Lifecycle greenhouse gas (“GHG”) emissions analyses seek to quantify the GHG emissions created by the manufacture of the product through transportation to the consumer, use and disposal. Such analyses are generally considered the most effective means of establishing the full impact of a product on climate change. Estimating the emissions generated at each stage, however, is difficult and controversial. The Environmental Protection Agency (“EPA”) will weigh in on the debate this year when the agency commences a rulemaking on lifecycle GHG emission reduction targets for renewable fuels. The methodology that EPA chooses to measure lifecycle GHG emissions will be critical to the burgeoning biofuels industry and will likely set the standard for future regulation of other carbon-intensive industries.

The 2007 Energy Independence and Security Act, Pub. L. No. 110-140 (2007) (the “Act”) requires for the first time that biofuels meet stringent lifecycle GHG emissions targets to qualify for the Renewable Fuel Standard (“RFS”). The Act obligates EPA to complete a rulemaking by December 2008 that would establish the appropriate model and inputs for estimation of lifecycle GHG emissions and finalize emission reduction targets that renewable fuels must meet to be considered for the RFS. EPA is working on the draft rule and expects to issue a notice of proposed rulemaking by late summer, making it highly unlikely that EPA can meet the statutory deadline.

This rulemaking will lock biofuels producers into stringent lifecycle GHG emissions reduction targets. The Act establishes as a baseline the lifecycle GHG emissions from the 2005 baseline for traditional transportation fuel. It then requires that, to qualify for the RFS, any renewable fuel produced in a facility under construction as of December 2007 must meet a threshold 20 percent reduction from that baseline. As of 2009, the subcategories of renewable fuel created by the Act – cellulosic biofuel, advanced biofuel and biodiesel – must meet lifecycle GHG emissions reductions of between 50 percent and 60 percent from the 2005 baseline.

The EPA may adjust these lifecycle GHG emission reduction targets as parts of its rulemaking only if “such reduction is not commercially feasible for fuels made using a variety of feedstocks, technologies and processes . . .” Id. § 202(c). EPA may not, however, reduce any of the targets by greater than 10 percentage points, and must set any adjusted target at the “maximum achievable level” of reduction. Id. For example, EPA may reduce the 20 percent reduction in GHG emissions for renewable fuels to the “maximum achievable level,” but EPA may not lower the target below 10 percent reduction. Once these reduction targets are finalized by EPA, the Act restricts future adjustments to the targets unless the agency determines that there are “significant” developments in the methodology used to estimate lifecycle GHG emissions.

EPA‘s rulemaking to establish a method for determining lifecycle GHG emissions for renewable fuels will likely set a precedent for lifecycle emissions evaluations in other areas. EPA has previously indicated that establishing a methodology for estimating lifecycle GHG emissions will require it to make decisions about the use of various metrics and models, each with differing inputs and assumptions, and each of which remain “the subject of debate among researchers.” 72 Fed. Reg. 23,900. 23,907 (May 7, 2007). Barring a congressional directive in subsequent legislation, once EPA identifies the assumptions and methodologies used in establishing lifecycle emissions evaluations for renewable fuels, the Agency will seek to apply the same assumptions and methodologies in future rulemakings involving other products and other industries. Those who choose to watch from the sidelines may find themselves behind the curve as climate change regulation gains momentum.

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