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January 26, 2018

RE: International Council on Clean Transportation comments on “Proposed Rule; Renewable

Fuel Standard Program; Grain Sorghum Oil Pathway" (EPA–HQ–OAR–2017–0655; FRL–9972–
59–OAR])

These comments are submitted by the International Council on Clean Transportation (ICCT).
The ICCT is an independent nonprofit organization founded to provide unbiased research and
technical analysis to environmental regulators. Our mission is to improve the environmental
performance and energy efficiency of road, marine, and air transportation, in order to benefit
public health and mitigate climate change. We promote best practices and comprehensive
solutions to increase vehicle efficiency, increase the sustainability of alternative fuels, reduce
pollution from the in-use fleet, and curtail emissions of local air pollutants and greenhouse
gases (GHG) from international goods movement.

The ICCT welcomes the opportunity to provide comments on the U.S. EPA Renewable Fuel
Standard (RFS) program. We commend the agency for its continuing efforts to promote a
cleaner, lower-carbon transportation sector that uses less petroleum-based fuels. As we have
commented before, the RFS program has set strong standards with thorough, comprehensive
scientific analyses and rigorous life-cycle emission accounting. This proposed rule builds upon
the impressive steps EPA has undertaken to promote low-carbon biofuels. The comments
below offer a number of technical observations and recommendations for EPA to consider in its
continued efforts to strengthen the program and maximize the program’s benefits in mitigating
the risks of climate change and reducing petroleum use.

We would be glad to clarify or elaborate on any points made in the below comments. If there are
any questions, EPA staff can feel free to contact Dr. Stephanie Searle (stephanie@theicct.org).

Stephanie Searle

Fuels Program Lead


International Council on Clean Transportation

 ICCT comments on docket no. EPA–HQ–OAR–2017-0655

ICCT’s comments focus on the greenhouse gas (GHG) implications of displacing distillers
sorghum oil from livestock feed. In this proposed rule, EPA concludes that extracting sorghum
oil from distillers grains after sorghum ethanol production would not have displacement impacts
on livestock feed. ICCT believes that this conclusion is inconsistent with the data EPA provides
on livestock nutrition, and that EPA should consider the following observations in its final rule on
distillers sorghum oil.
In its proposed rule, EPA recognizes that using distillers sorghum oil for biodiesel production
would result in a reduction in the total mass and energy content of sorghum distillers grains that
is supplied to animal feed:
“Thus, sorghum oil extraction may reduce the total mass of [distillers grains and solubles] DGS
produced by up to approximately 4 percent. If full-oil and reduced-oil DGS have equivalent feed
value on a per pound basis, we would expect a reduction in the total mass of DGS produced to
impact livestock feed markets and result in a net increase in GHG emissions if production of
other feed crops (e.g., corn, soybeans) increased to backfill the lost DGS, given that producing
additional corn and soybeans would result in more GHG emissions.”
This assessment that diverting distillers sorghum oil from livestock feed would result in
additional crop production to supply the same amount of digestible energy to livestock is
consistent with ICCT’s prior research on distillers corn oil.1 However, EPA then proposes not to
calculate or include any such displacement emissions because the oil reduction in sorghum
DGS may improve its digestibility for dairy cattle:
“However, if reduced-oil DGS are more beneficial than full oil DGS for dairy cows, on a per
pound of DGS basis, that could offset some or all of the impacts associated with the DGS mass
reduction. Therefore, we do not expect that sorghum oil extraction will have a significant impact
on the feed value of DGS and thus will have no significant indirect GHG impacts per pound of
DGS.”
This conclusion is not adequately justified for the following points, which are elaborated further
below:
• According to data EPA presents in an accompanying memorandum,2 the increase in per-
kg digestible energy content in reduced-oil sorghum DGS for dairy cattle does not fully
offset the reduction in total energy content of the DGS;
• EPA states: “We anticipate that sorghum oil producers will seek to sell reduced-oil DGS
to poultry, swine, and dairy cow producers, as these markets allow them to obtain a
higher value for their product.” EPA thus expects that a significant amount of reduced-oil
DGS will be supplied to poultry and swine producers. According to EPA’s accompanying
memorandum, reduced-oil DGS has lower metabolizable energy per kg DGS for swine

https://www.theicct.org/sites/default/files/publications/ICF_LCFS_Biofuel_Categorization_Final_Report_0
11816-1.pdf and https://www.theicct.org/sites/default/files/publications/Waste-not-want-not_Cerulogy-
Consultant-Report_August2017_vF.pdf
2 ‘‘Summary of Net Energy Impacts of Reduced-Oil Sorghum Dried Distillers Grains with Solubles (DDGS)

on Livestock,’’ Air Docket EPA–HQ–OAR–2017–0655.

 ICCT comments on docket no. EPA–HQ–OAR–2017-0655

and poultry. Supplying this product to swine and poultry will thus exacerbate the energy
loss of reduced-oil DGS;
• EPA does not provide any data or analysis supporting its assumption that reduced-oil
DGS will be preferentially or entirely supplied to dairy cattle.
The statement that improved feed efficiency for dairy cattle “could offset some or all of the
impacts” is contradicted by the data EPA has presented. The data in EPA’s accompanying
memorandum on livestock feed efficiency shows that reduced-oil corn DGS is 1% more efficient
in terms of the metabolizable energy per kg DGS. However, this data reflects the removal of 2-
6% of the total mass of DGS with oil extraction. Similarly, EPA writes that “sorghum oil
extraction may reduce the total mass of DGS produced by up to approximately 4 percent.” If we
assume that the average mass reduction of DGS from oil extraction is 4 percent, then in a best-
case scenario where 100% of reduced-oil sorghum DGS is supplied to dairy cattle, the feed
efficiency benefit would only offset one-quarter of the mass loss of oil extraction. Thus, the feed
efficiency benefit for dairy cattle could reduce the displacement emissions of sorghum oil
extraction by only one-quarter. This is not a clear basis upon which to conclude that these
displacement emissions are likely wholly offset.
Furthermore, the proposal text suggests that EPA does not believe that 100% of reduced-oil
sorghum DGS will be supplied to dairy cattle, as EPA lists swine and poultry as likely markets
for this commodity. The data in EPA’s accompanying memorandum shows that reduced-oil
sorghum DGS has 14% and 6% lower feed efficiencies for swine and poultry, respectively. EPA
notes that “full-oil distillers grains with solubles (DGS) typically contain higher levels of free fatty
acids and thus may have a negative impact on the fat digestion of poultry and swine.” However,
these impacts should be implicitly included in the data EPA provides on metabolizable energy of
full- and reduced-oil sorghum DGS in swine and poultry. The lower feed efficiency of reduced-oil
sorghum DGS in swine and poultry exacerbates the displacement problem: when oil is extracted
from sorghum DGS, fewer kilograms of DGS are provided to these livestock, and the animals
receive less nutritional value per kilogram of DGS they receive.
EPA argues that reduced-oil DGS is unlikely to be provided to beef cattle due to its 9% lower
feed efficiency (averaging EPA’s data on growing and finishing beef cattle), but beef cattle
account for 54% of all DGS consumption by livestock in the US.3 Whether farmers of beef cattle,
swine, and poultry will switch from sorghum DGS to other feed ingredients if sorghum DGS is
de-fatted is not a simple question. Farmers currently providing sorghum DGS in livestock likely
do so because it is less expensive or logistically easier to do so compared to other ingredients.
It is reasonable to assume they will switch to other ingredients (such as increased blending of
corn grain and soy meal) if the local price differential between those ingredients and sorghum
DGS is smaller than the feed efficiency loss of de-fatted sorghum compared to full-fat sorghum.
This full price comparison, accounting for the price of sorghum DGS substitutes, is necessary to
understand what proportion of beef, swine, and poultry farmers are likely to stop purchasing de-
fatted sorghum DGS. Similarly, an increase in the usage of de-fatted sorghum DGS in dairy
cattle will only occur if this option becomes a less expensive method of providing the same
metabolizable energy compared to other local feed ingredients. Increasing the usage of de-
fatted sorghum DGS in dairy cattle may involve greater transport distances compared to the

3Using the medium 2016-2017 projection from

https://www.regulations.gov/contentStreamer?documentId=EPA-HQ-OAR-2017-0655-
0006&contentType=pdf
 ICCT comments on docket no. EPA–HQ–OAR–2017-0655

current distribution of sorghum DGS, and the associated cost may reduce the attractiveness of
de-fatted sorghum DGS to more distant dairy farmers. Without conducting this kind of price
comparison analysis, the most conservative assumption to make about the distribution of de-
fatted sorghum DGS consumption is that it will reflect the current distribution of total DGS.
Regardless of whether reduced-oil DGS are likely to be fed to dairy cattle, beef cattle, poultry, or
swine, it is clear that a lower total amount of metabolizable energy will be delivered to livestock
if sorghum oil is extracted from DGS compared to if it is not. The gap in metabolizable energy
must be supplied by additional production of crops. EPA suggests that the additional crops that
would be produced would be corn and soymeal. However, it is not clear why soymeal would
replace sorghum oil in livestock feed, since extracting sorghum oil does not remove protein.
Since reduced-oil DGS has a better feed efficiency than full-oil DGS with dairy cattle, it is clear
that fat content does not have any particularly beneficial nutritional value, and the lost calories
with removing sorghum oil from DGS would likely be replaced with the cheapest form of
calories, which is likely corn. On the other hand, reduced-oil DGS has a worse feed efficiency
than full-oil DGS with beef cattle, poultry, and swine than would be expected based on the loss
of fat alone. Since fat has more calories per gram than carbohydrates and protein, removing
sorghum oil reduces the energy content per kg DGS, before considering metabolic effects in
livestock. Since the feed efficiency loss of reduced-oil DGS in these other types of livestock is
fairly high (ranging from 6-14%), it seems likely that fat serves a greater nutritional purpose than
simply providing calories in these animals. Therefore, it seems likely that livestock farmers
would replace sorghum oil with other types of oil, rather than with corn or soymeal. The marginal
source of oil in the U.S. is likely either palm oil or soybean oil. Our research has found that
soybean production is inelastic to soy oil price, meaning that increasing the demand for
vegetable oils in the U.S. is unlikely to result in increased soy production. The same analysis
found that palm oil supply is strongly elastic to soy oil price, meaning that increasing the
demand for vegetable oils in the U.S. results in an increase in palm oil imports.4 An increase in
vegetable oil demand in general may thus be met with an increase in palm oil supply. On the
other hand, farmers may find it less expensive or more convenient to directly supplement the oil
content of feed by substituting some amount of soy meal with whole soy beans (containing both
soy meal and soy oil). Increasing demand for soy oil would likely indirectly lead to increased
palm oil imports for the same reason as above.
To illustrate these effects, we estimate the full displacement impacts of extraction sorghum oil
from distillers grains. There are several methodological decisions in estimating displacement
impacts that affect the final result, and so we consider a number of scenarios with varying
assumptions:
• Scenario 1: Assuming that reduced-oil sorghum DGS is provided to livestock types in the
same proportions as total DGS nationally.5 This is a conservative assumption. This
scenario assumes that for swine, poultry, and beef cattle, sorghum oil would be replaced
by palm oil. In all scenarios, sorghum oil is replaced by corn grain for dairy cattle.

4 https://www.theicct.org/sites/default/files/publications/Cross-price-elasticities-for-oils-fats-US-
EU_ICCT_consultant-report_06032017.pdf
5 Using the medium 2016-2017 projection from

https://www.regulations.gov/contentStreamer?documentId=EPA-HQ-OAR-2017-0655-
0006&contentType=pdf
 ICCT comments on docket no. EPA–HQ–OAR–2017-0655

• Scenario 2: The same as Scenario 1, but assuming sorghum oil in swine, poultry, and
beef cattle diets would be replaced by corn grain.
• Scenario 3: The same as Scenario 1, but assuming sorghum oil in swine, poultry, and
beef cattle diets would be replaced by soy oil.
• Scenario 4: Assuming that reduced-oil sorghum DGS is provided to livestock types in the
same proportions as total DGS nationally, but excluding beef cattle. This assumption
reflects EPA’s stated expectation that “sorghum oil producers will seek to sell reduced-oil
DGS to poultry, swine, and dairy cow producers.” This scenario thus best reflects EPA’s
expectations. Sorghum oil is replaced by soy oil in this scenario.
• Scenario 5: Assuming that reduced-oil sorghum DGS is provided only to dairy cattle.
This is a best-case scenario that minimizes the displacement impacts and indirect
emissions of distillers sorghum oil extraction.
In the table below, we calculate the displacement impacts in each of these scenarios and
compare these scenario results to EPA’s conclusion of zero displacement emissions. After
identifying the distribution of reduced-oil sorghum DGS consumption by livestock type and the
replacement materials, as described above, we estimate substitution ratios. These substitution
ratios represent the quantity of replacement material (corn, palm oil, or soy oil) in kg that would
be required per kg of sorghum oil that is removed from the DGS. We assumed that the same
amount of palm or soy oil in kg would be required to replace each kg of sorghum oil that is
extracted, since these materials are fairly similar and would likely be metabolized fairly similarly
in livestock. When assuming corn replaces sorghum oil, we calculated each substitution ratio as
the ratio of the loss of metabolizable energy divided by the proportion of full-fat DGS mass that
is removed with oil extraction. For this step, we assumed the average fat removal rate in
reduced-oil DDGS reflected in the data in EPA’s livestock nutrition memorandum was 4% (the
notes in this memorandum describe full-fat DDGS as having 6-9% oil content and de-fatted
DDGS has having “less than 4%” oil content). This represents the metabolizable energy loss for
the sorghum oil fraction specifically, represented in terms of kilograms DGS that would be
needed to replace it. Here, we assume that corn grain has the same metabolizable energy
content as DGS, which is a rough approximation but not entirely accurate. We note that the corn
and soy displacement ratios in Table IV.2 in the proposal appear to contain errors, so we did not
utilize this data. We then calculate the production emissions for producing the additional corn
and palm oil as the sum of domestic and international changes in agricultural and land use
emissions from EPA’s rulemakings.6 We estimate total displacement emissions in each scenario
as the weighted average by livestock type of the product of the substitution ratios and substitute
material production emissions. We combine this with direct emissions for sorghum oil biodiesel
from EPA’s proposed rule to calculate total emissions. We then compare this with the 50% GHG
reduction threshold for the advanced biomass-based diesel (BBD) category to determine
whether sorghum oil would qualify as advanced BBD in the RFS program. The results would be
similar for the other fuel pathways (e.g. renewable diesel, jet fuel) considered in this proposal.

6 EPA (2010) Regulation of Fuels and Fuel Additives: Changes to Renewable Fuel Standard Program;
Final Rule (https://www.gpo.gov/fdsys/pkg/FR-2010-03-26/pdf/2010-3851.pdf); and EPA (2012) Notice of
Data Availability Concerning Renewable Fuels Produced From Palm Oil Under the RFS Program
(https://www.gpo.gov/fdsys/pkg/FR-2012-01-27/pdf/2012-1784.pdf)
 ICCT comments on docket no. EPA–HQ–OAR–2017-0655

Table 1: Estimation of displacement emissions for distillers sorghum oil biodiesel, in

various scenarios

Scenario
Scenario Scenario 3:
1: National 2: National National Scenario
average average average 4: EPA's
DGS DGS DGS described
consump- consump- consump- scenario: Scenario
tion by tion by tion by excluding 5: Dairy EPA's
livestock, livestock, livestock, beef cattle concl-
palm oil corn soy oil cattle only usion

Dairy 34% 34% 34% 73% 100% 100%

Swine 7% 7% 7% 16% 0% 0%

Share of Poultry 5% 5% 5% 11% 0% 0%

displacement by
livestock type Beef 54% 54% 54% 0% 0% 0%

Dairy corn corn corn corn corn

Swine palm oil corn soy oil soy oil

Poultry palm oil corn soy oil soy oil

Replacement
material Beef palm oil corn soy oil

Dairy 0.69 0.69 0.69 0.69 0.69 0.00

Swine 1.00 5.61 1.00 1.00

Substitution ratios
(kg substitute
added per kg Poultry 1.00 3.10 1.00 1.00
sorghum oil
removed) Beef 1.00 4.12 1.00

Corn 46 46 46 46 46

Production
emissions of Palm
substitute oil 51
materials
(kgCO2e/mmBTU) Soy oil 25 25
 ICCT comments on docket no. EPA–HQ–OAR–2017-0655

Total
displacement
emissions
(kgCO2e/mmBTU) 46 115 28 33 35 0

Direct emissions
(kgCO2e/mmBTU) 17 17 17 17 17 17

Total emissions
(kgCO2e/mmBTU) 63 132 45 50 52 17

GHG reduction
compared to
fossil diesel 35% -36% 53% 49% 46% 82%

Qualify as
advanced BBD No No Yes No No Yes

Our analysis finds that in all scenarios, ranging from pessimistic to optimistic, the displacement
emissions of using distillers sorghum oil for biofuel production are significant and substantially
change our understanding of the total GHG performance of this pathway. We also present these
findings in the graph below. We note that our analysis could be refined with data for two
parameters: the ratio of metabolizable energy of corn to that of DGS by livestock type (or the
ratio of metabolizable energy of corn to that of sorghum oil) and the exact rate of oil extraction
reflected in EPA’s data on metabolizable energy by livestock. Improved data inputs for these
two parameters could change our results slightly, but it is still highly likely that displacement
emissions will be significant in all cases.

140
Lifecycle GHG emissions (kgCO2e/mmBTU)

120

100

80

60

40

20

0
National average National average National average EPA's described Dairy cattle only EPA's
DGS DGS DGS scenario: conclusion
consumption by consumption by consumption by excluding beef
livestock, palm livestock, corn livestock, soy oil cattle
oil

Dire ct emissions Agricultural and land use change emissions

50% GHG savings threshold
 ICCT comments on docket no. EPA–HQ–OAR–2017-0655

Figure 1: Lifecycle GHG emissions of distillers sorghum oil biodiesel, in various

scenarios
Based on these results, ICCT does not believe EPA’s conclusion that “we do not expect that
sorghum oil extraction will have a significant impact on the feed value of DGS and thus will have
no significant indirect GHG impacts per pound of DGS” is adequately supported by the available
data. EPA should consider including displacement emissions for distillers sorghum oil biofuel in
its final rulemaking on this pathway.