must be conducted to mitigate negative environmental and economic impacts. The report also strongly encouraged the Minnesota state legislature to remove the subsidies and credits for older ethanol plants, citing rising profits for plants that still receive the subsidies.

EISA grandfathers existing production facilities thereby providing no incentive to improve production practices or increase efficiency. New production facilities will be required to reduce by at least 20 percent the life cycle greenhouse gas (GHG) emissions relative to life cycle emissions from gasoline and diesel. Biorefineries will qualify for cash awards for producing fuels that displace more than 80 percent of the fossil-derived processing fuels used to operate a biorefinery. Workshop participants raised a number of concerns about current policies and the lack of incentives for performance improvements and innovation. In particular, many participants suggested that the current policy framework sends mixed signals to producers and consumers. For example, EISA grandfathers existing production facilities, thereby discouraging efficiency improvements in these facilities. Current policies effectively reduce the cost of biofuels, encouraging greater consumption rather than the development of more fuel-efficient vehicles. And policies do not provide adequate means of fully accounting for the potential loss of ecosystem services caused by increasing soil erosion, water use, etc.

New climate legislation, which was being debated in Congress during the workshop, was seen as potentially exacerbating potential negative land-use and environmental costs and diluting the positive environmental provisions of previously enacted legislation. Decisions to delay provisions allowing for the calculation of indirect land-use impacts under EPA’s new renewable fuels standard and the potential for expanding feedstock production on environmentally sensitive lands were particularly troublesome to many participants, as were decisions to shift some responsibilities for administering EISA from EPA to USDA.

State representatives at the workshop implied that they were waiting for federal leadership before proposing new energy policies and expressed frustration with the complexity and slow-moving federal policy process. They suggested that a federal framework with clear goals and metrics was needed to address climate change and to support the development of a sustainable domestic biofuel industry. While the state representatives recognized the role of the states in supporting both biofuel and climate goals, they expressed frustration with conflicting federal energy policies.

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