This study uses a national agro-environmental production model to evaluate the environmental and economic impacts of introducing a market for corn stover to support a stover-based ethanol industry.

Key Findings

  1. Even moderate harvest of corn stover and other agricultural residues for use as an ethanol raw material, or “feedstock,” threatens to significantly increase erosion and emissions of greenhouse gases (GHG) from the agricultural sector.
  2. The estimates of stover availability appearing in the USDA/USDOE report “Biomass as Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply” rely on harvest levels that would substantially increase erosion levels and GHG emissions from agriculture and are therefore unsustainable.
  3. A large-scale switch to no-till agricultural production would mitigate the increased risk of erosion, but would be relatively ineffective at managing the risks of increased soil carbon loss and increased agricultural GHG emissions that arise with harvest of corn residues. Alternative best management practices (BMPs) for agriculture, including increased use of cover crops, green manures, and precision nitrogen management, may be effective at addressing negative impacts to air, water, and soil resources.
  4. Effective integration of BMPs into crop rotations with corn stover harvest will require greatly increased federal investment in research on the long-term impacts and effectiveness of BMPs as well as on overcoming obstacles to farmer adoption.
  5. The current system of incentives is not suffi cient to induce farmers to voluntarily adopt BMPs such as no-till production in association with corn stover harvest to reduce damaging side effects. Farmers do not switch to no-till production unless the price received for stover is significantly higher than the price at which conventional stover enters the market. Additional incentives and safeguards must be established to ensure sustainable supply.

Executive Summary

Prompted by volatility in oil markets, growing concerns about global warming, and an interest in supporting farms and rural communities through stronger agricultural markets, several groups in the United States have turned their attention to the potential for ethanol to alleviate our dependence on oil. The domestic ethanol industry has expanded rapidly in recent years, but in the United States, as in other countries, that development has relied heavily on government support. Until 2005, direct support was primarily in the form of tax incentives; the Volumetric Ethanol Excise Tax Credit (VEETC) provides blenders with a tax refund for blending ethanol with gasoline that has ranged between $.54 per gallon and $.45 per gallon. To further catalyze expansion of the renewable fuels market, Congress passed in the 2005 and 2007 energy bills a federal Renewable Fuels Standard (RFS) that mandates increased blending of renewable fuels into our fuel supply.

The sugars found in corn kernels are currently the predominant feedstock for the burgeoning ethanol industry in the United States. However, as increasing world food prices heat up the food versus fuel debate, and scaling up corn production for ethanol use raises environmental concerns (Marshall and Greenhalgh, 2006; Marshall, 2007), increased attention has turned to the potential for second-generation ethanol technologies to free the domestic ethanol industry from its dependence on corn grain. Advanced technologies such as cellulosic conversion, which would allow the production of ethanol from the complex sugars in leaves and stalks, promise to radically broaden the range of possible ethanol feedstocks. Potential future feedstocks include woody biomass such as forest residues, post-consumer municipal solid waste, and agricultural residues such as wheat straw and corn stover— the leaves and stalks that remain behind when corn grain has been harvested.

It is widely believed that cellulosic technologies will allow us to produce ethanol with a smaller environmental footprint than corn-based ethanol. In the expanded RFS passed with the Energy Independence and Security Act of 2007, the amount of corn-grain ethanol that can qualify for the RFS was capped to provide an incentive for the development of second-generation technologies such as cellulosic ethanol. Furthermore, the 2008 Farm Bill includes a cellulosic biofuels production tax credit of up to $1.01/gallon, on top of the VEETC described above, and a “Biomass Crop Assistance Program” that supports farmers as they establish and grow cellulosic biomass crops. As we advance policy to encourage cellulosic production, however, we cannot assume that “better than corn” means sustainable. Different feedstocks will have widely varying environmental footprints that must be understood and acknowledged within flexible biofuel policies that ensure sustainable outcomes. Designing such policies will require greatly increased investment in understanding the potential impacts of various proposed feedstocks, how producer decisions infl uence those impacts, and how producer decisions respond to policy and market incentives.

Policy Recommendations

  1. All biofuel incentive programs and policies, including the 2007 Renewable Fuel Standard and the Volumetric Ethanol Excise Tax Credit, should be revised to include a broad array of safeguards to protect air, soil, and water quality.
  2. Existing federal biomass research programs, such as the jointly administered USDA/USDOE Biomass Research and Development Initiative, should be fully funded and should prioritize research on the short- and long-term environmental impacts of harvesting stover and other biomass crops in their funding allocations.
  3. Environmental safeguards attached to feedstock production should be performance-based rather than technology- or feedstock-specific. Performance-based safeguards offer maximum flexibility in that they provide incentives for improving feedstock management practices without pre-judging what levels of sustainability are achievable by a given feedstock.
  4. To complement feedstock-specific research, greater investment is required for the development of tools to measure the performance, or environmental impacts, of agricultural systems in an affordable and accurate way. Such tools are the foundation of cost-effective agricultural and biofuel sustainability policies.
  5. Programs within both USDA and EPA should invest more heavily in research on the contribution of nitrogen (through nitrous oxide) and soil carbon to greenhouse-gas emissions from agriculture and in ways to manage those contributions through both on-farm and off-farm changes in production practices and land management.