.
Policy Options to Promote Climate-Friendly Buildings
The mosaic of current policies affecting the building sector is complex and dynamic involving voluntary and mandatory programs implemented at all levels of government, from local to federal. Government efforts to reduce the overall environmental impact of buildings have resulted in numerous innovative policies at the state and local levels. Non-governmental organizations, utilities, and other private actors also play a role in shaping GHG emissions from buildings through third-party “green building” certification, energy efficiency programs, and other efforts.
Various taxonomies have been used to describe the policy instruments that govern buildings, typically distinguishing between regulations, financial incentives, information and education, management of government energy use, and subsidies for research and development (R&D). Each of these is broadly described below.
- Standards and codes
Regulatory policies include building and zoning codes, appliance energy efficiency standards, clean energy portfolio standards, and electricity interconnection standards for distributed generation equipment. Building codes can require a minimum level of energy efficiency for new buildings, thus mandating reductions at the construction stage, where there is the most opportunity to integrate efficiency measures. Zoning codes can provide incentives to developers to achieve higher performance. Because of regional differences in such factors as climatic conditions and building practices, and because building and zoning codes are implemented by states and localities, the codes vary considerably across the country. While substantial progress has been made over the past decade, opportunities to strengthen code requirements and compliance remain.
Appliance and equipment standards require minimum efficiencies to be met by all regulated products sold; they thereby eliminate the least efficient products from the market. Federal standards exist for many residential and commercial appliances, and several states have implemented standards for appliances not covered by federal standards (see Appliance Efficiency Standards).
- Financial incentives
Financial incentives can best induce energy-efficient behavior where relatively few barriers limit information and decision-making opportunities (e.g., in owner-occupied buildings). Financial incentives include tax credits, rebates, low-interest loans, energy-efficient mortgages, and innovative financing, all of which address the barrier of first costs. Many utilities also offer individual incentive programs, because reducing demand, especially peak demand, can enhance the utility’s system-wide performance.
- Information and education
While many businesses and homeowners express interest in making energy-efficiency improvements for their own buildings and homes, they often do not know which products or services to ask for, who supplies them in their areas, or whether the energy savings realized will live up to claims. Requiring providers to furnish good information to consumers on the performance of appliances, equipment and even entire buildings is a powerful tool for promoting energy efficiency by enabling intelligent consumer choices.
- Lead-by-example programs
A variety of mechanisms are available to ensure that government agencies lead by example in the effort to build and manage more energy-efficient buildings and reduce GHG emissions. For example, several cities and states, and federal agencies (including the General Services Administration), have mandated LEED or LEED-equivalent certification for public buildings, and the Energy Independence and Security Act of 2007 includes provisions for reduced energy use and energy efficiency improvements in federal buildings.
- Research and development (R&D)
In the long run, the opportunities for a low-greenhouse gas energy future depend critically on new and emerging technologies. Some technological improvements are incremental and have a high probability of commercial introduction over the next decade (such as low-cost compact fluorescents). Other technology advances will require considerable R&D before they can become commercially feasible (such as solid-state lighting). The fragmented and highly competitive market structure of the building sector and the small size of most building companies discourage private R&D, on both individual components and the interactive performance of components in whole buildings.
- Building Technologies Center. The Oak Ridge National Laboratory’s Buildings Technology Center was established by the U.S. Department of Energy (DOE) and performs research into issues including heating and cooling equipment, thermal engineering, weatherization, building design and performance, envelope systems and materials, and power systems.
- Emerging Technologies. This U.S. DOE-sponsored program develops technology that would reduce energy use in residential and commercial buildings by 60-70 percent. Technologies are in fields including solid-state lighting, space conditioning and refrigeration, building envelopes, and analysis tools and design strategies that would facilitate the development of energy efficient buildings through software and computer-based building analysis.
Related C2ES Resources
Further Reading / Additional Resources
ENERGY STAR®, Federal Tax Credits for Energy Efficiency, updated 24 April 2009
Home Energy Checklist: Reduce Your Energy Costs, Energy & Environment Building Association, accesed 11 May 2009
National Association of Home Builders (NAHB), NAHB Model Green Home Buildings Guidelines, 2006
The Potential Impact of Zero-Energy Homes, prepared for the National Renewable Energy Laboratory by the NAHB Research Center, Inc., 2006
U.S. Department of Energy (DOE), Office of Energy Efficiency and Renewable Energy
- 2008 Buildings Energy Data Book, 2008
- Building America Best Practices Series and Case Studies
- Building Technologies Program
1 U.S. Department of Energy (DOE), 2008 Buildings Energy Data Book. Prepared for the DOE Office of Energy Efficiency and Renewable Energy by D&R International, 2008.
2 The DOE has developed the Building America Best Practice Series that includes five climate-specific sets of building best practices that focus on reducing energy use and improving housing durability and comfort.
3 U.S. Environmental Protection Agency (EPA) and U.S. Department of Energy (DOE), National Action Plan for Energy Efficiency. Washington, DC: EPA, 2006.
4 DOE, Net-Zero Energy Commercial Building Initiative. Updated 27 February 2009.
5 Griffith, B., P. Torcellini, and N. Long. Assessment of the Technical Potential for Achieving Zero-Energy Commercial Buildings. NREL/CP-550-39830, 2006.
6 See Related Efforts for a list and links to other programs that support the transition to zero net energy buildings.
7 For more information, see page 33 of Towards a Climate-Friendly Built Environment. Prepared for the Pew Center on Global Climate Change by M. Brown, F. Southworth, and T. Stovall, 2005.
8 The lack of certification in this study is because of building design; “not certified” buildings would qualify for some LEED points but not enough to achieve certification (see p.10). The data in this study does not contain green buildings that chose not to obtain official certification because of, for example, cost considerations. For more information, see Langdon, D., The Cost of Green Revisited: Reexamining the Feasibility and Cost Impact of Sustainable Design in the Light of Increased Market Adoption, 2007.
9 DOE, Office of Energy Efficiency and Renewable Energy, "Whole Building Design for Commercial Buildings." Net-Zero Energy Commercial Buildings Initiative. Updated 27 February 2009.
10 In a recent study, “green” commercial buildings were shown to have consistently higher market values than comparable “non-green” buildings. See Piet Eichholtz, Nils Kok, and John M. Quigley, "Doing Well by Doing Good? Green Office Buildings.” Berkeley Program on Housing and Urban Policy. Working Papers: Paper W08-001, April 2008.
11 Brown, M., F. Southworth, and T. Stovall, Towards a Climate-Friendly Built Environment. Prepared for the Pew Center on Global Climate Change, 2005. p17.
12 Brown, M., et al. 2005;
Jones, D.B., D.J. Bjornstad, and L.A. Greer. Energy Efficiency, Building Productivity, and the Commercial Buildings Market. ORNL/TM-2002/107. Oak Ridge, TN: Oak Ridge National Laboratory, 2002.
- In 2008, 9.2 billion gallons of ethanol were consumed in the United States.
- As of 2007, a total of 110 corn ethanol plants were operating in 21 states.
- The Energy Independence and Security Act (EISA) of 2007 updated the federal Renewable Fuel Standard that requires the use of annually increasing amounts of corn ethanol. The updated mandate requires 11.1 billion gallons of corn ethanol in 2009 and increases yearly to 15 billion gallons in 2015. The mandate also requires that ethanol facilities, built after passage of the Act, must achieve at least a 20 percent reduction in lifecycle greenhouse gas emissions per gallon of ethanol relative to gasoline.
Ethanol is made by fermenting sugars or starch into alcohol and can be used as a liquid fuel in motor vehicles. Most of the ethanol sold in the United States is blended with gasoline. Gasoline with up to 10 percent ethanol (E10) can be used in most vehicles without modification. Special flexible fuel vehicles can use a gasoline-ethanol blend that has up to 85 percent ethanol (E85).
Ethanol can be produced from a variety of feedstocks, including cereal crops, corn, sugarcane, sugar beets, potatoes, sorghum, and cassava. Currently, only simple sugars or starches can be converted into ethanol on a commercial-basis; corn and sugarcane are the two main feedstocks. Researchers are examining other potential feedstocks for ethanol production, such as cellulosic biomass and other plant materials.
- Corn ethanol
Corn-to-ethanol is currently the main commercial biomass-to-fuel pathway in the United States. To produce ethanol, starchy crops, like corn, first have to be converted to simple sugars before fermentation. This can be done through either wet or dry milling; currently, about 75 percent of corn ethanol in the United States is produced through dry milling and 25 percent through wet.
- In the dry milling process:
The corn kernel is first ground into a fine powder and mixed with water and enzymes to break the starch into sugar (glucose). The resulting mixture is heated to kill bacteria, cooled, and processed with other enzymes that break the glucose to dextrose. Yeast is then added to ferment the dextrose into ethanol and carbon dioxide (CO2).
The resulting ethanol has a high concentration of water, which must be separated from the ethanol via distillation. This distillation requires a large amount of energy, usually in the form of natural gas, to power the process. Dry milling results in a single co-product – distiller’s dried grain with solubles (DDGS) – composed of protein and other nutrients and used as an animal feed.
- In the wet milling process:
The corn kernel is first soaked in a chemical solution and then separated into solid and liquid components. The starch is then is hydrolyzed, fermented, and distilled as in dry-milling.
Wet milling requires more equipment to process the corn than dry milling, but it is more suitable for larger refineries and results in more co-products that can be sold to other sectors.
- In the dry milling process:
- Sugarcane ethanol
In Brazil, the primary feedstock for producing ethanol is sugarcane, with crop wastes (called bagasse) used for the conversion process energy. Sugarcane is about one-third simple sugar (sucrose) and two-thirds bagasse. To process the sugarcane, the sugar is pressed out of the cane and then fermented, a process similar to corn ethanol production. Bagasse provides energy for the processing and distillation, eliminating the use of fossil fuels from the manufacturing process.
- Other feedstocks
Other feedstocks for ethanol production are emerging. Cellulosic feedstocks, such as perennial grasses (e.g., switchgrass and Miscanthus) or short rotation woody crops, can potentially be converted to ethanol.
Environmental Benefit/Emission Reduction Potential
The greenhouse gas (GHG) reduction potential can vary significantly based on how the feedstock is produced and how it is processed (e.g., what type of energy is used in the conversion process).
- On average, U.S. corn ethanol facilities, where natural gas is most commonly used for conversion energy, reduce life-cycle GHG emissions by about 20 percent per gallon of ethanol. With a coal-fired process, life-cycle GHG emissions for ethanol are 3 percent higher, relative to gasoline. If biomass power and carbon capture and disposal are used instead, ethanol can reduce emissions by more than 50 percent compared to gasoline.1 These estimates only include the direct lifecycle emissions, and do not take into account indirect land use impacts.
- Brazilian sugarcane-based ethanol, which uses plant wastes for the conversion energy, reduces GHG emissions by 60 to 80 percent relative to petroleum, when considering direct lifecycle emissions.2
- Studies that have attempted to take into account the effects of ethanol production on land use generally have been more pessimistic about emission reductions and have calculated that GHG benefits of ethanol decrease significantly when the indirect land use impacts are considered.3
Table 1. Life-cycle GHG Intensity for Ethanol, based on the California GREET Model4
(These estimates do not include the impact of indirect land use change on GHG emissions.)
|Fuel||Technology Used||CA GREET GHG|
|Corn Ethanol, U.S. Average||85% Dry Mill and 15% Wet Mill||68.6|
|Corn Ethanol, produced in Midwest||Dry Mill, Natural gas for power||67.6|
|Corn Ethanol, produced in Midwest||Wet Mill, 60% Natural gas and 40% Coal||74.3|
|Corn Ethanol, produced in California||Dry Mill, Natural gas for power||58.1|
|California Gasoline (including 10% ethanol)||95.9|
As with all biofuels, the costs of ethanol production depend greatly on the cost of the feedstock.
- For U.S. corn ethanol:
In 2002, feedstock cost was about 57 percent of production cost for ethanol (EIA).
When corn is available at $2.60 per bushel and natural gas at $5.70 per gigajoule, U.S. ethanol production costs are about $1.20 per gallon of ethanol, or $1.82 per gallon on a gasoline-equivalent basis (gge), a cost that includes a $0.40 per gallon credit from sale of co-products. Adding a 12-percent return on investment raises the cost to $1.33 per gallon of ethanol ($2.20 per gge).
Every $1.00 per bushel rise in the price of corn increases the production cost of ethanol by $0.35 per gallon. Since 2006, the spot market price for corn has regularly exceeded $4.00 per bushel. At that price, ethanol production cost, including a return on investment, is about $2.77 per gge.
In general, U.S. corn ethanol is competitive with gasoline (i.e., would not need a subsidy to compete in the market) when oil prices are in the $66 to $91 per barrel range compared to corn prices in the $2.60 to $4.00 per bushel range. Right now, U.S. corn ethanol receives a subsidy of 51 cents per gallon of ethanol that is blended with gasoline.
- For Brazilian sugarcane ethanol:
Brazil produces sugarcane-based ethanol at costs significantly below those of corn-based ethanol—and, indeed, at lower costs than any other biofuel worldwide.
The estimated cost of the Brazilian biofuel is $0.85 to $1.40 per gge. This makes Brazil’s product at least 30 percent less expensive than U.S. ethanol from corn. In general, sugarcane ethanol is competitive with gasoline at oil prices in the $40 to $50 per barrel range.5
Current Status of Ethanol
With current technology, one bushel of corn yields approximately 2.8 gallons of ethanol,6 or in terms of acreage, one acre of corn generates approximately 330-424 gallons of ethanol.7 In comparison, sugarcane ethanol yields are more than 720 gallons per acre.8
Under requirements in the Energy Independence and Security Act of 2007, 9 billion gallons of ethanol were produced in 2008, which consumed about 30 percent of the U.S. corn crop. Studies suggest that devoting more than 25 percent of the crop to ethanol may result in substantial cost increase in corn prices.9
To produce more corn ethanol, producers have several options:
- Increase the amount of cropland in production,
- Increase the crop yields per acre, or
- Use more efficient processing techniques that increases the ethanol output from one bushel of corn.
Producers can also replace or supplement corn with other feedstocks, such as cellulosic products.
Obstacles to Further Development or Deployment of Ethanol
When assessing GHG emission reductions from biofuels, it is important to examine the full life-cycle emissions of the fuel. Land use changes, land management practices, biomass feedstock, conversion processes and type of energy used in conversion, and transportation of fuel to end users all affect the overall GHG profile of the fuel.
- Land use for biofuel feedstocks
One of the main concerns with the increased use of ethanol is the impact on land use. Land-use changes occur for a variety of reasons, including the need to meet rising demand for food due to rising populations and incomes. As the price of ethanol increases, this creates pressure to convert previously idle land to crop production. Of particular concern is the conversion of forests, peatland, grasslands, or wetlands as a result of this process. On the other hand, land conversions, such as conversion of degraded lands to biofuel production, can have beneficial effects by increasing the ability of the soil to sequester carbon.
- Transportation and use of ethanol
A number of key infrastructure issues will need to be addressed as ethanol production increases. Transporting ethanol to retailers requires an infrastructure separate from gasoline pipelines, because current pipelines are not designed to carry gasoline-ethanol mixes due to the propensity of ethanol to absorb contaminants and water. Transporting ethanol via truck increases both the cost and overall carbon footprint of the fuel. Furthermore, as ethanol production increases, higher level gasoline-ethanol blends (such as E85) are needed to absorb the additional ethanol. Using these higher level blends, in turn, requires special gas station pumps to dispense the fuel and flexible-fuel vehicles, both of which are currently limited in supply.
- Impacts on other agricultural commodities
Producing ethanol from corn can also have an impact on food and feed prices. As ethanol consumption increases, corn is diverted from traditional food and feed markets to ethanol production. Although the exact nature of this increased demand for ethanol is uncertain, implications for agricultural markets will need to be considered as ethanol production increases.
- Other environmental impacts
In addition to impacts on GHG emissions, ethanol production can also have other environmental effects. The increased use of fertilizers and pesticides to grow more corn or sugar cane can result in higher amounts of nitrogen and phosphorous run-off, affecting soil, air, and water quality. Growing feedstocks for ethanol also requires water for irrigation and processing, which can put a strain on local water supplies.10 Converting land to ethanol production also impacts habitat and ecosystems in an area.
Moving forward, it will be important to take a critical look all available technologies and their GHG reduction potential to make sure corn ethanol can be produced cost-effectively and without harmful impacts on food prices and land use, and to transition to other feedstocks.
Policy Options to Help Promote Ethanol
Federal, state, county, and local governments currently support biofuels in a variety of ways. This support falls into two general categories: (1) policies that mandate levels of use for biofuels and (2) policies that offer subsidies or tax credits for biofuel production and/or use.
- Mandates requiring biofuel use
The Energy Independence and Security Act of 2007 established a Renewable Fuel Standard that required the use of 9 billion gallons of corn ethanol in 2008, with mandated use levels increasing annually until 2015 when the requirement reaches 15 billion gallons.
- Taxes and subsidies
Gasoline suppliers receive a 51-cent federal tax credit per gallon of ethanol blended with gasoline. After U.S. production and imports of ethanol exceeds 7.5 billion gallons, the credit decreases to 45-cents per gallon; this decrease is expected to happen in 2009.11 Small ethanol producers (i.e., those with a production capacity of less than 60 million gallons a year) are eligible for a tax credit of 10-cents per gallon of ethanol produced on up to 15 million gallons in a given year.12 Both of these tax credits will expire at the end of 2010 unless renewed by new legislation. On the other hand, imported ethanol incurs a 54-cent per gallon excise tax.
Future policy should take life-cycle emissions into consideration to ensure that corn ethanol production contributes effectively to greenhouse gas emission reductions. For more information on biofuel policies, see Climate TechBook: Biofuels Overview.
Related C2ES Resources
Agriculture's Role in Greenhouse Gas Mitigation, 2006
Climate Techbook: Biodiesel, 2009
Climate Techbook: Biofuels Overview, 2009
Biofuels for Transportation: A Climate Perspective, 2008
MAP: State Mandates and Incentives Promoting Biofuels
Further Reading/Additional Resources
U.S. Department of Energy (DOE), Office of Energy Efficiency and Renewable Energy
- Biomass Energy Data Book, 2008
- Ethanol Basics, 2008
- Ethanol: The Complete Energy Lifecycle Picture, 2005.
Liska, Adam, et al. “Improvements in Life Cycle Energy Effciency and Greenhouse Gas Emissions of Corn-Ethanol.” Journal of Industrial Ecology 13(1): 58 – 74. 2008.
Searchinger, Timothy, et al. “Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land Use Change.” Science 319(5867): 1238 – 1240. 2008.
1 Wang, M., M. Wu, and H. Huo. “Life-cycle energy and greenhouse gas emission impacts of different corn
ethanol plant types.” Environmental Research Letters 2 024001. 22 May 2007.
2 International Energy Agency. 2007. “IEA Energy Technology Essentials: Biofuels Production.” January 2007. Accessed 19 March 2009.
3 Searchinger, T., et al. “Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land Use Change.” Science 319. 29 February 2008.
4 These life-cycle GHG intensities were calculated for the purposes of the California Low-Carbon Fuel Standard program. For more information on the analysis, see California Air Resources Board, Stationary Source Division. Detailed California-Modified GREET Pathway for Brazilian Sugarcane Ethanol. 12 January 2009; California Air Resources Board, Stationary Source Division. Detailed California-Modified GREET Pathway for Corn Ethanol, Release Date: January 20, 2009; and California Air Resources Board. Fuel GHG Pathways Update, Presentation: January 30, 2009.
5 International Energy Agency. 2007. “IEA Energy Technology Essentials: Biofuels Production.” January 2007. Accessed 19 March 2009.
6 Committee on Assessment of Resource Needs for Fuel Cell and Hydrogen Technologies, National Research Council. Transitions to Alternative Transportation Technologies: A Focus on Hydrogen. Washington, DC: National Academies Press, 2007.
7 Budny, Daniel, and Paulo Sotero. “Brazil Institute Special Report: The Global Dynamics of Biofuels.” Brazil Institute of the Woodrow Wilson Center. April 2007. Retrieved on 2008-05-03.
9 Committee on Assessment of Resource Needs for Fuel Cell and Hydrogen Technologies, National Research Council. 2008. Transitions to Alternative Transportation Technologies: A Focus on Hydrogen. Washington, DC: National Academies Press.
10 Chiu, Y., B. Walseth, and S. Suh. "Water Embodied in Bioethanol in the United States." Environmental Science and Technology 43. 10 March 2009.
11 Yacobucci, Brent. 2009. Biofuels Incentives: A Summary of Federal Programs. Washington, DC: Congressional Research Service.
What are Biofuels?
Biofuels encompass any fuel produced from plant- or animal-based feedstock (referred to as “biomass”). The two most common forms of biofuel today are ethanol and biodiesel. Biofuels are used primarily to fuel vehicles, but can also fuel engines or be used in fuel cells to generate electricity.
As countries seek to reduce greenhouse gas emissions from the transportation sector and lessen dependence on petroleum-based fuels, biofuels continue to attract attention as one possible solution. Biofuels offer a way to produce transportation fuels from renewable sources or waste materials and to reduce net carbon dioxide (CO2) emissions because the CO2 emitted during combustion of the fuel is captured during the growth of the feedstock.
Biofuels in the United States
Corn ethanol is the most widely used liquid biofuel in the United States. Most of this ethanol is blended into gasoline for use in passenger vehicles. Gasoline with up to 10 percent ethanol (E10) can be used in most vehicles without further modification, while special flexible fuel vehicles can use a gasoline-ethanol blend with up to 85 percent ethanol (E85). According to EPA, most vehicle models manufactured after 2001 can accept 15 percent ethanol (E15) without modifications. Some industry stakeholders have claimed that E15 may invalidate manufacturer warrantees, although vehicle warrantees vary and might not specifically prohibit a particular fuel., EPA intends to reduce the risk of any misfueling through careful fuel labeling. Biodiesel is the other commonly used biofuel in the United States, primarily produced from soybean oil. The most common blend of U. S. biodiesel is 20 percent biodiesel/80 percent petroleum diesel (B20). Biodiesel can be legally blended with petroleum diesel in any fraction, though vehicle system modifications may be required for percentages higher than B20. Figure 1 shows U.S. consumption of these biofuels over time.
Figure 1: United States Annual Biofuel Consumption, 2001 - 2011
Source: Energy Information Agency (2012) http://www.eia.gov/totalenergy/data/annual/index.cfm#renewable
U.S. non-petroleum liquid fuel production is projected to grow from 1.09 million barrels per day in 2011 to 1.97 million barrels per day in 2040. In 2011, ethanol production was nearly 14 billion gallons (just over 10 percent of total gasoline consumption), in compliance with the Renewable Fuel Standard (RFS) from the Energy Independence and Security Act of 2007. This policy requires that a percentage of fuels come from biogenic sources, directly mandating certain volumes of biofuels. The EPA recently announced that the 2013 mandate for biodiesel will increase to 1.28 gallons from 1 billion gallons in 2012. Mandated advanced biofuel production, meaning fuels with at least a 50 percent emissions reduction from gasoline, will increase from 2 billion gallons to 2.75 billion gallons in 2013 (See Table 1). For more, see C2ES resource Renewable Fuel Standard.
Table 1: RFS Ethanol Equivalent Volume Requirements, 2011 – 2013 (billion gallons unless noted)
Total Renewable fuel (Including Ethanol)
Note: Volumes are ethanol-equivalent, except for biodiesel which is actual volume,
Source: EPA (2013) http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm
Biofuels: Technology and Feedstocks
A wide variety of feedstocks are currently in use or under development to produce biofuels (see Figure 2). These feedstocks differ significantly in the types of lands on which they can be grown, yields per acre, and the fuels into which they are processed.
Figure 2: Current and Emerging Biofuel Pathways
Source: Pena, N., Biofuels for Transportation: A Climate Perspective, 2008. http://www.c2es.org/publications/biofuels-transportation-climate-perspective .
Today’s commercial processes convert simple sugars, starches, or oils to produce biofuels—the fermentation of cornstarch (from the corn kernel), sugar beets, or sugarcane produces ethanol, and the transesterification of oils (e.g., soybean or palm oil) produces biodiesel. Of the feedstocks in use today, sugar beets, sugarcane, and palm oil yield the highest amount of fuel per acre on a gasoline gallon-equivalent basis.
However, the vast majority of available plant material for biofuels is in the form of cellulose, hemicellulose, and lignin. This biomass is not currently used in most biofuel production processes. Because of the high availability of these materials, processes capable of converting cellulose to biofuels represent one pathway to significantly lowering the resources needed to grow biofuel feedstocks. Furthermore, once the cellulose is extracted from the plant to produce the biofuel, the remaining lignin can be used as a fuel to power the biofuel conversion process. Lignin yields energy when burned and further limits the fossil fuel inputs required to produce the biofuel. Researchers are also looking at different sources for oils that can be converted into biodiesel.
Examples of emerging feedstocks include:
- Cellulosic feedstocks, such as perennial grasses (e.g., switchgrass and Miscanthus) or short rotation woody crops, which can be converted to ethanol or other biofuels.
- Industrial waste, includes agricultural wastes such as manure and other processing wastes that are high in protein and fats; these can be converted to oils and then to biodiesel. Other waste biomass includes wood residues from the forest industry and agricultural residues from corn farming; the cellulose in these materials can be converted into ethanol.
- Algae, which can produce oil that can be converted to a number of different biofuels. Additional opportunities are in microalgae (microscopic algae) that can create biomass even more efficiently than terrestrial plants.
- Jatropha, a species able to grow on barren, marginal land, especially in many parts of Asia. Jatropha oil is extracted from the seeds of the plant and can be used to produce biodiesel.
Biochemical Conversion Process
- Biomass must be converted to sugar or other feedstock through
- Pretreatment, a process that removes the protective sheath of lignin and hemicellulose to allow for further enzyme hydrolysis of the cellulose biomass to glucose.
- Conditioning and enzymatic hydrolysis, a process that lowers the acidity of the material so that enzymes and organisms can thrive. The pH is adjusted and the toxicity of the material is lowered.
- The feedstock must then be fermented using:
- Microorganisms developed through metabolic engineering techniques, researchers are developing microorganisms that can more effectively ferment all the sugars in biomass – improving ethanol and expanding feedstock options.
These feedstocks have the ability to reduce greenhouse gas emissions significantly relative to conventional gasoline and diesel fuel. Because they are not food-based and are often processing wastes from other industries, they also have the added benefit of limited competition with agricultural food crops.
Biofuels and Greenhouse Gas Emission Reductions
When calculating the greenhouse gas emission reductions from biofuel use, it is important to examine the full lifecycle of emissions from the fuel. Potential greenhouse gas emission reductions vary widely, depending on many factors including feedstock selection, fuel production through feedstock conversion, and final fuel use. Fossil fuels are often used in growing and processing feedstocks, which can increase the lifecycle emissions for the biofuel. Changes in land use and land management practices to grow biofuel feedstocks also affect the greenhouse gas profile of a fuel. As biofuel production increases, concerns are growing about the actual greenhouse gas reductions achieved by these fuels as well as competing objectives for water and land resources.
If grown in a sustainable manner, biomass is considered a carbon-neutral energy source – meaning that the greenhouse gas emissions, namely CO2, released from converting biomass to energy are equivalent to the amount of CO2 absorbed by the plants during their growing cycles. Sustainable biomass sources refer to those that limit land use change (LUC), avoid pollution, prioritize waste materials, and regrow quickly. Without actions to ensure sustainability, an increase in dedicated crops could result in undesirable impacts in natural settings, such as LUC and pesticide use. Additionally, fossil fuel use in biomass harvesting, transporting, and processing has an effect on total emissions.
Developing greenhouse gas profiles over the lifecycle of a fuel is not an easy task. It is challenging to design scientifically-based, equitable methodologies for estimating lifecycle greenhouse gas emissions for both petroleum- and bio-based fuels, as well as other potential energy-source options. In practice, not all greenhouse gas emissions can be included in a fuel’s greenhouse gas footprint; choices must be made as to which emissions to include. In the case of biofuels, for example, emissions from the manufacturing and use of fertilizers to produce the feedstock are usually included but emissions from building the fertilizer plant itself are not. Some emissions are measurable, including tailpipe CO2, while others must be estimated, such as indirect land use change occurring because of displaced food crops from increased biomass crops.
Figure 3: Diagram of Lifecycle Emissions Pathway, Corn Ethanol
Source: Delucchi, M. “Appendix X: Pathways Diagrams.” In A Lifecycle Emissions Model (LEM): Lifecycle Emissions from Transportation Fuels, Motor Vehicles, Transportation Modes, Electricity Use, Heating and Cooking Fuels, and Materials, http://www.its.ucdavis.edu/publications/2003/UCD-ITS-RR-03-17X.pdf
In order to appropriately use these fuels, governments, scientists, environmental groups, and others recognize the need for improved methods to account for greenhouse gas emissions and other environmental impacts caused by using plant material to produce transportation fuels. Importantly, an International Energy Agency lifecycle emissions scenario shows that biofuels could contribute significantly to reducing emissions if increased from today’s 2 percent of total transport energy to 27 percent by 2050.
Policy Options to Promote Biofuels
The right set of public policy tools could spur innovation and promote the use of low-carbon biofuels from renewable sources. These include renewable fuel policies, financial incentives, low carbon fuel standards (LCFS), research and development (R&D), and vehicle fleet programs.
- Renewable Fuels Standards
Volumetric mandates based on feedstock can push advanced biofuels (e.g., algae-derived biodiesel) into the market by giving suppliers a more predictable level of sales per year.
A volumetric requirement for biofuels requires that fuel providers sell a certain quantity of the specified fuels over an identified time period. Such mandates have the advantage of offering suppliers a guaranteed market for their products, thus accelerating the penetration of new technologies. Current renewable fuel mandates are based on the feedstock that the fuel is produced from (e.g., corn ethanol). The potential downside to a purely volumetric approach is that producers must sell certain amounts of the fuel, without regard to its lifecycle carbon emissions, so the greenhouse gas mitigation benefit from using these fuels may be uncertain.
The Energy Independence and Security Act of 2007 (EISA 2007) updated the federal Renewable Fuel Standard (RFS), originally enacted under the Energy Policy Act of 2005. EISA 2007 increased the previous volumetric targets for biofuels, mandating that 36 billion gallons of renewable fuel must be used annually by 2022. Of this, a certain percentage of the renewable fuel blended into transportation fuels must be cellulosic biofuel, biomass-based diesel, and advanced biofuel (fuels from bio-sources with lifecycle emissions reductions of at least 50 percent below gasoline). See Table 1 for specific RFS figures.The policy requires that EPA set annual standards based on gasoline and diesel projections from the Energy Information Administration. The EPA conducts an analysis of qualifying fuel sources that be made available and has discretion over volume requirements in order to respond to market conditions.
Several U.S. states have also implemented policies to promote biofuel use (See C2ES Resource Biofuels: Incentives and Mandates Map). As of July 2012, 42 states provide incentives promoting biofuel production and use. Additionally, ten states have enacted their own renewable fuels standards.
- Financial Incentives
Incentives take the form of tax credits and exemptions, reduced tax rates, and the provision of grants and guaranteed loans. State and local level examples include production grants and incentives, fleet grants for public school systems, ethanol infrastructure grants, alternative fuel tax credits, and registration exemptions. Federal examples include the United States Department of Agriculture (USDA) programs of Advanced Biofuel Production Grants and Loan Guarantees, the Ethanol Infrastructure Grants and Loan Guarantees, and the Enhanced Biofuel Payment Program. Other examples, administered through the Internal Revenue Service, include the recently extended Biodiesel and Renewable Diesel Tax Credit, the Alternative Fuel Infrastructure Tax Credit, and the Credit for Production of Cellulosic Biofuel.
- Low Carbon Fuel Standard
A performance standard (e.g., a low carbon fuel standard, or LCFS) sets targets for reductions in greenhouse gas intensity for the entire transportation fuel pool, not only biofuels. Under an LCFS, a standard would specify the average carbon intensity for transportation fuels, typically for a given year, expressed as a percent reduction from a baseline (e.g., GHG intensity in 2015 must be 5 percent lower than 2005 levels) (see C2ES resource Low Carbon Fuel Standard Map).
The greenhouse gas intensity for a fuel is calculated on a lifecycle basis, which includes the emissions from production or extraction, processing, and combustion of the fuel. This policy allows manufacturers to produce and retailers to purchase the mix of fuels that most cost-effectively meets the standard. If based on lifecycle emissions accounting, an LCFS is intended to provide a level playing field for all transportation energy sources that may be used in the future, including biofuels, electricity, or hydrogen.
To address some of the concerns with biofuel mandates, California implemented an LCFS through Executive Order S-1-07 (issued on January 18, 2007), which set a goal of reducing the carbon intensity of passenger fuels statewide by a minimum of 10 percent by 2020. In 2012, Oregon began implementing a similar fuel standard by launching Phase I of the Clean Fuels Program, which requires fuel importers and suppliers in the State of Oregon to monitor and report fuel volumes and carbon intensity (the amount of carbon emissions per unit of energy). Upon further approval by the Oregon Environmental Quality Commission, Phase II would require fuel suppliers to gradually lower fuel carbon intensity until it is ten percent below 2010 levels, with achievement anticipated by 2025.
- Research and Development (R&D)
R&D can play an important role in increasing knowledge, proving feasibility, and advancing technology for biofuel production and consumption.  The Environmental Protection Agency Bioenergy Program for Advanced Biofuels Funding, authorized under the 2009 Farm Bill, Section 9005, provides payments to eligible producers that expand production of advanced biofuels from sources other than corn starch. Incentives are intended to diversify the source of biofuel production as well as increase the overall output. Additionally under the Department of Energy and the Department of Agriculture, the Biomass Research and Development Initiative provides grant funds to increase development and demonstration of biofuels. The Department of Transportation also carries out biofuel research in its Bio-based Transportation Research Program in an effort to promote innovation in transportation infrastructure.
- Vehicle Fleet Programs
Some cities and states require that jurisdictions remove aging fleets and incorporate alternatives fuels. An example is the Texas Clean Fleet Program, which provides incentives for entities that operate large fleets to replace diesel engines with alternative fuel vehicles. At the federal level, the Vehicle Acquisition and Fuel Use Requirements for Federal Fleets, under the Energy Policy Act of 1992, requires 75 percent of light-duty vehicles of certain federal fleets be alternative fuel vehicles (AFVs).
Related Business Environmental Leadership Council (BELC) Company Activities
Related C2ES Resources
Further Reading / Additional Resources
Biomass Research and Development Board
International Energy Agency (IEA)
- Biofuels for Transport (2011)
United States Department of Agriculture
- National Agriculture Library: Bioenergy and Biofuels
National Renewable Energy Laboratory
SCOPE: International Biofuels Project, Biofuels: Environmental Consequences and Interactions with Changing Land Use, (2009)
U.S. Department of Energy (DOE)
- Biomass Energy Data Book (2012)
- Office of Energy Efficiency and Renewable Energy, Alternative Fuels Data Center
- Office of Energy Efficiency and Renewable Energy, Biomass Program: ABC's of Biofuels
 Wald, M, “A New Skirmish in the Ethanol Wars” (2012), http://green.blogs.nytimes.com/2012/05/16/a-new-skirmish-in-the-ethanol-wars.
 EPA, Regulation to Mitigate the Misfueling of Vehicles and Engines with Gasoline Containing Greater Than Ten Volume Percent Ethanol and Modifications to the Reformulated and Conventional Gasoline Programs, (June 2011), http://www.epa.gov/otaq/regs/fuels/additive/e15/420r11006.pdf
 National Renewable Energy Laboratory, Biodiesel Handling and Use Guide (2009), http://www.nrel.gov/vehiclesandfuels/pdfs/43672.pdf.
 Energy Information Administration (EIA), Liquid Fuels Supply and Disposition, Annual Energy Outlook Early Releaser (2013) http://www.eia.gov/oiaf/aeo/tablebrowser/#release=AEO2013ER&subject=2-AEO2013ER&table=11-AEO2013ER®ion=0-0&cases=early2013-d102312a.
 In 2011, the United States consumed about 134 billion gallons (or 3.19 billion barrels) of gasoline, a daily average of about 367.08 million gallons (8.74 million barrels), EIA, http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10.
 EPA, EPA Proposes 2013 Renewable Fuel Standards (2013), http://www.epa.gov/otaq/fuels/renewablefuels/documents/420f13007.pdf.
 EPA, EPA Proposes 2013 Renewable Fuel Standards (2013), http://www.epa.gov/otaq/fuels/renewablefuels/documents/420f13007.pdf.
 Transesterification is a process that modifies the oils in the feedstocks by replacing glycerin in fatty acid chains of vegetable oils with methanol.
 It is necessary convert biofuels to their gasoline-equivalents because the different fuels have different energy content. For example, ethanol contains only 66 percent as much energy per gallon as a gallon of gasoline.
 Cellulose is complex carbohydrate and the main structural component of plants. Hemicellulose is similar to cellulose and found in plant cell walls. Cellulose and hemicelluloses account for 25 to 50 percent of plant material. Lignin is a polymer that provides rigidity to plants cell walls and is second largest component of plant biomass.
 IEA, Technology Roadmap Biofuels for Transport ( 2011), http://www.iea.org/publications/freepublications/publication/biofuels_roadmap.pdf.
 EPA, Renewable Fuels: Regulations and Standards, http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm.
 C2ES, State Mandates and Incentives Promoting Biofuels, http://www.c2es.org/us-states-regions/policy-maps/biofuels.
 C2ES, Oregon Approves Phase I of Low Carbon Fuel Program (2012), http://www.c2es.org/us-states-regions/news/2009/oregon-governor-signs-legislation-low-carbon-fuel-standard.
 Oregon Department of Environmental Quality, Oregon Clean Fuels Program, http://www.deq.state.or.us/aq/cleanFuel/qa.htm; Proposed Rulemaking Announcement (2011) http://www.deq.state.or.us/aq/Rulemaking/CleanFuelsNoticeofProposedRulemaking.pdf
 Biomass Research and Development, http://www.usbiomassboard.gov/related_information/related_information.html .
 EPA, Program for Advanced Biofuels, http://www.epa.gov/agstar/tools/funding/incentive/USbioenergyprogramforadvancedbiofuels.html.
 Texas Commissions on Environmental Quality, Texas Clean Fleet Program, http://www.tceq.texas.gov/airquality/terp/tcf.html.
By: Eileen Claussen and Jim Rogers
March 31, 2009
This article originally appeared in the National Journal's Energy & Environment Experts Blog.
Let’s get one thing straight: Though not perfect, we like the way President Obama and his team are addressing the potential catastrophe of climate change.
The Administration unequivocally accepts the underlying science. They realize that the cost of not acting will be far greater than the cost of taking responsible action – and that the longer we wait, the greater the costs will be for American consumers. Their emissions goals are ambitious but achievable, as is the timetable to meet them. And we agree that cap and trade is the right way to go. It’s based on common sense capitalism: it puts a price on carbon and rewards facilities that can reduce carbon dioxide and other greenhouse gases at the lowest cost, even as it provides incentives for others to find more economic ways to reduce their own emissions.
Where we temporarily part ways is when it comes to the Administration’s proposal calling for a full auction of emission allowances. How these allowances are distributed doesn’t change the overall environmental goal set by the cap. We believe it is critical that a number of them be used to reduce price impacts on households and businesses – in the early years of the program. Just this week Chairmen Waxman and Markey released a discussion draft of energy and climate legislation that leaves open how we can best address this critically important issue.
In all states, electricity is distributed by local companies regulated by public service commissions whose fundamental purpose is to protect consumers and keep electricity rates low. We recommend protecting households and businesses that purchase electricity from utilities by providing allowances to the regulated distribution companies during a transition period.
There is little question that an auction, in which allowances to emit specified amounts of carbon are sold to the highest bidders, will result in a price spike for electricity in some regions. That price spike will hit households and businesses the hardest, and for some, it will be very tough to manage.
We believe we need a climate change plan that protects against price spikes in electricity bills. Our plan would effectively curb carbon, limit the risk of price volatility, target relief to those who need it most, and take advantage of the distribution companies’ and public service commissions’ ability to deliver energy efficiency.
During the transition period from granting allowances to a full auction, there would be no windfall for utility companies or their investors. The legislation itself and actions by public service commissions would guarantee it. On the flipside, there would not be huge price increases for electricity in coal-fueled states and a much smoother transition to a cleaner economy. If this approach is not taken, the whole argument for climate change legislation could be moot – senators and representatives from those states might effectively kill legislation mandating cap and trade.
Overall, we think a cap-and-trade system that shifts from granting allowances to a full auction over time will provide the most reasonable transition to the low-carbon and thriving economy we all desire. To help ensure a smooth transition, granting allowances and auction revenues should be used to help cushion workers, households, and vulnerable industries from volatile prices. It should also support the development of critical low-carbon technologies like carbon capture and storage, and assist in efforts to better adapt to the climate change we are already beginning to experience.
With a price on carbon, energy companies will more rapidly invest in clean technologies, as long as they can be certain that future regulations neither bankrupt them nor mandate that they bet on specific untried technologies. It will also help them look deeper into renewable sources of energy, be they solar, wind, hydropower, or even agricultural waste. They will rethink nuclear power which, despite its scary image, is actually a safe, clean way to generate electricity.
We know that some of those technologies still need the kinks worked out, and that others remain prohibitively expensive. But this is where the government could use some of the revenues that it gets from auctioning allowances to other emitters now, and to utilities and competitively challenged manufacturers down the road.
We’re not ostriches, and we’re not Pollyannas. We know there is a cost to addressing climate change, and that this cost will filter down to big business, to small business, and to households. Utilities that buy carbon allowances or shift to lower-carbon generating options will have to increase their rates, but energy efficiency can lower customer bills even in the face of rate increases. And there will be far less economic upheaval if higher prices come gradually, which our transition program would ensure.