Rethinking ILUC Part 1: California Falters on Clean Fuels

By Veronica Bradley, Director of Environmental Science

On November 6, the California Air Resources Board (CARB) hosted a Public Forum on Land Use Change (LUC) and other issues central to the clean fuels industry. For those of us invested in both the future of sustainable agriculture and the success of biodiesel, renewable diesel and sustainable aviation fuel (SAF), it was a familiar story - one propped up by selective facts and stripped of balance. The conversation failed to move beyond outdated assumptions about biofuels' relationship to land use, spearheaded by the same speakers who have been against crop-based fuels for time immemorial. Notably, these were the voices CARB chose to highlight. Yet, at a time when consensus on sustainable fuels is urgently needed, CARB declined to invite industry's perspective to the stage. While the Forum checked a procedural box for CARB, it sorely missed the chance to engage in an honest discussion about the complex reality of balancing environmental risk and economic reward.

Under California's Low Carbon Fuel Standard (LCFS), soy- and canola-based fuels are assigned carbon intensity (CI) scores that are 50% to over 100% higher than they would be otherwise. This increase comes from the so-called indirect or induced land use change (ILUC) value - a theoretical estimate of global land conversion emissions that are assumed to result from increased demand for crop-based fuels. For those unfamiliar with this debate, the narrative presented at CARB's Forum could leave the impression that U.S. biodiesel and renewable diesel are driving global hunger and tropical deforestation. That's simply not true - and it's deeply problematic that the clean fuels industry wasn't invited to share the data that tells a more complete story about the food-climate-energy nexus.

If our industry had been invited to present at the Forum, the audience would have learned what we know and hold true as we seek to accelerate the adoption of clean fuels. Namely, the audience would have learned:

• Mitigating emissions now is substantially more valuable than doing so later.
• Good policy is a balance of environmental, social and economic aspects, not the environment at the expense of everything else.
• Crop-based fuels complement, not compete with, food production.
• The problem is not farming revenue. It is, however, responsible land stewardship.
• Agriculture cannot only be a part of climate solutions; it must be a part of climate solutions.

The Time Value of Carbon: Mitigation Delayed Is Mitigation Denied

Climate science is clear: mitigating emissions now is substantially more valuable than doing so later. According to the latest carbon impulse response functions, waiting five years to cut emissions requires over 13 times more reductions to have the same climate benefit. In other words, early action counts - by making incremental progress now, we can buy ourselves more time and less irreversible impacts.

This is particularly important to agriculture, the myriad markets that are built on its shoulders, and the very topic CARB sought to explore: land use change. That's because delaying the switch to bio-based alternatives away from fossil fuels could actually accelerate cropland expansion and agriculture's greenhouse gas emissions since crop yields are highly likely to decline in a hotter world. The LCFS credit system was even designed with this in mind, rewarding early action with banked credits. Banking credits then isn't just fiscally responsible - it's environmentally responsible.

Real Sustainability Balances Climate, People and Prosperity

As the Brundtland Commission defined decades ago, sustainability means "meeting the needs of the present without compromising the ability of future generations to meet their own needs." That includes the triple bottom line: environmental integrity, economic viability and social well-being. But this idea that all three aspects are important was seemingly absent from CARB's Public Forum. One of the more reasonable speakers even seemed to suggest that there's a direct relationship between biodiversity loss and increased biofuel consumption. This argument relies on a linear relationship between biofuel demand and cropland expansion - a connection that doesn't actually exist. It also ignores the fact that failing to decarbonize in the near term can result in the exact same environmental loss, and it overlooks the economic and employment opportunities that are at least as important to society writ large and that low-carbon liquid fuels are one of the most cost-effective ways to reduce the near-term emissions contributing to climate change in the first place.

The International Energy Agency projects that scaling sustainable fuels could create nearly two million new jobs globally - many in rural communities where opportunity is most needed. This theme was on full display during the full hour that Brazil was given to speak to sustainable crop-based fuels' economic opportunity for their country. From their presentations it was readily apparent that economic growth, energy security and environmental performance are not mutually exclusive. California's Low Carbon Fuel Standard can promote them all more fairly.

Food and Fuel - Not Food vs. Fuel

Biofuels critics often frame agriculture as a zero-sum competition between food and energy. One presentation suggested that laying out solar panels across the corn belt would be better for producing energy than crops but then appeared to only consider the energy produced from the bio-based fuel and not the other products generated off the land.

While I recognize that photovoltaics convert sunlight to energy more efficiently than plants, they do not make food too. When soybeans are crushed, only about 20% becomes oil, while the remaining 80% - rich in protein and fiber - feeds people and animals.

Clean fuels are essential to America's farm and food security.

If an acre of soybeans produces roughly 50 bushels, it yields about 570 pounds of oil and 2,350 pounds of high-protein meal. That's enough for 50 gallons of renewable diesel, two years of vegetable oil for one person's diet, and feed for 800 pounds of chicken - enough to feed ten people for a year. Even during the renewable diesel boom, a 20% increase in soybean oil use for fuel raised U.S. 'food at home' prices by just 0.05%, according to Purdue University.

The Real Challenge Is Stewardship, Not Supply

The notion that U.S. farmers shouldn't earn more because higher prices could indirectly cause deforestation abroad was the steady drumbeat of the presenters. They appeared less interested in how the LCFS should realistically manage that LUC risk and more intent on opposing crop-based fuels altogether, despite the urgent need to address the very real and present adverse effect of climate change. But they, and I fear the audience, might miss the point. Deforestation is a governance problem, not a farm revenue problem. Higher farm income supports better land management, conservation and investment in sustainability. The key is to ensure that increased demand for biodiesel and renewable diesel drives intensification, not expansion, which can only happen through good land use governance. It seemed from the Public Forum that CARB has an interest in working with Brazil to further develop their crop-based fuels. Why not look to their more proximate neighbors - America's farmers who operate under rigorous land use regulations and have consistently demonstrated their ability to produce more with less, which is the very goal of sustainable development? Clean fuels provide a complementary market for crop oil, smoothing agricultural revenue cycles and empowering reinvestment in productivity to generate food, fiber and fuel.

Lessons from Palm Expansion

Palm oil is often cited as a cautionary tale. Early EU renewable fuel mandates may have led to peatland destruction in Southeast Asia, but subsequent policy corrections have reversed that trend. The lesson is clear: direct land use change can be managed when governance and accountability improve. The answer isn't to abandon crop-based fuels but to apply lessons learned to every commodity system. Soy is not inherently bad for the environment. It helps with crop diversity and fixing nitrogen in the soil to reduce future fertilizer requirements. The problem is the loss of important, natural ecosystems to new development.

Policy Should Reward the Leaders, Not Punish Them

Global initiatives recognize the importance of traceable, deforestation-free supply chains. The EU Deforestation Regulation and Science-Based Targets initiative both restrict sourcing from land converted after 2020. By contrast, U.S. and California biofuels programs already require crop feedstocks to come from land cultivated before 2008 - twelve years earlier - which means that all domestic feedstocks come from legacy acreage that has been in production for at least the last seventeen years. If everyone else followed those same rules, there would be no ILUC value to assign to any crop-based fuels; all supply chains would be cleaned up; and the blame could no longer be misplaced. As it stands now, however, under the LCFS, U.S. feedstock producers are being penalized for tropical deforestation, even though their operations and supply chains are thousands of miles away.

While the LCFS is nestled at the nexus of climate, fuel, agricultural, land use and economic policy, CARB cannot realistically believe that it is responsible for resolving all the concerns each of these issues spearheads individually. It can, however, incentivize better outcomes by using its unique position at the center of all these policy topics to improve environmental outcomes of those it regulates, whether that's through better assigning LUC risk based on sourcing region or rewarding the benefits of intermediate oilseed feedstocks broadly and the practices of individuals farmers more specifically.

A Balanced Way Forward

If agriculture is, as Michael Grunwald has recently put it, 'the single biggest threat to the planet,' then it must also be the single biggest opportunity for climate progress. While he might not see the connection between well designed biofuels policy, investment in agriculture, and better environmental outcomes, we do. We can't decarbonize without agriculture.

Clean fuels already provide a proven, scalable pathway to lower emissions while supporting farmers, energy security and economic resilience. The next step is refining our policies to better reflect risk and reward - mitigating the genuine risks of land use change without undermining one of the most cost-effective climate solutions readily available now when we need it most. Clean Fuels will continue working toward a risk-based approach that rewards stewardship, transparency and continuous improvement across our supply chains. We look forward to working with anyone who is also so bold.

ABOUT CLEAN FUELS ALLIANCE AMERICA

Made from an increasingly diverse mix of resources such as recycled cooking oil, soybean oil, and animal fats, the clean fuels industry is a proven, integral part of America's clean energy future. Clean Fuels Alliance America is the U.S. trade association representing the entire biodiesel, renewable diesel and sustainable aviation fuel supply chain, including producers, feedstock suppliers and fuel distributors. Clean Fuels receives funding from a broad mix of private companies and associations, including the United Soybean Board and state checkoff organizations.

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