Cedar Rapids appears to be the primary impact point for a national policy now being decided in Washington, D.C. The regulatory treatment of natural carbon dioxide, or biogenic CO2, from agricultural crops will have important consequences for the environment and rural economies, especially in Iowa.
The Environmental Protection Agency (EPA) regulates CO2 emissions from stationary sources the same whether the CO2 is from a fossil fuel, where the CO2 was captured millions of years ago, or agricultural crops, where the biogenic CO2 is part of an annual cycle of carbon capture and release. A consensus of the scientific community agrees that makes no sense. Earlier this year, twenty-one leading climate scientists wrote to EPA Administrator Wheeler to urge him to change this policy. A recent comprehensive review of the scholarly literature on the subject confirmed that biogenic CO2 from agricultural crops is carbon neutral or de minimis as a greenhouse gas.
Recently, the American Farm Bureau, National Farmers Union, National Corn Growers Association, Corn Refiners Association, and others petitioned EPA to issue a rule recognizing the de minimis character of biogenic CO2 from agricultural crops. By acting swiftly on that petition, EPA has a critical opportunity to enact positive change, spurring innovation and investments in rural communities. Indeed, Administrator Wheeler has repeatedly said that this is on his “to do” list and political leaders from both parties have urged him to act.
This sounds like just another pointy headed regulatory policy issue out of Washington. Why is it so important to Cedar Rapids?
First, this policy is the regulatory roadblock to development of the bioeconomy in the U.S. The permitting requirements it entails can easily add up to two extra years when modernizing an agricultural crop processing facility and add immeasurably to litigation risk. Because EPA is the only regulatory authority in the world to impose this absurd requirement, our foreign competitors have an advantage. So, this policy encourages investment in agricultural crop processing facilities overseas, rather than in the U.S. That is a disadvantage for U.S. farmers and rural jobs.
Second, this regulatory roadblock is thwarting the development of new bioeconomy products, where corn and other agricultural crops can replace fossil fuels as feedstocks for plastics, chemicals, and countless other products that hold important environmental promise. For example, corn-based plastics not only are better than petrochemical based plastics in terms of greenhouse gas emissions, but can be compostable or recyclable, offering benefits for water quality and soil health. By unleashing the U.S. bioeconomy, EPA can foster environmentally-friendly innovation and drive rural job creation.
Third, Cedar Rapids is poised to take advantage of bioeconomy development. It is the only city in the world with three corn wet mills. The Cedar Rapids corn refineries operated by Archer Daniels Midland, Cargill, and Ingredion add smartly to the economy of Cedar Rapids area with high-paying jobs and an amazing appetite for corn. Annually, these three facilities purchase and process 1 million bushels of corn per day, the equivalent of all the corn produced within in the twelve surrounding counties of Cedar Rapids.
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The State of Iowa recognizes the potential of the bioeconomy. Gov. Kim Reynolds recently led a group of five governors in a letter to Wheeler urging him to remove the agricultural crops biogenic CO2 regulatory roadblock. They said, “The agricultural sector in our states is poised to invest billions of dollars to develop the potential of the bioeconomy, if only EPA would remove the threat of unwarranted regulatory burdens.” Sen. Joni Ernst and Congresswoman Abby Finkenauer have also weighed in to help. The State of Iowa has even developed tax incentives to seize the long-term benefits of bioeconomy infrastructure development. So, Iowa is especially well positioned to compete globally, if only EPA would permit Iowa to have a fair chance.
One final point. Development of bioeconomy infrastructure requires huge investment in heavy manufacturing facilities. When that investment is made, it stays put and has long term advantages. It is the long-term advantage of Cedar Rapids that it already has three corn wet mills with potential to efficiently modernize to meet growing bioeconomy demand. Rather than allowing long-term investment in bioeconomy infrastructure to continue overseas, EPA can take concrete steps now to position the U.S. bioeconomy for success in the long-term.
Like the leaders of Cedar Rapids’ three corn wet mills and national agriculture leaders, community leaders of Cedar Rapids should also insist that EPA clear the biogenic CO2 regulatory roadblock. In this election season, candidates should be asked where they stand on this issue.
John Bode is president and CEO of the Corn Refiners Association.