Predicted Increase in Ethanol Production

Poses No Changes in Land Use

A new study released by Air Improvement Resource, Inc. (AIR) focuses on the impact increased grain-based ethanol production may have on land use changes.  According to this study the best estimate impact of expanding ethanol production to 15 billion gallons by 2015 will have no U.S. or international land use impact.

Reporting that expansion of ethanol production as required by federal RFS should not result in new forest or grassland conversion, this study calls into question some of the widely reported assumptions that expanding the ethanol industry would result in deforestation or a decline in corn exports or stocks.

The report found it very unlikely that land from the Conservation Reserve Program will be needed to meet corn ethanol demand. Most of the new demand for corn will come simply from a higher yield per acre to 183 bushels in 2015; an incremental amount of land previously used for wheat or soybeans may be used as well.

Land devoted to wheat has been on the decline over the long term due to higher yields per acre, along with a lesser demand for the product itself due to the increased demand for higher protein diets.

Since soybean yields are much lower than corn yields per acre, any soy meal that is replaced by DG greatly reduces land-use impact than if only corn is replaced.  With this updated data, the land use credit would be nearly 71%.

The report also noted that one pound of distillers grain (DG) replaces 1.3 lbs of base livestock feed (corn and soybean meal). As such, the net amount of land used in ethanol production is much lower than previously estimated. 

This analysis sheds important light on the importance of using up-to-date data in attempting to model the impacts of indirect land use change.  Previous studies appear to be based on overly conservative projections for crop yield growth, significantly undervaluing distillers grains credits and other questionable assumptions.

To view full study click here