Abstract
Introduction
Climate change is one of the greatest public policy challenges facing this generation. The rapid accumulation of anthropogenic carbon dioxide in the atmosphere is already altering natural climate 1 and biological systems, resulting in abnormally destructive wildfires, storms, rainfall patterns and the spread of infectious disease. It is increasingly clear that the historical, fossil fuel-based models of carbon, energy and material cycling through the economy are incompatible with maintaining a hospitable environment. Humanity will need to bring every tool it has to bear on this critical challenge. New approaches are required at almost every level of the economy. Biotechnology has the potential to be a transformative asset in this struggle.
Biotechnology is technology based on biology. As the nation heals from the pandemic and governments turn to addressing climate change and lowering the carbon footprint of our economy, we must embrace biotechnology, says Sarah Gallo, Acting Senior Advisor for Agriculture and Environment Policy, Biotechnology Innovation Organization (BIO). This report illustrates the significant role biofuels, biobased manufacturing, and agriculture can play in creating a sustainable future. Moreover, this report underlines the need to embrace new technologies across sectors to truly lower emissions. Climate change is one of the greatest challenges our generation faces, but by embracing biotechnology we can turn this challenge into an opportunity to grow the bioeconomy. Biotechnology applications touch most aspects of modern life, from agriculture to manufacturing to medicine. In the context of climate change, biotechnology offers solutions in four key categories: producing sustainable biomass feedstock, empowering sustainable production, developing lower carbon products, and enhancing carbon sequestration.
Biotechnology offers vital contributions to near-term greenhouse gas (GHG) reductions and revolutionary tools to combat climate change in the longer term. Policies supporting the development and deployment of biotech climate solutions should be part of any government effort to address climate change. This report reviews the current contributions of biotechnology to greenhouse gas (GHG) reductions and identifies the emerging biotech solutions with the greatest potential to avert, and reverse, catastrophic climate change. We focus on four main areas:
Producing sustainable biomass feedstock
For most of human existence, our lives were based on the products of renewable biomass—plants and other living material. In the past 150 years, much of our economy has come to depend on petroleum and other non-renewable resources. The environmental consequences of this transition from renewable resources to non-renewable resources are well documented. 2 Biotechnology has developed more sustainable, biobased alternatives for many products, including fuels, polymers, and other chemicals. The U.S. consumed over 7.5 billion barrels of petroleum in 2019, 3 some of which was turned into plastic; as much as 35 million tons of plastic ended up in waste streams annually in recent years. 3,4 More sustainable options have been developed over recent decades, but ultimately they still require a material input. Biobased alternatives offer the potential for significantly reduced carbon footprints and environmental benefits compared to the traditional systems they displace, and these reliable and cost-effective alternatives depend on broad availability of sustainable biomass feedstock. At present, there are concerns that not enough biomass will be sustainably available to meet growing demand. Biotechnology is rapidly reducing the carbon footprint of feedstock production by enabling new, sustainable ways to produce usable biomass, improving yields on existing crops, developing scalable, low-input production systems, and finding new ways to utilize biomass that would otherwise be waste.
Empowering sustainable production
Manufacturing is a major greenhouse gas emitter, from industrial boilers, chemical production, and the release of high warming-potential gases like methane or fluorinated hydrocarbons. Biotech empowers a variety of options to reduce emissions from these processes, by reducing the need for energy inputs, facilitating more efficient material processing, or replacing high-warming-potential gases. Biotechnology has also enabled renewable natural gas systems that can displace the fossil-based methane today, simply by switching the source of the gas. The U.S. manufacturing sector is responsible for 22% of total GHG emissions, 5 and while no single technology or solution can single-handedly solve the problem, biotech enables opportunities for lower-emission production across many sectors.
Developing lower-carbon products
As awareness of the climate crisis expands, consumers are increasingly demanding lower-carbon options and more sustainable replacements for existing products. 6 This means finding low-emission alternatives that provide the same level of performance, durability and cost-effectiveness as mature fossil-based systems. Biotechnology allows for the production of low-carbon consumer products through the substitution of biomass or other recycled carbon feedstocks and by enabling more efficient, biologically based production, satisfying an increasingly important market segment while reducing emissions at the same time.
Enhancing carbon sequestration
While there is a lot of uncertainty about what a sustainable future may look like, several features are common across all likely scenarios. One of these is the deployment of massive amounts of carbon capture and sequestration (CCS), which converts carbon to a form that does not contribute to climate change or stores it underground. CCS cannot be the sole or even the primary solution to climate change, but it will make a critical contribution. Biotechnology has a key role in advancing CCS techniques, making it more scalable, reliable, and cost-effective.
Climate Impact Analysis
Issues in LCA for Biotechnology
Successfully mitigating the impacts of climate change will involve simultaneous transformational shifts across technology, policy and business. Effectively planning, managing and evaluating these shifts will require an equally profound shift in how we track and account for carbon. Life Cycle Analysis (LCA) is widely regarded as the most appropriate and effective way of evaluating the carbon impacts of products and processes in the complex, modern economy. LCA is an analytical technique in which all inputs, outputs and impacts of a product or process are tracked and accounted for through its full life cycle. This includes the materials used to make things, the energy and associated emissions from transporting and processing them, and what happens at the end of a product's useful life. LCA is especially important and complex when biological systems are involved, since they introduce a significant degree of uncertainty; external conditions, pathogens, or changes in surrounding ecosystems can all impact the productivity of any organism.
There are three main approaches to LCA: attributional LCA, consequential LCA and economic input-output (EIO) LCA. Attributional LCA focuses on the direct actions taken by a producer in order to make a product; all of the energy or materials consumed during production would be captured by an attributional LCA, for example. Consequential LCA, in contrast, focuses on comparing the world with the product in question to a hypothetical world without it; it not only captures all the materials used in production, but also how the product and its supply chains affect markets or other products.
EIO LCA uses the flow of money through systems to estimate environmental impacts. For example, an EIO-LCA may use the average carbon emissions per dollar of revenue in the petrochemical industry to estimate the impacts of petrochemical inputs to other products. The accuracy of EIO LCA suffers because its impact-per-dollar estimates are, by necessity, industry averages or abstract estimates. It is best used for high level, market-wide estimates rather than evaluating individual products or services.
Attributional LCA is simpler than consequential, especially for most manufacturing processes, but consequential LCA is widely viewed as a more accurate technique because it can account for indirect effects, such as those that occur because of changes in commodity prices or disrupted supply chains. Attributional LCA would overlook the impact of new strains of crop on agricultural markets, for example, whereas consequential approaches may be able to account for these.
The science of LCA has rapidly evolved over recent decades; however, a number of critical challenges remain pertaining to LCA in biotech:
Lack of data on critical inputs or processes
Like most modeling techniques, the results of an LCA are only as good as the input data. In many cases, critical elements needed to understand the impacts of a product or process are unavailable, due to insufficient fundamental research, protections on proprietary information, or changes in technology. One common example is that many biotechnological manufacturing systems use enzymes or catalysts. Data on the energy or materials used to make these inputs is typically considered proprietary business information, which renders many LCAs on biotech products uncertain, at best. In other instances, the only source of data on an industrial practice is extrapolated from textbooks or older research on the subject, often overlooking recent technological developments in the field.
Inadequate tracking of existing markets or systems
Consequential LCA's value derives largely from its ability to assess indirect effects. A common example of an indirect effect is Indirect Land Use Change (ILUC), which occurs when a system uses an agricultural product as its input, such as a biofuel made from soybean oil. While the biofuel itself may release little carbon during its production or use, the gallons of soybean oil which went into the biofuel would have otherwise been consumed elsewhere, such as in food products, animal feed or cosmetics. Those previous consumers must now find alternative sources of vegetable oil on the open market, driving up prices, which may result in clearing land to grow more oilseed crops. This land clearance is ILUC, the acres being cleared may not be used to produce biofuel, but they are cleared because of biofuel. Consequential LCA often requires tracking markets, land use, or behavior over a long period of time in order to establish “normal” behavior in that system; at present these data are often not collected, or are proprietary.
Multiple LCA methods
LCA is at its heart a scientific exercise, but parts of it require subjective judgment, like decisions about how to define system boundaries or allocate impacts between multiple products. There may be multiple valid answers to these judgment questions. For example, in the U.S. almost all ethanol production takes in corn and produces ethanol as well as the solids left behind after processing, which are typically sold as a high-protein animal feed known as “distiller's grains”. The question for LCA practitioners is how much of the energy used in the process is assigned to the ethanol product vs. the distiller's grains. There are several methods for doing this, such as assigning based on the relative mass, energy content or monetary value of each product, but there is no objectively right or wrong answer about which method should be selected; it's a judgment call. When true objectivity may be impossible to attain, consensus can be a reasonable substitute. Government, industry and academic stakeholders can mutually agree on answers to questions like this to ensure that at the very least, LCAs can be made on the basis of similar assumptions, so that they can be effectively compared against each other.
Ultimately, the analytical tools which support LCA will need to evolve in parallel with the biotech industry as it rises to meet the challenge of climate change. Industry groups can help support the continued development of LCA data by supporting basic research, agreeing to make more data on inputs and outputs from manufacturing available to researchers, and continuing to support and publish LCA studies of their products. Luckily, LCA shares a common characteristic of many sciences: as knowledge accumulates, future studies become easier and more powerful. Groups of companies that use similar processes to make a common product can aggregate their data together to publish industry averages for energy or materials use, thereby protecting their proprietary business information while improving analysts' ability to research. LCA data developed for one study is often used in subsequent ones; students who study real-world examples emerge better prepared to contribute in real-world work; and as more studies are published and critiqued, consensus emerges. While successfully mitigating climate change will require significant new investments in cleaner technologies and production systems, complementary investments must occur in evaluation and analysis of these systems to ensure that the LCA tools necessary to inform the next decades' decisions evolve as well.
Keys to Maximizing Biotech's Potential to Reduce GHG Emissions
GHG accounting needs to be based on life cycle analysis, and include indirect effects such as ILUC. Industry groups can help by making data available to regulators and researchers; IP can be protected by aggregating or anonymizing the data.
Most biotech solutions will require massive amounts of feedstock, finding ways to produce this more efficiently will always be useful.
Using waste biomass to produce energy can make a real difference, but keeping organic carbon in solid form as long as possible maximizes GHG benefits.
Biofuels may not be zero-carbon, but they can be very low carbon and the scale of transportation means making them sustainable and scalable is critically important.
Carbon capture and sequestration will be necessary for success, but as a complement to reducing emissions, not a replacement.
GHG Mitigation Potential on National Scale: Producing Sustainable Biomass Feedstock
Biomass is one key to decarbonizing the U.S. economy because it leverages the capacity of photosynthesis to remove carbon from the atmosphere and convert it to carbohydrates, which can be utilized for their embodied energy, carbon, or both. In theory, biomass can be a carbon-neutral resource, but in practice the situation is much more complex. Growing biomass, especially at commercial scales, typically requires fertilizer and other inputs which have associated emissions.
Depending on how the land being used for biomass is treated, there may be additional sources, or sinks, of carbon in the soil. Understanding the emissions impacts of biomass across its full life cycle requires understanding the ecosystems, carbon and nutrient cycles at play where it's grown. Given the potential for biomass production to result in significant and unexpected emissions of carbon, a risk-averse approach is prudent, but the immense potential of biofuels, bioenergy and bioproducts argues in favor of utilizing these resources where available. While there is significant uncertainty around the emissions associated with any source of biomass, there are a few useful rules: Biomass can be low-carbon but is almost never zero-carbon. While the carbon embodied in plant matter was taken from the atmosphere, and therefore has a minimal on climate change, there are numerous sources of climate-forcing emissions from fertilizer, irrigation, transport, processing and changes in the soil. Bio-based products can reduce GHG emissions when substituted for high-carbon ones, especially those relying on fossil fuels. GHG reductions are realized when low-carbon biobased products displace higher-carbon ones. Without that displacement, there is minimal environmental benefit. Substitution, by itself, is no guarantee of benefit, a few bio-based products are more carbon-intensive than their fossil equivalents. Alternative uses and indirect effects must be considered. Accurately assessing biomass carbon emissions typically requires considering indirect effects like ILUC, as well as what would have happened in absence of the biomass production. A cultivation system may increase soil carbon, but should only be credited for these increases if this increase is greater than what would have happened otherwise. The labels “waste” and “residue” can be misleading. In theory, wastes or residues have no value, and cause emissions from their use. In truth, many of these materials are used in some fashion, sometimes by sustainable bio-product systems, sometimes more traditionally, as animal bedding or returned to the soil; these uses must be considered.
Climate policy has largely overlooked emissions from agriculture to date, in part because of the complexity of the system and concern about financial impacts on farmers and rural communities. With new focus on sustainable and regenerative agriculture, however, a window of opportunity is opening to achieve a win-win scenario for agricultural producers: utilize the latest science to find opportunities to use agriculture as a tool to reduce emissions, and reward farmers for the carbon benefits they provide.
Agriculture in the U.S. emitted GHGs equivalent to about 658.6 million metric tons of carbon dioxide in 2018, roughly 10% of the U.S. total. 7 About 94% of this was emitted from agricultural soils or livestock (direct or “enteric” emissions from animals as well as manure management). Additional emissions come from the production of ammonia, which is a primary input for most fertilizers. With continued population growth as well as the emergence of the bioeconomy, the agricultural sector will be called upon to produce even more food, fodder, fiber and feedstock. Meeting this challenge while reducing emissions will require the rapid deployment of advanced biotechnology in several critical areas including:
Optimizing fertilizer use through new crop strains or increased nitrogen fixation
Nitrogen is often a limiting factor in agricultural yields. The “Green Revolution,” which massively increased agricultural production and allowed rapid population growth during the 20th Century, was largely facilitated by the development of the Haber Process for producing ammonia from natural gas. Ammonia production supports 50-75% of global fertilizer production and is responsible for more than 1% of global GHG emissions. 8 Removing biomass from fields, whether it's crops for consumption or residues for bioenergy, takes some of that nitrogen along with it, which must be replaced. Biotech can improve plants' efficiency at utilizing nitrogen, or adding genes from nitrogen-fixing organisms to allow them to produce their own. Using modern biotechnological tools to optimize the use of synthetic fertilizers allows growers to consume less of them, which could help U.S. farmers cut back on 15-20 million metric tons of carbon associated with its production, about as much as fueling 3-4 million cars for a year. 9
Reducing nitrous oxide emissions from soil
Nitrogen fertilizers enhance plant growth, but many soil microbes convert fertilizer nitrogen to nitrous oxide (N2O), a greenhouse gas up to 298 times more potent than carbon dioxide. In 2017, nitrous oxide emissions from agricultural soil accounted for 266 million metric tons of carbon dioxide equivalent in the U.S. Relatively low-tech interventions, such as using less volatile fertilizers and applying them more efficiently could reduce nitrous oxide emissions by 30-100 million metric tons annually. 10 Analyses of chemical inhibitors indicate a potential to cut nitrous oxide emissions by over 40%, and there are promising lines of research which would integrate production of these inhibitors into a plant's root system. 11 By combining all of these approaches, nitrous oxide emissions could be reduced, by well over 150 million metric tons of carbon equivalent, or as much as shutting down 32 U.S. coal power plants for a year.
Enhancing soil carbon retention through expanded root growth
Despite its mundane appearance, soil is a complex and dynamic environment, in which carbon and nutrients enter and leave through multiple avenues and cycle through plants, animals, microbes and fungi. There are several promising approaches by which the soil carbon system could be encouraged to retain more carbon in solid form, rather than being decomposed and released to the atmosphere. Root growth is a major pathway for soil carbon accumulation, as plants take carbon from the atmosphere and convert it to solid plant matter, moving it underground as roots grow. Engineering crops to have larger and deeper root systems expands this pathway and could sequester carbon by 200 to 600 million metric tons per year if widely deployed, though this number is highly uncertain due to the relative immaturity of this technology. 12
Reducing methane emissions from livestock
As population and incomes increase globally, so does the consumption of meat and dairy products. This leads to an increase in livestock numbers and the associated emissions. Livestock, especially cattle, are a major source of methane, from enteric sources (i.e., burps) as well as from decomposing manure. Several novel feed additives have been proposed which may be able to reduce the amount of methane emitted without negatively affecting animal health or reducing yields. DSM has announced a cattle feed supplement that claims to reduce methane emissions by 30%, 13 while other compounds under investigation—often derived from red seaweed—may be able to provide 80% reductions or greater in methane emissions. 14,15 While numerous technological and policy hurdles remain, widespread deployment of feed technologies like these could reduce emissions from livestock production by 50-140 million metric tons, or roughly one to three times the annual emissions from the state of Oregon.
GHG Mitigation Potential on National Scale: Empowering Sustainable Production
Modern economies produce a staggering amount of things. From millions of printed silicon microcircuits in electronics to billions of tons of concrete and steel, production of physical objects is a hallmark of human society. As we seek to limit the damage caused by climate change, a new focus on sustainability must enter the conversation about how we make things. Luckily, advances in technology have presented a number of opportunities to do just this, by developing more efficient and lower-emission alternatives to traditional industrial techniques. Biotechnology can continue this process by leveraging the affinity biological processes have for working within a circular economy.
Green is the new black
Traditionally, once materials were extracted, their life was a one-way trip that ended in a landfill. As industries become more aware of the need to reduce emissions, it is becoming clear that reuse and recycling of materials and energy is an essential tool for sustainability. Biotechnology is well-positioned to succeed in a sustainable circular economy because it is built on a foundation of biological carbon cycling. Working with natural systems which have evolved to capture and re-use carbon and nutrients, biotechnology firms can expand these processes to commercial scale, replacing energy- and emission-intensive extractive industries with low-impact circular ones.
Turning carbon into products
U.S. industry emits over 800 million metric tons of carbon per year from the combustion of fossil fuels; at present almost all of this goes into the atmosphere, representing over one-eighth of national emissions. Numerous projects have already sought to demonstrate the feasibility of capturing this carbon and sequestering it underground, or using it for enhanced oil production, but a number of innovative processes are emerging to use the carbon as a raw material for other products, including polymers, carbon fiber, chemicals, nanomaterials or fuels using a variety of methods. Conventional carbon capture systems can typically pull 80-90% of the carbon dioxide out of exhaust from combustion systems, 16 which means that there is a potential resource of hundreds of millions of tons of carbon dioxide which could potentially be used to make new products. The limiting factor will probably be the availability of processes to utilize the carbon and markets for the resulting products. Bioplastics have been one of the first largescale applications of biotechnology for the purpose of improving industrial sustainability. Dozens of alternative biobased polymers have entered the market, demonstrating the capacity to replace fossil carbon in a variety of applications and, in many cases, offering more sustainable recycling or reuse options than traditional equivalents. Around 1% of U.S. GHG emissions come from producing plastics. Switching from fossil-based plastics to corn-based biopolymers could reduce emissions by 0.6 kg—1.4 kg of CO2 per kilogram of plastic. 17 Widely applied, this could reduce emissions from plastic production by about 25%, totaling 16 million metric tons of CO2 per year. Switching from corn to cellulosic feedstocks, like switchgrass, miscanthus, or corn stover could double the emission benefits. 18
Organic waste utilization
Researchers and policy makers are becoming increasingly aware of the need to more efficiently use materials in industry. This is particularly true of organic waste, like food scraps, agricultural residue and un-recyclable wood products, because they not only require fertilizer and other inputs to make those materials, but as they decompose, also emit carbon dioxide or, worse, methane. Anaerobic digestion (AD) is a well-understood technology for converting organic waste into energy, while recovering nutrients that can be returned to the soil. When decomposition happens in the absence of oxygen, microbes convert organic waste into biogas—a mixture of methane, carbon dioxide, water vapor and other trace components. This can be cleaned up to yield Renewable Natural Gas (RNG), which is mostly methane and functionally equivalent to fossil natural gas. AD produces not only this valuable product, but also solid digestate, which is very similar to compost and can be used as a beneficial soil amendment. By capturing the methane which would otherwise have been released into the atmosphere, AD further reduces the GHG footprint of organic waste disposal; in some cases the effect of preventing uncontrolled releases of methane can be so great that the resulting RNG is effectively carbon-negative, when evaluated by LCA. 16 Widespread deployment of RNG systems at landfills, wastewater treatment plants, livestock yards and other organic waste hotspots could displace enough fossil natural gas to offset 40-75 million metric tons of carbon dioxide emissions. Using agricultural residue or wood waste could add another 12-40 million metric tons, though these resources may have other competing uses in a low-carbon economy. 19
Cleaner buildings
There are opportunities to build sustainable, circular material cycles into more than just consumer products. Carbon can be pulled out of the atmosphere and used to make the very buildings, roads, and cities we live in. Wood, long thought of as a traditional building material, is enjoying new attention as a low-carbon solution for future construction. Since wood pulls carbon from the air as it grows, it represents a very stable and durable removal mechanism for atmospheric carbon, which will remain sequestered as long as the wood remains solid. Engineered wood products, including cross-laminated timber, fiber or polymer reinforced products, or wood composites can provide strength and durability previously thought possible only from metal. A recent study of engineered wood products found that they can reduce GHG emissions by 20% when substituted for fabricated metal, 25% for concrete and 50% for iron or steel. Engineered wood has been used to build several multistory demonstration buildings to show that high-rise construction is possible without conventional materials. A five-story wood building stores about 26 lb of carbon per square foot. 20 With over 350 million square feet of multifamily housing constructed in the U.S. in 2019, the potential carbon savings could be substantial. 21 Another opportunity to find uses for carbon dioxide is in cement, which is currently one of the largest sources of greenhouse gas emissions in the world and was responsible for over 40 million tons of emissions in the U.S. 22 Researchers have been investigating alternative formulations of cement, which utilize carbon dioxide during production or absorb it from the air as it cures. By integrating these techniques with renewable energy to power the process, it is possible to end up with carbon-neutral concrete turning some infrastructure projects into net carbon sinks.
Developing Lower-Carbon Products
If humanity is to successfully avoid the worst impacts of climate change, it will have to find lower-carbon substitutes for many of its most important products. No product exemplifies this challenge better than transportation fuel. The ready availability of reliable, high-speed transportation is a foundational element of life in the U.S.; it is the lifeblood of modern supply chains and personal lifestyle. The U.S. is by far the biggest consumer of oil in the world, consuming almost 20 million barrels of crude oil per day, and processing it through more than 130 refineries into a wide range of fuels and petrochemical products, most importantly gasoline and diesel. 23 The emissions from vehicle tailpipes, plus the production and refining of petroleum total over 1,900 million metric tons of carbon dioxide equivalent each year, almost 30% of the U.S. total or about as much as Germany and Japan, combined. 24
Neither the U.S. nor any other nation can halt climate change while depending on petroleum to fuel its transportation system. There is no single solution to this problem, a full portfolio of tools is needed. Light-duty vehicles, like cars, trucks, and SUVs consume the majority of petroleum in the U.S.; there is consensus within the transportation research community that replacing these with battery electric vehicles, charged on a grid dominated by renewables or other carbon-free sources, will by the primary way of reducing these emissions, with mass transit and other measures also playing a role. Many of the medium and heavy duty vehicles, like box trucks, delivery vans and some tractor-trailers will also be powered by electricity from batteries, or possibly hydrogen fuel cells. 25 There are some types of transportation, however, for which energy-dense liquid fuels will be much harder to replace. Aviation is the biggest of these; the U.S. consumed over 18 billion gallons of jet fuel in 2019, 26 and while the industry will take some time to recover from the ravages of COVID-19, commercial air travel will continue to factor in global transportation. Some marine applications, long-haul trucking, military operations, backup and emergency power, and specialized vehicles may also need liquid fuels. The U.S. currently consumes around 15 billion gallons of ethanol per year, and around 2.5 billion gallons of biomass-based diesel substitutes including biodiesel and renewable diesel. The vast majority of ethanol is made from corn, while around ⅔ of U.S. biomass-based diesel is made from soybean or canola oil, with the rest coming from waste oil or byproducts. 27
Most of the biofuels currently used in the U.S. reduce carbon emissions when they displace petroleum fuels. Typical corn ethanol emits about 30% less carbon than gasoline, when the full life cycle of both products are considered, and typical biodiesel or renewable diesel from soybean oil reduces carbon by 40-50% over the full life cycle. 28 With domestic consumption of these fuels measured in the billions of gallons each year, these emission reductions represent millions of tons of avoided carbon. The use of biofuels is estimated to have reduced U.S. transportation sector GHG emissions by 980 MMT CO2 from 2009-2020. 29 This is equivalent to taking roughly 16 million vehicles off the road, or 19 coal-fired power plants offline, for that 13-year period. 30
First-generation biofuels alone cannot meet the challenge of near-complete decarbonization by midcentury, but have achieved critical near-term reductions as other low-carbon transportation solutions are being developed; and they form an important technological foundation for the next generation of low-carbon fuels. The biotech industry can leverage its capacity to innovate to help advance biofuels in two main ways, reducing emissions from current production and developing zero, or near-zero carbon fuels.
Reducing emissions from existing fuels
The U.S. fuel ethanol industry operates around 200 production facilities spread across the U.S., representing tens of billions of dollars in capital investment and thousands of jobs. 31 While corn-based ethanol may struggle to achieve the very low carbon levels needed in the long-term future, it has a critical role to play over the next few decades. As long as there is petroleum-based gasoline being consumed in the world, there will be value in producing a substitute that is 30% less carbon intensive; and the evidence suggests that the industry can reduce emissions even further. Driven in large part by the adoption of carbon intensity standards like California's LCFS, the ethanol industry has improved the efficiency of its facilities and found new ways to recover valuable co-products. Doubling down on these processes can continue to reduce emissions.
Improved efficiency of ethanol production facilities has reduced the energy inputs needed per gallon of output by a few percent per year, 32 and the industry has begun to utilize cellulosic processing technology to convert the previously indigestible corn kernel fiber into ethanol, increasing the yield from each bushel of corn by 3-4%. Improved crop yields and strains optimized for fuel production also help reduce the emissions associated with each unit of fuel. Incremental improvements like these seldom grab headlines, but on the scale of U.S. ethanol production, they add up. Each 1% improvement in average carbon intensity, across the entire U.S. ethanol industry results in around 800,000 metric tons of avoided carbon dioxide emissions each year. 33 Similarly, there are opportunities to improve the efficiency of biodiesel and renewable diesel production, the latter of which anticipates almost a six-fold increase in U.S. production capacity over the next five years. 34 More efficient catalysts and purification systems can reduce the need for energy or reagent inputs, driving GHG emissions down even further. If the U.S. renewable diesel industry grows as anticipated, each 1% improvement in efficiency yields around 170,000 metric tons of avoided emissions each year. 35
Developing zero or near-zero carbon fuels
Decarbonizing transportation will require a new generation of fuels. Cellulosic biofuels, which use inedible plant matter as their feedstock, offer the potential for much deeper reductions in carbon emissions. 36 Cellulosic biofuels have been on the horizon for many years, but technological and supply chain challenges sank several early projects. A new wave of cellulosic production facilities, promising 60-80% lower emissions than conventional fuels are under development and if early projects are successful, could be the start of a new, multi-billion gallon per year industry. One key difference between the first wave of cellulosic production facilities and this one is that rather than breaking down cellulose into sugars and fermenting them into ethanol like you would with starch, these facilities use heat to convert biomass into a gas, or light oils, then process those into finished fuels. There are numerous opportunities to further refine the process, however, by making more selective and durable catalysts, or providing feedstock which improves yields, is more easily handled or requires less pre-treatment.
Algae or other microbes may offer the greatest potential to deliver fuels that approach or achieve carbon neutrality. Algae can be grown using wastewater or even exhaust gas as their primary source of nutrients and can be tailored to produce highly desirable oils or carbohydrates at extremely high theoretical yields. Attempts to scale these systems up have run into problems with pathogens, competition from wild microbes and finding efficient methods to separate desired products from water and cell mass. If algal fuels, or other advanced synthetic fuels could be commercialized, they offer the potential for billions of gallons of a product that is compatible with existing vehicles and infrastructure.
Enhancing Carbon Sequestration
Drastically reducing carbon emissions is necessary if humanity is to avoid the worst effects of climate change, but more will be needed. Almost every model of a successful stabilization of temperatures includes a large amount of carbon dioxide removal from the atmosphere, through enhanced plant growth and CCS.
In IPCC's 5th assessment report regarding global carbon emissions trajectories that preserve a hospitable climate, for every simulation of the future in which average temperature increase is kept below 1.5°C (the graph for a 2°C outcome looks quite similar)net emissions must not only be reduced to zero, but the world will need to rapidly remove carbon from the atmosphere over the second half of this century. 37 Biotech can provide crucial tools to help this effort.
It is difficult to estimate how much of an impact carbon capture might have on the climate system of the future; in some ways the sky is really the limit since there is certainly no shortage of carbon dioxide in the atmosphere to remove. Accelerated R&D and rapid deployment of demonstration projects will be necessary to identify and prove the capabilities of the many technological options which could contribute.
Bioenergy with carbon capture and sequestration (BECCS)
Many of the most promising concepts for scalable carbon sequestration rely on photosynthesis to do the actual capturing of carbon dioxide, which can then be used or stored. One of the most promising is BECCS, which uses the biomass from plants to produce fuels or energy, storing carbon along the way. There are many proposed models for BECCS, from burning biomass in conventional power plants and capturing carbon from the exhaust, to gasification systems which leave behind carbon-dense biochar that can be used as a carbon-sequestering soil amendment. The energy or fuels produced by these systems would also help displace fossil fuels, providing a double climate benefit. A recent analysis estimated that, by 2040, BECCS could cost effectively remove over 700 million metric tons of carbon per year, 38 or more than half the emissions from all U.S. coal power plants, though doing so would require a massive amount of sustainable biomass feedstock to be produced.
Sequestration in natural and working lands
Natural ecosystems have been sequestering carbon for millennia without human assistance and should not be overlooked as a method of removing carbon from the atmosphere. The main mechanism of sequestration is through the growth of roots in the soil, accumulation of fallen organic matter, or the accumulation of organic matter at the bottom of oxygen-poor bodies of water. Most biomass decomposes or is consumed by animals but some, especially the hard-to-digest fibrous parts of plants composed of lignin and cellulose, remains in solid form for decades or more and is integrated into soil. Human encroachment on natural lands and climate change are affecting most natural ecosystems, often disrupting this process; but careful intervention, through things like managed replanting, selective breeding for sequestration potential, soil amendments such as compost or biochar, selective harvest and prescribed fire can increase the rate of carbon sequestration and build healthy, resilient ecosystems. The National Academies concluded that enhanced management of forests could sequester anywhere from a few hundred pounds to over a ton of carbon per hectare annually; 39 widely deployed this could result in sequestration of 100 million metric tons of carbon per year, with an additional 150 million metric tons possible through expanding forested areas, this would be like taking 20 to 50 million cars off the road.
Enhanced weathering
While the majority of carbon removal from the atmosphere is done by plants, it is not the only mechanism. Certain types of mineral like olivine, serpentine and basalt will react with carbon dioxide to form stable carbonate minerals in a process known as “weathering”. This mechanism has been largely responsible for mitigation of high atmospheric CO2 concentrations in prehistoric times. Unfortunately, it is naturally quite slow, suited for geological rather than human time scales; but there are ways that it might be accelerated and scaled to help address the climate crisis. Olivine and serpentine are often found in discarded mine tailings or asbestos formations; basalt can often be found in geologically active areas, where geothermal power plants may be active. By managing air flow, moisture and pH levels in these sites, the rate of carbon uptake could be substantially increased. Adding catalysts, or microbial agents could increase the potential even further.
Direct air capture
Most carbon capture systems rely on natural processes to remove carbon from the atmosphere, but new innovative approaches may offer the opportunity to cut out the intermediate step. Several processes are being tested that use chemical solvents, such as amine or carbonate solutions, to absorb CO2 from the atmosphere, and release it into a containment system, resulting in pure CO2 that can then be sequestered underground or used to make products. Since CO2 is only a few hundred parts per million in the atmosphere, this process requires a lot of surface area and usually uses heat to regenerate the solvent solution. This can make these systems bulky and energy-intensive. By developing more effective and durable solvents, or lower-energy regeneration processes, these systems could be made cheaper and more scalable. The upper limit of potential for these systems depends on how optimistic one is about the rate at which they will improve their energy and cost efficiency. Studies have projected the impact of direct air capture at anywhere from a few hundred million tons to more than half of today's global CO2 emissions. 40
Barriers to Adoption and Policy Proposals
Financing Barriers
Biofuels and bioproducts have historically faced a major commercialization hurdle in the form of access to financing. Biotechnology products that are intended to reduce GHG emissions must necessarily compete with fossil fuels that supply a well-established refining and petrochemicals production infrastructure. Whereas this fossil infrastructure is often decades old and has often been fully paid off by its owners, biotechnology products require investment in either new infrastructure or large-scale retrofits of existing infrastructure. These investments can be very expensive, with one review of announced commercial-scale cellulosic biofuel projects finding capital costs to be approximately $11/gallon of installed production capacity. 41 With the exception of large, established companies, few new producers have ready access to this amount of capital, necessitating that they access the capital markets through lenders and/or investors.
Private sources of capital generally require a demonstration that a biotechnology project can achieve certain levels of profitability in the form of a “hurdle rate” before providing access to financing. Biobased fuels and products compete with fossil fuels and products for market share, and the market value of the former operates as a function of the latter as a result. On occasion this has been advantageous for biotechnology products, such as when fossil fuel prices rose sharply in 2007-08. The steady decline of fossil fuel prices that has occurred over the last decade in response to increased unconventional production of natural gas and petroleum in the U.S. has made it more difficult for biotechnology products to obtain the necessary hurdle rates for financing, however, even as climate change has become an important concern for American consumers. 42 Likewise, the immediate financial incentive to make investments in energy efficiency and other marginal reductions to GHG emissions is limited when energy costs are low.
A challenge faced by biofuels and bioproducts is that many of the advantages that they offer over fossil fuels are not reflected in their market value. For example, in addition to the GHG emissions reductions discussed above, many biotechnology products achieve low levels of other types of pollution such as particulate matter emissions, sulfur emissions, water contamination, and toxic waste production compared to fossil fuels. These reduced impacts on human health and the environment have a clear monetary benefit in the form of reduced spending on medical services, environmental remediation, recovery from extreme weather events, etc. 43 Moreover, biotechnology provides the ability to reduce GHG emissions and other forms of pollution across a variety of economic sectors, including agriculture, manufacturing, and transportation. Such benefits are not reflected in the market value of the biotechnology products, however, placing them at a competitive price disadvantage to fossil fuels.
Governments have sometimes enacted policies that cause the benefits of biofuels and bioproducts to be reflected on the marketplace, either by subsidizing those biotechnology products that have reduced impacts on human health and the environment or by increasing the cost of fossil fuels. Some, such as California's LCFS, have prompted rapid growth in the use of biofuels by subsidizing biofuels, especially those from 2nd-generation feedstocks, based on the degree to which they reduce transportation GHG emissions. 44 The LCFS recently expanded to provide support for CCS; when combined with Federal 45Q tax credits, this can offer over $150/tonne of total incentive for project developers. 45,46
Government incentives in the U.S. have not always been sufficient to make biotechnology products competitive with inexpensive fossil fuels, though: one recent analysis calculated that new cellulosic biorefineries would struggle to be financially viable despite the presence of supporting federal policies because of the low fossil fuel prices that have prevailed since 2014. 47 Producers of biotechnology non-fuel products, for which government support mechanisms are fewer, have also faced high hurdles to private financing.
Some producers of U.S. biofuels and bioproducts have been able to obtain public financing in the form of loans, loan guarantees, and grants from the federal and state governments. The U.S. Department of Agriculture offers loan guarantees of up to $250 million for the building of capacity for the production of specific biotechnology products including advanced biofuels and biobased chemicals. 48 The loan guarantee program was started in 2008 to enable financing of advanced biofuels and was expanded in 2014 to cover other bioproducts as well. The loan guarantee reduces the barriers to obtaining private financing by having the U.S. government backstop qualifying loans to producers. While this backstop does not guarantee private financing for the facility, it substantially reduces the producer's financing hurdle rate by reducing the risk of default on any loan covered by the guarantee. Several states operate their own direct loan and loan guarantee programs for biorefineries, albeit on a smaller scale. 49
Grants are another public finance mechanism that has supported the commercialization of biotechnology. Unlike direct loans and loan guarantees, grants are one-time awards of financing that are not repaid. The awards generally involve smaller amounts of financing than are provided via direct loans and loan guarantees, and they have often been used to support R&D or make improvements to existing facilities rather than to build a new commercial-scale facility. One example is the Value Added Producer Grants program administered by the U.S. Department of Agriculture, which “helps agricultural producers enter into value-added activities related to the processing and marketing of new products. 50
Other grants indirectly support the establishment and commercialization of biofuels by being directed toward the upgrading of infrastructure that is downstream of production facilities and improving consumer access.
The private and public capital that has been invested into biobased fuels and products has spurred the commercialization of low-carbon technologies since the turn of the century. Investments have fallen far short of what is necessary to avert catastrophic climate change, however, reflecting the major hurdles to financing that still exist within the biotechnology industry. The IPCC estimates that $2.4 trillion in annual investment is needed globally in the energy sector alone until 2035 to limit temperatures to no more than 1.5°C above pre-industrial levels. 51 This number is larger still if the decarbonization of non-energy sectors such as agriculture and materials are accounted for. Actual global low-carbon energy investment in 2019 was only $0.6 trillion, or 25% of what is needed. 52 Additional policy mechanisms will be required to rapidly reduce existing hurdles to the financing of biobased projects. Governments will also need to reduce the regulatory barriers that these projects face, as unfavorable regulatory environments increase the financial risks that they bear and their hurdles to financing.
Regulatory Barriers
The biotechnology industry plays an important role in developing and commercializing novel products that are not always directly compatible with the existing infrastructure in the sectors into which they are introduced. Moreover, many of these products are manufactured using technologies such as gene editing that are closely regulated by national governments. These factors have resulted in the formation of multiple regulatory barriers that hinder the adoption of low-carbon biofuels and bioproducts and constrain the biotechnology industry's ability to reduce emissions of GHGs and other pollutants.
Biotechnology regulation
GMOs have had a long and contentious regulatory history in the U.S. Since 1986, biotech products in the U.S. have been regulated under the Coordinated Framework for the Regulation of Biotechnology (Coordinated Framework). 53 The framework has been updated several times since its introduction, including a comprehensive revision in May 2020, known as the Sustainable, Ecological, Consistent, Uniform, Responsible, Efficient (SECURE) rule, or Part 340 rule, which significantly streamlined and modernized the regulatory framework. 54 While U.S. regulators and consumers are relatively accepting of GMO products, societal opposition to the use of GMOs in the agriculture sector in particular has, on occasion, prompted a cautious response to new GMO products by regulators that has slowed the introduction of biotech products to the market.
Regulations in other regions, such as Europe, are more hostile, 55 hampering the ability of the U.S. biotechnology market's products to make an outsized contribution to global GHG emission reductions. For example, GMO food crops have enhanced resiliency under the types of extreme weather conditions that are becoming more common as the climate changes, thereby reducing the amount of land required by agriculture and reducing the incentive to increase GHG emissions via land-use change.
Studies have found that Americans, including those residing in states with large agricultural sectors, have concerns about the production of bioenergy from GMO feedstocks as well. 56 Some 2nd-generation bioenergy feedstocks have attracted opposition due to their use of fast-growing and potentially invasive forms of biomass. These feedstocks, especially those that have been genetically engineered to expand rapidly, have prompted concerns that they could expand into and damage the surrounding ecosystem. 57 Notably, though, biotechnology has also provided a means of potentially overcoming this barrier. In one recent research breakthrough, microalgae grown as a biofuels feedstock has been genetically engineered to be unable to survive outside of the production facility, thereby preventing its uncontrolled growth. 58
Genetically engineering microorganisms used in the production of fuels, chemicals and other products are also subject to federal regulation, but their place in the Coordinated Framework has long been unclear, and GE microbes were not clearly addressed in the SECURE rule. This regulatory uncertainty is likely to present a significant barrier to the development and commercialization of biotech climate innovation.
Regulation of fuels and products
A second major regulatory barrier is posed by conflicting state policies on certain biotechnology products. While the U.S. has a comparatively more integrated common market than the European Union, individual state governments sometimes have policies in place that discourage the introduction of biotechnology products into entire regions, let alone individual markets.
This situation can prevent the adoption of products that have interstate supply chains. One example that is already occurring involves the transport of renewable diesel through existing refined fuels pipelines. Renewable diesel is a drop-in biofuel that can utilize cost-effective distribution infrastructure such as the refined fuels pipelines that connect refineries to multiple states' markets (e.g., the Colonial Pipeline in the Southeastern U.S.). Many states require that the biofuels content of fuels retailed within their borders be stated on a fuel pump label, but this is not easily known if the renewable diesel is being pipelined in a blended form with diesel fuel. The result is that having even a single state on an interstate pipeline with strict pump labeling requirements can discourage the movement of a drop-in biofuel such as renewable diesel through it. The biofuel must instead be transported by rail, ship, or truck, all of which are more expensive and polluting options than pipeline. 59
Biotechnology products that are not compatible with unmodified existing infrastructure often face a heightened regulatory barrier. U.S. ethanol consumption has historically been constrained by the so-called “ethanol blend wall”, which refers to the maximum blend that can be used in existing infrastructure. Ethanol is a hydrophilic fuel that is miscible with water, and this trait prevents its movement through pipelines at any blend rate and use in unmodified engines above specific blend rates due to the potential for water contamination. Ethanol blends for use in unmodified engines were limited to 10% by volume (E10) until 2011, when the U.S. government began to allow blends of up to 15% by volume (E15) during certain seasons of the year. 60 The unrestricted sale of E15 was not permitted until 2019. 61 The blend limits apply to ethanol whether produced from corn or lignocellulosic biomass, and the blend wall sharply constrained fuel ethanol demand from all feedstocks beginning in 2013 as a result. 62
The U.S. government has also used regulatory changes to restrain demand for all biofuels since 2017. National biofuels demand over the last decade has been driven by the revised Renewable Fuel Standard (RFS2), which mandates the annual consumption of specific volumes of different types of biofuels. Petroleum refiners are tasked with ensuring that sufficient quantities of biofuels are blended with refined fuels to comply with the mandate, and a refiner's individual blending quota is determined by its market share. Between 2017 and 2019 the federal government greatly increased the number of hardship waivers that it awarded to refiners, reducing their blending quotas and overall demand for biofuels under the mandate. 63 One analysis calculates that the increased number of hardship waivers awarded caused demand for advanced biofuels under the mandate to be up to one billion gallons lower per year, and that the amount of the annual reduction has equaled as much as 50% of U.S. production. 64
Regulatory barriers can be particularly high for truly novel biotechnology products due to a lack of suitable regulatory frameworks. Cultured meat, for example, has been identified as one product for which existing U.S. regulations are inadequate due to the existence of myriad production techniques and the potential for genetic modification as part of the production process. 65
Regulatory uncertainty is as much of a barrier as adverse regulation is, inasmuch as both discourage financiers from providing the capital necessary for commercialization. The lack of an adequate regulatory framework also raises the possibility that adverse regulation could result from a regulatory rulemaking process.
The future growth of the U.S. biotechnology industry will be heavily affected by existing and potential regulatory barriers. One recent analysis estimated that 50% of the total economic impact of biotechnology over the next decade “could hinge on consumer, societal, and regulatory acceptance” of the industry's products. 66 The analysis further calculated that this amount increases to 70% over the next two decades. This has important implications for the ability of biotechnology to provide climate solutions given that early emissions reductions are more valuable than later reductions. The continued presence of regulatory hurdles is an especially pressing issue given the major shortfall of decarbonization investments.
Policy Proposals
The growing recognition by many U.S. policymakers that existing efforts to decarbonize the country's economy are falling short of its commitments under the 2015 Paris Climate Agreement has led to the unveiling of a variety of climate policy proposals at the federal, state, and local levels of government. These proposals fall into two broad categories: the first category focuses on the decarbonization of individual sectors while the second category instead takes an economy-wide approach. The sector-based proposals are similar to policies already in place in states such as California, whereas the economywide proposals are more novel and less well established.
An aggressive combination of sector-based and economywide policies is needed to rapidly realize the full potential of biotechnology to combat climate change.
Decarbonize Transporation
The first two decades of the 21st century saw the introduction of several policies to reduce the carbon intensity and GHG emissions of the transportation sector. Some, such as federal RFS2 and California LCFS, were successfully implemented and have resulted in the partial decarbonization of the on-road transportation sectors in their respective jurisdictions through the increased use of biofuels. But regulatory implementation of these policies has, particularly in the case of RFS2, limited their impact. Barriers to the full implementation of existing federal renewable fuels policies should be removed and aggressive follow-on transportation sector climate policies adopted to achieve the maximum near-term and longer-term GHG reductions.
Renewable Fuel Standard
The continued presence of the RFS2 as the centerpiece of U.S. transportation sector decarbonization efforts has had an important impact on the development of intermediate-term GHG emission reduction strategies, with cumulative reductions of 980 MMT CO2 since RFS2 was enacted. 67 But a series of EPA regulatory actions has substantially limited the program's climate gains. The agency has repeatedly reduced RFS volume obligations and has issued a growing number of small refinery waivers, further reducing the market for biofuels in the U.S. 68
EPA has taken some steps to expand U.S. biofuels markets. The ongoing effort to expand the volume of ethanol permitted by the ethanol blend wall is one example of this trend. Following on earlier efforts to ease restrictions on E15 consumption, in 2020 the Trump Administration announced that the federal government would not block the use of E15 in fuel pumps that were compatible with E10 (although state governments are still able to do so). 69 The complete replacement of E10 consumption by E15 would increase the amount of fuel ethanol consumed in the U.S. by 50%.
While the magnitude of the associated transportation sector emissions reduction would depend on the feedstocks being used, any increase to E15 consumption would contribute to the sector's decarbonization.
Additional actions to expand U.S. biofuel markets and establish greater RFS program certainty are needed to maximize near-term climate gains.
Low carbon fuel standard
The success of California's LCFS and a lack of federal action on climate policy after 2016 has prompted similar policies to be proposed in other states. Oregon adopted a LCFS under its Oregon Clean Fuels Program that mandates a 10% reduction to the carbon intensity of its transportation sector from 2015 levels by 2025. 70 Efforts to implement a statewide LCFS in neighboring Washington are ongoing despite the failure of an earlier attempt. 71
Similar regional initiatives have been proposed in the Midwest 72 and East Coast, 73 although legislative action on these proposals has yet to occur. Efforts to implement a national LCFS date to 2007, when then-U.S. senator Barack Obama introduced a bill to require future reductions to the carbon intensity of the U.S. transportation sector. 74 While that proposal was ultimately discarded in favor of legislation that created the RFS2, the U.S. House Select Committee on the Climate Crisis recently recommended that the RFS2 be transformed into a national LCFS. 75 That recommendation also included a provision to expand the remit of the RFS2 to include shipping and aviation fuels, in addition to on-road transportation fuels, as part of the transformation. The success of California's LCFS and steps by other states to adopt similar programs suggests the time has come for a federal low-carbon fuel standard.
Other fuel policies
In addition to market-driving programs such as the RFS and LCFS, ongoing federal and state investments in the improvement of existing biofuels and the development of next-generation biofuels are recommended to achieve the greatest near-term climate benefit. Robust federal investment in biofuel research and development at the U.S. Department of Energy and USDA and long-term tax credits or other incentives for private-sector biofuel research and development and facility construction are recommended to help drive additional private sector investment in low-carbon fuels.
Decarbonizing Industry
Policy has historically favored the production of biofuels over other forms of biobased products. Renewable chemicals and other non-fuel biobased products that achieve GHG emission reductions, will need to be supported if sectors outside of transportation are also to be successfully decarbonized. Several potential mechanisms exist for achieving this result, some of which build upon existing policy frameworks and others that employ more novel approaches.
Renewable chemical and biobased product programs
The U.S. government operates two important Farm Bill Energy Title programs, the BioPreferred Program and the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program, that support the commercial development of renewable chemical and biobased product manufacturers. These producers continue to face substantial hurdles to commercialization due to the lack of an even playing field with producers of competing products from fossil fuels.
The BioPreferred Program, originally authorized under the 2002 farm bill and reauthorized and expanded under the 2018 farm bill, includes a federal biobased product procurement preference program and a voluntary USDA labelling program for biobased products. 76 These programs have significantly increased both consumer awareness and market demand for biobased products. The 2018 farm bill provided increased funding for BioPreferred and, among other provisions, directed USDA and the Department of Commerce to develop North American Industry Classification System (NAICS) codes for renewable chemicals and biobased products. 77 The 2020 National Academies of Science report on “Safeguarding the Bioeconomy” cites the lack of an industry classification system for biotech products as a significant roadblock to investment and broader adoption, and recommends a series of actions to fill this gap. 78
The Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program (BAP) provides loan guarantees for the development, construction, and retrofitting of commercial-scale biorefineries. 79 The 2018 farm significantly expanded and streamlined the BAP loan program.
The Commerce Department and USDA should move swiftly to implement biobased product classification systems, and Congress should fully fund BioPreferred and the BAP loan program.
Tax policy
Tax policy has been a vital early driver of biofuel and other renewable energy development. Several recent policy proposals seek to provide a similar push to nonfuel biobased products. A proposed change to federal tax law would enable producers of biobased products to utilize the Master Limited Partnership pass-through tax structure that is widely employed by fossil fuel producers to improve access to capital and reduce tax burdens. 80
Such an expansion has been employed in the past in the U.S. to support the development of renewable electricity and biofuels logistics infrastructure, making its absence in the biobased products sector particularly notable. Federal legislation to expand existing business-related and investment tax credits to include renewable chemicals production has also attracted bipartisan support in Congress, 81 although it has yet to become law.
U.S. tax policy should be updated to extend renewable energy tax incentives to renewable chemicals and biobased products.
Decarbonizing Agriculture
One of the most important mechanisms available to leverage biotechnology for climate mitigation is agriculture policy. The carbon intensity of industrial products is highly dependent on the carbon intensity of feedstocks. Substitution of biobased feedstocks for fossil feedstocks is an essential step, but the greatest gains are achieved when climate objectives are integrated into the production of the feedstocks themselves, internalizing the environmental benefits that are provided by producers of biobased products, especially those that operate within the agricultural sector.
One such proposal would expand Farm Bill programs such as the Conservation Stewardship Program, which encourages producers to undertake conservation activities on working lands, 82 to include practices that decrease the carbon intensity of agricultural production while increasing crop yields. Likewise, the existing section 45Q tax credit for certain CC&S technologies could be expanded to encompass the building of soil carbon in the U.S. agriculture sector.
The agriculture sector faces high barriers of entry to voluntary carbon credit programs that prevent their full carbon sequestration potential from being recognized. Federal legislation such as the Growing Climate Solutions Act of 2020 has been introduced as a means of enabling the private sector to overcome these hurdles, 83 but federal agencies could also provide additional support by expanding existing agricultural conservation programs and creating agricultural sequestration certification programs.
Congress and the White House should move swiftly to implement programs to reward farmers for reducing the carbon footprint of feedstock production and for capturing and sequestering carbon.
Negative-Carbon Technologies
To achieve agreed upon climate mitigation objectives, a major focus of climate policy must be investment in negative-carbon technologies. This will require policies that drive carbon capture, use and storage throughout the economy, including in agriculture and manufacturing. This should include sector-specific programs in each of these areas. Climate policy should drive investment in agricultural biologicals, plant biotechnology and other biotechnologies to increase soil carbon sequestration and should reward microbial carbon capture and other biotechnologies for carbon removal and recycling. Provisions for biological carbon capture and use in the section 45Q tax credit provide a template for inclusion of these technologies in future climate policy.
Economy-Wide Climate Programs
The U.S. transportation and power sectors have been the primary focus of policymakers due to their large share of total U.S. GHG emissions (28% and 27%, respectively, in 2018). 84 Several states have adopted more ambitious long-term policies that require the full decarbonization of their economies by 2050, however, and the remaining sectors (industry, commercial/residential, and agriculture) will need to achieve future carbon intensity reductions greater than those that have been achieved by the power and transportation sectors to date if these policies are to be successful.
The first such state policy to be implemented was California's Global Warming Solutions Act of 2006, which mandated an economywide emission reduction of 80% by 2050. 85 In 2018 California's governor issued an executive order that changed this target to 100% on a net basis by 2045. 86 Equally ambitious is the New York Climate Leadership and Community Protection Act (CLCPA).
Passed in 2019, the CLCPA requires that the state's economywide emissions by reduced by 100% by 2050, 87 although up to 15% of the reduction can take the form of offsets Colorado, Connecticut, Maine, Massachusetts, Minnesota, Nevada, Rhode Island, and Washington also all have statutory targets requiring statewide GHG emission reductions of at least 80% by 2050. 88
A notable aspect of the deep economywide decarbonization targets is that they will likely require the widespread deployment of carbon-negative technologies and non-fuel bioproducts in order to be successful. Policy language referring to “net zero” emissions targets or, in the case of New York, explicit carbon offset thresholds reflects the recognition of this probable outcome by policymakers. Existing state decarbonization requirements also identify varying degrees of decarbonization difficulty for different economic sectors. New York's statutory target, for example, imposes an absolute zero-emission target on its power sector by 2040 through language that explicitly excludes the use of carbon offsets by that sector. The reason for this distinction is the expectation that zero-emission technologies such as solar PV and wind will enable an absolute zero requirement to be achieved.
Those sectors such as transportation and manufacturing that utilize more energy-intensive systems, by contrast, will need to rely upon biomass and biotechnology to achieve net-zero emissions, sometimes via carbon-negative technologies, while supplying close substitutes for the fossil fuels and products that modern economies rely upon.
Existing government efforts in the U.S. to incentivize decarbonization have largely been limited to the transportation sector, whereas the implementation of performance-based decarbonization standards in manufacturing would enable the broad scope of biotechnology's benefits to be recognized by the market. Such standards include, but are not limited to, financing R&D, promoting alternatives to non-fuel fossil products, supporting and expanding sustainable procurement policies, and incentivizing the development of green manufacturing and sustainable agriculture practices.
Recent years have seen only limited action at the federal level to encourage the utilization of biotechnology's decarbonization potential. Several states have adopted more ambitious long-term economywide decarbonization targets, however. While the policy mechanisms to achieve these targets have yet to be established, their success will likely depend on the extent to which the policies properly value the decarbonization, including net carbon sequestration, abilities of both fuel and non-fuel biotechnology pathways. The economywide scope of these decarbonization targets will require the adoption of policies that reflect the ability of biotechnology products to achieve decarbonization across all major sectors of the U.S. economy.
Summary and Conclusion
Climate change will affect every person, nation, industry, and culture on Earth. Avoiding its worst effects will require an equally universal response. The biotechnology industry is uniquely positioned to play a leading role in the effort to reduce emissions, adapt to new climate conditions, and address the needs of the 21st century and beyond. In this report, three key themes have emerged. These themes should guide policymakers – and the biotech industry itself – if we are to achieve the full potential of biotechnology to address climate change.
Biotechnology is an essential climate mitigation tool. Biotech has already delivered vital climate solutions and holds the potential to provide transformative climate technologies across a broad spectrum of industrial sectors.
Biotech can achieve at least 3 billion tons of CO2 equivalent mitigation annually by 2030 using existing technologies. The biotechnologies with the greatest potential impact include:
Biotech solutions have the potential to reduce agriculture sector GHG emissions by nearly 1 billion metric tons (1 gigaton) annually—or the equivalent of GHG emissions from more than 100 million U.S. homes. This includes reducing nitrous oxide emissions from agriculture by over 150 million metric tons of carbon equivalent and enhancing soil carbon sequestration by up to 600 million metric tons per year through a combination of agriculture biotechnology and agricultural biologicals.
The transition to next-generation biofuels enabled by biotechnology will double the per-gallon emissions reductions of biofuels versus petroleum. Doubling biofuel use through broad adoption of next-generation biofuels in aviation and other transportation sectors would increase the contribution of biofuels to U.S. transportation sector GHG emissions reductions from 980 million tons over the past thirteen years to over 1.8 billion tons for the decade 2020-2030, a reduction equivalent to taking more than 45 coal-fired power plants offline.
Broad adoption of algal and microbial feed ingredients that reduce enteric methane emissions from ruminant animals can avoid the equivalent of up to 140 million metric tons of carbon annually.
Broad adoption of anaerobic digestion for animal waste would reduce U.S. GHG emissions by over 150 million metric tons annually using current technology.
Bioenergy with Carbon Capture and Sequestration (BECCS) could cost-effectively remove over 700 million metric tons of carbon per year, or more than half the emissions from all U.S. coal power plants.
Suitable land and other infrastructure exists to deploy algae-based carbon capture systems at more than 500 power plants and ethanol facilities in the U.S. These systems would have a potential to capture more than 200 million tons of CO2 annually.
Emerging biotechnologies could have transformative GHG benefits in a range of industrial sectors. Among the most promising applications are:
Biobased plastics and polymers, such as PLA, PHA, and BDO have achieved lifecycle GHG reductions of up to 80% versus their petroleum-based counterparts. A rapidly growing list of new biobased chemical building blocks is now in development.
Plant-based and cultured meats are providing new consumer choices and up to 89% lower lifecycle emissions for a global food sector responsible for more than a third of total GHG emissions.
Biology-based parallel computing and DNA data storage have the potential to cut the energy and carbon footprints of computing and data storage – sectors expected to account for 14% or more of global GHG emissions by 2040 – by 99% or more versus current technology.
Biotechnology offers vital contributions to near-term GHG reductions and revolutionary tools to combat climate change in the longer term. To successfully address the challenge of climate change, humanity will need to predominantly decarbonize the global economy by midcentury and begin significantly drawing down concentrations of atmospheric carbon shortly thereafter. The struggle against climate change must be viewed as a multi-decade process, which needs to begin immediately. A ton of carbon emissions avoided now matters more than a ton avoided next year, but every step needs to be evaluated from the perspective of maintaining a trajectory towards success.
An aggressive combination of sector-based and economy-wide policies is needed to rapidly realize the full potential of biotechnology to combat climate change. The future growth of the U.S. biotechnology industry will be heavily affected by both existing and potential regulatory barriers, and by the degree to which governments invest in the development and deployment of biotech solutions.
Biotechnology is a vital component of the national and global infrastructure needed to combat catastrophic climate change. The economywide scope of this challenge will require the adoption of policies that reflect the ability of biotechnology products to achieve decarbonization across all major sectors of the U.S. economy. Biotechnology companies will need to speak up not only to ensure that new policy provides opportunities for success, but to make it clear that prosperity is not threatened by sustainability. There is ample evidence that reducing emissions is, in fact, essential in supporting a thriving economy.
The biotechnology industry has a tremendous opportunity to build upon decades of success, and provide critical tools and expertise for the decades to come. Like every other industry, change will be profound and lasting, but if any industry can demonstrate that change can be an opportunity for growth, it is this one.
Editor's Note
The text presented here is excerpted from a report prepared by Biotechnology Innovation Organization (Washington, DC, USA). The information and views expressed here are those of the authors and not Industrial Biotechnology or Mary Ann Liebert, Inc., publishers, or their affiliates. The full report includes an extensive discussion of biotechnology technologies as well as case studies of prominent companies in the space.