Half of the diesel fuel in California is produced not from unsustainable oil but from renewable biomass, such as waste and vegetable oils. Soon all our diesel will be biofuels. This is particularly good for the environment if the fuel is made from waste and residue, but much less so if it is made from crops that use energy and land but do not produce food.
Unfortunately, a proposed amendment to California's Low Carbon Fuels Standard threatens to put the state, the country and the world on a path toward greater dependence on crop-produced diesel, ensuring more widespread destruction of tropical forests and land diversion agriculture from food production to energy production.
California pioneered the standard to support the development and use of low-carbon fuels for transportation. It effectively encourages oil companies to subsidize low-carbon fuels and electric vehicles without bankrupting them, and the only costs to taxpayers are administrative. This innovative policy has been replicated in Oregon, Washington, and Canada, while other states and Congress are considering comparable measures.
The fuel standard incentivizes the use of renewable diesel made from waste oil and crops, a major success of the policy. Renewable diesel can be used in virtually any diesel engine, reducing greenhouse gas emissions by 70% or more when made from used oils.
However, the environmental benefits are much less substantial when the fuel is made from oils from crops such as soybeans or canola. This is because these crops require energy, fertilizers and land, among other environmental consequences.
Renewable diesel offers such an attractive business opportunity to oil companies that two Bay Area refineries are being converted to produce it, possibly by the end of this year. California-inspired renewable diesel is booming across the country.
However, as the industry grows, it has some unintended consequences. Until recently, most renewable diesel was made from waste cooking oil, rendered beef fat, and corn ethanol byproducts. But now those domestic sources of used oil are largely depleted. In fact, the United States has to import not only waste-based fuels but also the waste and residue itself to supply our processors.
That means more and more renewable diesel is likely to come from oil produced from soybeans and other food crops. We know from experience that the growing demand for plant-based oils (whether for food, feed or biofuels) is leading to increased clearing and burning of tropical forests in Southeast Asia and South America to expand palm oil and soybean production. . This deforestation releases massive amounts of greenhouse gases by burning trees that have sequestered carbon for centuries. It also damages watersheds, disrupts indigenous communities, and causes a host of other social and environmental problems.
If what happened in California stayed in California, we wouldn't be so worried. Global vegetable oil producers could probably replace California's remaining fossil fuel diesel without much additional damage.
But other jurisdictions that have adopted or are considering policies like California's are watching the state closely. And the Treasury Department, the European Union and global airlines are on the verge of adopting vegetable oils as substitutes for fossil fuels used in aviation. Therefore, what California decides about renewable diesel will have far-reaching effects.
The California Air Resources Board is updating the Low Carbon Fuel Standard this year to raise its goals and make other adjustments, including expanding its scope to include jet aircraft operating within the state. However, it does not propose stopping the use of fuels derived from crops. If the board does not address this issue, it could spur widespread conversion of tropical forests and food production to energy.
So what should be done? We have two ideas.
The first is to update the fuel rule's nearly 10-year-old estimate of the greenhouse gas impact of increased crop production. There is considerable evidence that the current estimate greatly underestimates actual emissions. Crops such as soybeans would become less attractive for renewable diesel production if the rule were corrected.
It's an elegant and deceptively simple setting. The problem is that there is no scientifically established method to make an estimate, even after extensive study. Choosing a new figure risks endless debates and lawsuits from the oil industry and other threatened interests.
We are leaning towards a second idea, which is to limit the use of crops to produce fuel. Most environmental groups favor this approach, and the California Air Resources Board has considered it. But while it's a simple concept, it would be complicated to implement and would need to be updated frequently to provide flexibility for businesses as conditions change.
Whatever approach regulators take, they should do so quickly, before the rapid growth of renewable diesel has irreversible repercussions. Inaction risks derailing one of California's key climate policies in ways that will reverberate around the world.
Colin Murphy is deputy director of the Energy, Environment and Economics Policy Institute at UC Davis, where he co-directs the Low Carbon Fuels Policy Research Initiative. Daniel Sperling is a professor of engineering and environmental science and policy at UC Davis and a former member of the California Air Resources Board.
