Corn-based ethanol may not impact the price of food as much as thought, but a controversial decision in California questions its ability to curb greenhouse gas emissions from transportation.

A new report entitled “The Impact of Ethanol Use on Food Prices and Greenhouse-Gas Emissions” concluded that increased use of the fuel did not contribute as much as expected to last year's rise in corn prices.

From April 2007 to April 2008 ethanol impacted rising food costs to a smaller degree than had previously been anticipated. According to the Congressional Budget Office report, the increased use of ethanol accounted for about 10 percent to 15 percent of the rise in food prices.

Studies have found that the current use of ethanol reduces greenhouse-gas emissions versus gasoline; but gauging its emissions depends on changes in land use that might offset the potential reduction of ethanol use.

On Thursday the California Air Resource Board voted to enact a Low Carbon Fuel Standard, which aims to lower the carbon intensity of fuels sold in the state by 10 percent by 2020.

CARB will incorporate an estimation of the carbon footprint of land use and other indirect effects of all transportation fuels. Based on CARB's studies to date, corn-based ethanol "may not substantially reduce greenhouse gas emissions when compared to petroleum."

The board has requested input from outside expert groups on the impact of land use and expects to complete a study by the end of 2009. Depending on the results of the study, corn-based ethanol may not provide the GHG reductions necessary to qualify corn-based ethanol/gasoline blends as low carbon fuels.

The ethanol industry disputes the methodology used to estimate carbon intensity, and touts another study from Air Improvement Resource (AIR) which concludes that calculating land use would not impact greenhouse gas emissions.

A 2009 CARB study estimates that sugar cane ethanol from Brazil has a much lower carbon footprint than gasoline or corn based ethanol, but the high U.S. tariff on ethanol imports has kept the product out of the market.

Ethanol production grew from less than three billion gallons in 2003 to more than nine billion in 2008. The report also forecasted that corn-ethanol use will continue to grow over the next decade, however at a slower pace, and expects corn based ethanol will exceed nine percent of annual American gas consumption by 2020.

Additionally, it is expected that changing dietary concerns about human weight gain and food preferences will limit any increases in the use corn of produce High Fructose Corn Syrup, glucose and dextrose. Potentially this would enable the corn market to accommodate growing corn-ethanol needs.

Higher energy costs were in fact the compounding force in rising food prices, according to the report, as significantly higher capital was required to maintain farm inputs, transportation and food processing.

Studies have found that the current use of ethanol reduces greenhouse-gas emissions versus gasoline; but as ethanol production increases, properly gauging its emissions depends on changes in land use that might offset the potential reduction of ethanol use.

Corn-ethanol, unlike the developing cellulosic ethanol processing, does not make use of agricultural waste, which has a land use impact. Ethanol has also been cited as having its impact on emissions diluted by its energy-demanding production.

Another regulatory action that will impact corn-ethanol is the Renewable Fuel Standard, proposed in 2007, which calls for 36 billion gallons of biofuels blended per year by 2022. The EPA will be taking into consideration indirect land use factors; which is strongly opposed by the American Soybean Association. The ASA continues to pressure the EPA against taking these “premature calculations resulting from indirect land use assumptions and factors that are significantly flawed” into the Proposed Rule.

Supporters of biofuel are skeptical about the decisions that will be made by the EPA and the State of California. Though the recent CBO report appears to be leaning towards ethanol support, possibly reflecting findings at the Argonne National Laboratory that when compared with gasoline, corn-ethanol amounts to a 20% reduction in lifecycle greenhouse-gas emissions. Corn-ethanol, although cleaner than gasoline, should perhaps be considered more of a stepping-stone as it still requires a non-waste product, making it less sustainable.

John Gartner contributed to this article.