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Identity-preserved corn next for ethanol industry?

Under proposed rules published by the Environmental Protection Agency, farmers might have to deliver identity-preserved corn to an ethanol plant if the plant wants to remain eligible for ethanol mandates. The plant would have to be able to trace the corn in processes to existing farmland, not land that has recently been broken up for crops.

One of the EPA's proposals for keeping corn ethanol coming from existing cropland "is very much akin to an identity preserved program," said Geoff Cooper, vice president for research with the Renewable Fuels Association.

Cooper laid out the latest threat to the ethanol industry Monday as he and RFA president, Bob Dinneen, described part of the testimony they'll offer to EPA Tuesday when the agency holds a hearing on its plans to continue putting the 2007 energy bill into effect. The law mandates a huge leap in the use of renewable fuels -- to 36 billion gallons -- by 2022. Most of that will come from cellulosic ethanol eventually. But meanwhile, the EPA is writing rules designed to ensure that existing biofuels, ethanol and biodiesel, really are greener than petroleum.

One big controversy has been EPA's estimates of how one indirect effect of ethanol expansion –greater land use for crops in other nations, especially in tropical rainforests—may increase greenhouse gas emissions.

Dinneen said the RFA and others in the industry still don't know exactly how EPA calculated indirect land use. And, he said, when Congress wrote the energy law, it did not intend for EPA to look at land use changes outside of the United States.

"I think the fact of the matter is there is a growing sense that EPA needs to address this issue and Congress is prepared to step in if it doesn't," Dinneen said.

He said he has almost no doubt that House Speaker Nancy Pelosi talked about the indirect land use issue when she met with House Agriculture Committee Chairman Collin Peterson last weekend, although he doesn't know what changes in legislation might have been discussed.

Dinneen said that EPA's analysis hasn't held up. For example, for every 1 million gallons of new ethanol production, its computer modeling forecast a loss of U.S. corn exports of 3,000 tons.

"That has absolutely not happened in the real world," Dinneen said. Instead, over the last three years, corn exports increased about 66 tons for every million gallons of ethanol expansion.

That's a key point in the debate about indirect land use, since decreasing U.S. exports would be expected to drive greater corn production in other countries. And, while corn acreage has gone up in some places like Eastern Europe, the rate of cutting down tropical rainforest actually slowed down just as the U.S. ramped up ethanol production.

The issue of using identity preserved corn hasn't gotten as much attention, Cooper told Agriculture Online later on Monday.

Under the 2007 energy law, ethanol made from corn cannot come from nonfarmland that's been broken out to raise corn after the law took effect (on December 19, 2007).

Under the EPA rules, corn from land formerly in the conservation reserve program on pasture on cropland would be ok. But if a rancher in South Dakota, for example, plowed up rangeland to grow corn in 2008, a corn ethanol plant couldn't accept it and still have its fuel qualify for mandates under the Renewable Fuel Standard.

"If the ethanol plant could prove that it came from new ground, then they would be obligated to not use that feedstock," Cooper said.

EPA has offered several ways to meet this requirement of the law. One might be as simple as setting a national baseline for corn acres and, if they don't increase from that baseline, it wouldn't require much of ethanol plants, Cooper said.

But one option would be a complicated record keeping system that's similar to buying identity preserved grain, a system currently used mainly for high-value food crops. And, making it even more complicated, roughly half of the corn now used by ethanol plants doesn't come directly from farmers, but from grain elevators or other grain sellers.

"I really don't think it was the intent of Congress to suggest that every bushel of corn that's processed into ethanol have the level of traceability that EPA is proposing," Cooper said.

Under proposed rules published by the Environmental Protection Agency, farmers might have to deliver identity-preserved corn to an ethanol plant if the plant wants to remain eligible for ethanol mandates. The plant would have to be able to trace the corn in processes to existing farmland, not land that has recently been broken up for crops.

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