Farm state lawmakers and agribusiness have been hammering the EPA since it announced a plan last year for evaluating biofuels by their lifecycle emissions — including indirect land use changes.

It appeared then that corn-based ethanol wouldn’t make the cut. The proposed rules, based on the 2007 Energy Independence and Security Act, required renewable fuels’ lifecycle emissions to be at least 20 percent less than gasoline's. An early EPA review calculated that, with greenhouse gases from indirect land-use changes included, most corn ethanol wasn't much better than regular gas.

The EPA has now finalized the renewable fuel standard, and agency Administrator Lisa Jackson announced today that corn ethanol will qualify after all.

“EPA has found that it is indeed 20 percent less greenhouse gas emitting than gasoline,” Jackson said. “Based on what we know now, including indirect land use analysis, there is no basis to exclude these fuels.”

What changed in less than a year?

Jackson told reporters that the agency wasn't trying to appease any industries, and she rejected the suggestion that the EPA had changed the science to meet an outcome.

U.S. crop productivity, the amount produced per acre, is at record levels, and “the numbers used in the proposal were not right,” she said. With updated numbers, the agency came up with different results.

The EPA also recalculated its estimates of emissions from indirect land-use changes, known to be a large contributor to emissions but difficult to track. An example of indirect land-use changes, or ILUC, would be the greenhouse gases emitted from the razing of forests to grow food in Brazil because land that could have produced food in the United States was shifted to fuel crops instead. The EPA’s initial assessment took land use in 40 countries into account; the new calculations were based on 160 countries, Jackson said.

"This is, at its root, an effort to reduce greenhouse gas emissions," she said.

That effort is expected to cut oil imports by $41.5 billion and reduce emissions the equivalent of taking 27 million vehicles off the road.

A Message to the Biofuels Industry

The White House is “sending a very positive, very specific, very direct message that the Obama-Biden administration is highly supportive of the biofuels industry,” Agriculture Secretary Tom Vilsack told reporters.

That message came in three measures announced by President Obama during a meeting today with governors at the White House. First was the EPA’s finalization of the renewable fuel standard, designed to provide guidance in meeting a congressionally mandated goal of 36 billion gallons of biofuel a year by 2022. The second was guidance from the Agriculture Department on rules for funding under the Biomass Crop Assistance Program to help meet that target. And the third was the release of a report by a government panel led by Vilsack, Jackson and Energy Secretary Steven Chu describing a national strategy for advancing biofuel development and commercialization.

The president also announced that he was creating another interagency task force to develop a strategy for developing carbon capture and storage for emissions from coal, with a goal of having five to 10 demonstration projects in operation by 2016. Chu said the target was commercial deployment in 10 years.

“We’re intent on showing that science and technology can drive down the cost to where it’s becoming an affordable solution,” the energy secretary said.

Behind on the Biofuels Targets

The DOE determined last year that the United States was unlikely to make its 2022 target for biofuel production. So far, only about 12 billion gallons of biofuels are being produced annually.

Production of cellulosic ethanol, such as from wood chips and plant waste, was supposed to hit 100 million gallons by 2010 but is only about 6.5 million gallons now. Advanced biofuels such as algae are in their infancy. Instead, the bulk of today's biofuel is corn ethanol.

Existing corn ethanol production was grandfathered in under the 2007 energy law, which calls for 15 billion gallons of corn ethanol by 2022, but new operations faced the barrier of meeting the 20 percent rule under the EPA initial land-use change estimates. The new EPA assessment changes the landscape.

Jackson stressed, however, that those new biofuel operations will still have to meet the lifecycle emissions limits. The percentages are even higher for advanced biofuels, at 50 percent less, and 60 percent less for cellulosic biofuels.