Liquid fuels will remain valued energy carriers well into any upcoming period when CO 2 reductions are sought. Biofuels are the presumed replacement for the petroleum-based transportation fuels that dominate liquid fuel use. Lifecycle analysis embeds a closed-loop model of biofuel-related carbon flows, making net CO 2 uptake an assumption to be refuted. However, evaluating net CO 2 uptake through dynamic industrial and agriforestry supply chains at real-world commercial scales is extremely difficult. All such estimates carry a great deal of doubt and cannot be verified empirically. A different perspective follows by anchoring analysis in the certainty that end-use CO 2 emissions from biofuels are essentially the same as those of the petroleum fuels they replace. A first-order model of the globally coupled bio-and fossil-fuel system reveals conditions for biofuel use to provide an atmospheric benefit. No benefit occurs in the energy sectors where biofuels are used, but rather must be found elsewhere in locations of carbon absorption or retention. The implication is that climate mitigation efforts should focus on such locations and include any mechanisms through which net uptake (an enhanced sink or verifiable offset) can be achieved by biological, chemical, geological or other means. Although biofuels can play a mitigation role when certain conditions are met, deemphasizing biofuel production in favor of terrestrial carbon management may offer more immediate and effective ways to counterbalance the CO 2 emitted when using carbon-based liquid fuels of any origin. Climate policies for transportation fuels should be reconsidered accordingly.

The use of liquid biofuels has expanded over the past decade in response to policies such as the U.S. Renewable Fuel Standard (RFS) that promote their use for transportation. One rationale is the belief that biofuels are inherently carbon neutral, meaning that only productionrelated greenhouse gas (GHG) emissions need to be tallied when comparing them to fossil fuels. This assumption is embedded in the lifecycle analysis (LCA) modeling used to justify and administer such policies. LCA studies have often found that crop-based biofuels such as corn ethanol and biodiesel offer at least modest net GHG reductions relative to petroleum fuels. Data over the period of RFS expansion enable empirical assessment of net CO 2 emission effects. This analysis evaluates the direct carbon exchanges (both emissions and uptake) between the atmosphere and the U.S. vehicle-fuel system (motor vehicles and the physical supply chain for motor fuels) over 2005-2013. While U.S. biofuel use rose from 0.37 to 1.34 EJ/yr over this period, additional carbon uptake on cropland was enough to offset only 37 % of the biofuel-related biogenic CO 2 emissions. This result falsifies the assumption of a full offset made by LCA and other GHG accounting methods that assume biofuel carbon neutrality. Once estimates from the literature for process emissions and displacement effects including land-use change are considered, the conclusion is that U.S. biofuel use to date is associated with a net increase rather than a net decrease in CO 2 emissions.

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Public policy supports biofuels for their benefits to agricultural economies, energy security and the environment. The environmental rationale is premised on greenhouse gas (GHG, "carbon") emissions reduction, which is a matter of contention. This issue is challenging to resolve because of critical but difficult-to-verify assumptions in lifecycle analysis (LCA), limits of available data and disputes about system boundaries. Although LCA has been the presumptive basis of climate policy for fuels, careful consideration indicates that it is inappropriate for defining regulations. This paper proposes a method using annual basis carbon (ABC) accounting to track the stocks and flows of carbon and other relevant GHGs throughout fuel supply chains. Such an approach makes fuel and feedstock production facilities the focus of accounting while treating the CO 2 emissions from fuel end-use at face value regardless of the origin of the fuel carbon (bio-or fossil). Integrated into cap-and-trade policy and including provisions for mitigating indirect land-use change impacts, also evaluated on an annual basis, an ABC approach would provide a sound carbon management framework for the transportation fuels sector.