The president and auto industry maintain the nation is on the cusp of a gigantic shift to electric vehicles and away from liquid-fueled cars, but biofuels producers and some of their supporters in Congress aren’t buying it. They argue that now is the time to increase sales of ethanol and biodiesel, not abandon them.
To help address climate change, President Joe Biden has proposed an infrastructure plan that includes billions of dollars to pay for 500,000 electric vehicle charging stations, electrify public vehicles and enhance the nation’s power grid. These moves follow initiatives in California and other states to mandate electric vehicle sales and a goal by General Motors to shift production fully to electric vehicles by 2035.
Yet any shift from liquid-fueled cars to electric would be gradual, given the fleet of 279 million petroleum-powered vehicles now on U.S. roads. And producers of corn-based ethanol and soy-based biodiesel argue that biofuels will be needed for the foreseeable future.
The government’s promotion of electric vehicles comes as the U.S. works to reduce carbon emissions that worsen climate change and to compete in the increasingly electric global auto market. The transportation sector accounts for the largest share of U.S. greenhouse gas emissions, and more than 80% of that comes from cars, pickups and larger trucks, according to the Environmental Protection Agency.
LMC Automotive, a consulting firm, predicts more than 1 million electric vehicles will be sold in the U.S. in 2023, rising to over 4 million by 2030 — still less than one-quarter of normal annual new vehicle sales of around 17 million. Electric vehicles now comprise less than 2% of U.S. new-vehicle sales.
Citing a recent study from Harvard and Tuft universities that found ethanol emits 46% less carbon than gasoline, biofuels advocates say it’s imperative for the climate that the nation prioritize increased biofuel production.
Geoff Cooper, who heads the St. Louis-based Renewable Fuels Association, calls ethanol the “low-hanging fruit” for reducing carbon emissions and slowing global warming. He supports an immediate move from gasoline blended with 10% ethanol to a blend of 15%.
“If the goal is to reduce carbon impacts of our transportation sector and we knew we’re going to be using hundreds of billions of gallons of liquid fuels for the next several decades, why not take steps now to reduce the carbon intensity of those liquid fuels?” Cooper said.
Each year, U.S. refineries produce about 15 billion gallons of ethanol — about 10% the volume of gasoline — and 1.5 billion gallons of biodiesel, which is typically blended with petroleum-based diesel for trucks and other heavy vehicles.
Plants around the country produce the fuel, but most are in the Midwest, led by Iowa with 43 ethanol refineries and 11 biodiesel plants. Nearly 40% of the U.S. corn crop is used for ethanol, and 30% of soybeans goes to biodiesel.
Despite the carbon benefits of ethanol, others note the growth of biofuels prompted an expansion of corn acreage, increased use of fertilizers and more pollution of waterways. Biofuels plants also typically use hundreds of millions of gallons of water annually.
Iowa’s two Republican U.S. senators consider the shift toward electric vehicles a threat to farmers.
Sen. Charles Grassley said last fall that a proposal by Democratic Sen. Jeff Merkley of Oregon and Rep. Mike Levin of California to end U.S. sales of gas-powered vehicles by 2035 would devastate Iowa.
“This … would absolutely destroy Iowa’s economy because it’s so dependent on agriculture and agriculture is so dependent on biofuels,” Grassley said.
Iowa Sen. Joni Ernst argues that tax credits for buying electric cars typically go to well-to-do people on the East and West coasts and are propping up an industry that hurts demand for biofuels.
“It’s not only the move to all-electric vehicles that should have Iowans concerned; it’s the crazy tax breaks that wealthy coastal elites are getting for their electric vehicles,” Ernst states on her Senate website. “I firmly believe Iowa taxpayers shouldn’t be footing the bill for millionaires to get a discount on luxury cars.”
It is true that many who got the $7,500 federal electric vehicle tax credit since its inception in 2009 could afford a car that cost six figures or more. But since then, new models and higher sales have brought economies of scale and lower prices that appeal to more mainstream buyers.
The ethanol industry itself was a beneficiary of a 45-cent-per-gallon tax credit that provided about $30 billion to help the industry get established before that expired a decade ago. And farmers who grow commodity crops, such as corn and soybeans, still receive help from the federal government, including subsidized crop insurance costing billions of dollars annually.
Despite assurances the move to electric will be gradual, many farmers see the shift as a threat to their livelihoods and doubt state and federal officials from urban areas will protect rural economies.
“It’s like you’re almost helpless,” said Ed Wiederstein, a semi-retired livestock and grain farmer near Audubon in western Iowa. “It’s like a snowball that goes downhill.”
Joel Levin, executive director of the nonprofit advocacy group Plug In America, said the market will favor electric cars not only for environmental reasons but also because they’re high performance.
“It’s not like Californians wants you to eat your broccoli. These cars are fun to drive,” Levin said. “People don’t drive Teslas just because it’s good for the environment. They drive Teslas because it’s a sick car.”
Over time, a switch to electric vehicles likely will force farmers to adapt, said Chad Hart, an agriculture economist at Iowa State University. Farmers in states such as Iowa and Illinois still will mainly grow corn and soybeans because the soil and climate are perfect, but farmers elsewhere will raise other crops, he said.
“Agriculture is always shifting the crop mix to fit whatever markets offer the best opportunity,” he said.
DES MOINES, Iowa (AP) — By SCOTT McFETRIDGE
Consumer confidence hitting record high, but with hangovers left from pandemic
Global consumer confidence soared to record heights in the first quarter of 2021, according to The Conference Board: Global Consumer Confidence Survey, as vaccination campaigns broadened, travel restrictions loosened, and governments and central banks continued to provide robust economic stimulus.
These factors are contributing to various geographic regions returning to a “state of normalcy sooner” including increased spending across the spectrum, but some economic hangovers persist from the global pandemic crisis.
The Conference Board is a member-driven think tank that has delivered economic insights since 1916. It released this recent global consumer confidence survey on Wednesday. Their methodology for what is comparably a business cycle index is based on a point system where a figure above 100 is considered positive, or below 100 representing decline. This survey also employs opinion polling which is expressed as percentages.
“The lightening of consumer moods globally bodes well for spending throughout the remainder of the year as economies continue to emerge from the 2020 pandemic-induced economic downturn and work toward arresting the spread of the virus,” said Dana Peterson, Chief Economist of The Conference Board.
“Nonetheless, the global economic recovery – and, consequently, consumer sentiment – is likely to continue to vary notably from region to region. Economies with greater access to vaccines are likely to achieve herd immunity, and thus will return to a state of normalcy sooner,” Peterson added.
The survey found that overall global consumer confidence shot up from 98 in the fourth quarter of 2020 to 108 points in the first quarter of 2021. That figure exceeded the reading of 106 registered in pre-pandemic 2020 Q1. Reminder, a figure above 100 is considered positive and the 108-point score is the highest recorded since the survey began in 2005.
Confidence rose in 49 of 65 markets surveyed, as economic activity resumed, COVID-19 cases peaked in many economies, and vaccine development and distribution expanded.
The vaccines contributed to that revival, so individual economies’ level of access to them will greatly affect the timing of their recoveries and boosts in consumer confidence. (For 2020 Q4 indexes, results exclude China due to data collection constraints.)
Confidence still varied across regions: Latin America (up 13 points, from 86 to 99) and Europe (up 11 points, from 76 to 87) enjoyed the biggest gains in consumer confidence. But both regions started from low bases, and Europe remains the least confident region. North America, by contrast, slipped six points, from 116 to 110, while Africa and the Middle East dropped from 101 to 97.
Growing confidence in personal finances, especially, propelled the stronger global sentiment: Consumers were significantly more optimistic about their finances in Q1 2021, with the gap between positive and negative responses standing at +29 percentage points, up substantially from +15 percentage points in Q4 2020.
Of the three key drivers of global confidence, personal finances made the largest impact, although the other two drivers also trended upward: Sentiment about job prospects were up overall around the globe and spending intentions flipped from negative (-7 ppts) in Q4 2020 to positive (+6 ppts) in Q1 2021.
Consumers are gearing up for a return to normalcy: Consumers spent more on entertainment outside of the home, clothing, and vacations. Taken together, these trends indicate that consumers are increasingly looking forward to returning to normal activities at some point this year.
Given that consumption levels significantly contribute to growth in many mature economies, such activity in anticipation of greater freedom later on supports The Conference Board’s upwardly revised projection of 5 percent real GDP growth globally this year.
However, around the world, consumers also ramped up their protective savings: 57 percent of global consumers indicated that they are putting money into savings, an increase of 9 ppts from the previous quarter. Their efforts to economize primarily reflected savings on hospitality and entertainment services.
Consumers planned to eliminate annual vacations, delay upgrading technology, and cut meals away from home. They also switched to cheaper grocery brands and drove their cars less.
The scars of the recession lingered, with health and economic concerns still looming large.
The world is not quite buzzing yet.
A strong majority of consumers (64 percent) said that their market was still in recession during the first quarter of 2021. While that figure dropped sharply from the end of 2020 (down 17 percentage points, from 81 percent) recession concerns remained elevated.
Globally, only 41 percent of consumers expected that their economy would be out of recession in 12 months, virtually unchanged from the previous quarter.
Consumers’ worries about their own health (22 percent) and economic performance (20 percent) dominated their top concerns. This trend will likely hold through mid-2021 given the continued crisis, and the time it will take to arrest the coronavirus and establish herd immunity.
“With uncertainty around jobs and health prompting consumers to continue economizing, it seems clear that GDP returning to pre-pandemic levels will not in itself mark a return to the old normal,” said board chief economist Peterson. “Healing in labor markets may take longer, with greater potential for scarring among industries that are vulnerable to automation and digital transformation.”
Unbound by geography, CFOs look to capitalize on global talent pool
A large majority of CFOs around the world are planning to expand operations into new countries in 2021 to achieve their long-term growth strategies, according to a recent survey by CFO Research and Globalization Partners.
The survey also uncovered changing perceptions about hiring and remote work because of their pandemic experiences, with respondents saying they want to attract from the global talent pool that is unbound by the geographic restrictions of their company’s operating model.
The February 2021 survey of chief financial officers, chief executive officers and other senior finance executives also cites a common theme that they are prioritizing the need to build resiliency and although optimistic, disclose that their businesses are still stabilizing and in recovery.
Optimism towards organizational performance in 2021 varies across the regions. Asia-Pacific (APAC) CFOs are more optimistic about success in 2021 than their counterparts in the UK and North America. Since 65 percent of APAC respondents indicated that they expect to exceed goals and expectations in 2021, compared to 46 percent for UK and 47 percent for North America.
“The ongoing rollout of COVID-19 vaccines, investments flowing into the region, and momentum gained as companies accelerated their digital investments during the pandemic – all these are contributing to positive sentiments toward business in 2021,” said Charles Ferguson, General Manager, Asia Pacific, Globalization Partners. “With the ongoing shift in the global supply chain and a renewed focus of the US, UK and EU to grow alliances with APAC markets, there is an abundance of opportunity to expect from this region.”
CFOs’ global view within their hiring approaches
When asked to describe their hiring strategy over the next 12 to 18 months as, 48 percent of APAC respondents say they will attract new talent where they are based while 43 percent say they want to attract new talent that is unbounded by the geographic restrictions of their company’s operating model.
APAC CFOs have a high degree of interest in tapping into a more cost-effective, global talent pool—a concept favored by half of those surveyed –and capturing market share through global expansion, which is favored by 61 percent.
CFOs’ altered workforce management strategies
Seventy-four percent of the survey respondents in APAC anticipate operating remote and/or hybrid workforce models in the next 12 to 18 months.
Eighty-three percent of executives also say the COVID-19 pandemic fundamentally altered the way they think about hiring and workforce management and 89 percent say it altered how they consider remote employees or the work-from-anywhere model.
In parallel, CFOs are deeming global expansion as a top priority in the next 12 to 18 months.
“Implementing a strategy for global expansion and presence” was deemed a top priority in the next 12 to 18 months for 52 percent of APAC executives, compared to 38 percent of the EMEA executives and 36 percent of the North American executives.
With that in mind, 55 percent of the APAC CFOs that are expecting to achieve their goals in 2021 are already engaging a global (Professional Employer Organization) PEO, while 25 percent plan to use a global PEO within one year to support their international business strategy and 17 percent plan to engage a global PEO within three years.
United Airlines highlighting new emphasis on sustainable fuel along with global corporate partners
United Airlines is setting a course toward a sustainable future with the launch of its Eco-Skies Alliance – working with the airline, more than a dozen leading global corporations will collectively contribute towards the purchase of approximately 3.4 million gallons of sustainable aviation fuel (SAF) this year.
With its nearly 80 percent emissions reductions on a lifecycle basis compared to conventional jet fuel, this is enough SAF to eliminate approximately 31,000 metric tons of greenhouse gas emissions, or enough to fly passengers over 220 million miles.
As inaugural participants, a number of top corporate names are becoming part of the program, with the hoped-for effect of creating and increasing demand for SAF, including Autodesk, Boston Consulting Group, CEVA Logistics, Deloitte, DHL Global, DSV Panalpina, HP Inc, Nike, Palantir, Siemens, and Takeda Pharmaceuticals.
“While we’ve partnered with companies for years to help them offset their flight emissions, we applaud those participating in the Eco-Skies Alliance for recognizing the need to go beyond carbon offsets and support SAF-powered flying, which will lead to more affordable supply and ultimately, lower emissions,” said United CEO Scott Kirby.
“This is just the beginning. Our goal is to add more companies to the Eco-Skies Alliance program, purchase more SAF and work across industries to find other innovative paths towards decarbonization,” he added.
According to its media statement, United has made the airline industry’s single largest investment in SAF and has purchased more SAF than any other airline in the world.
World Energy, a long-term partner of United, will supply the SAF to Los Angeles International Airport (LAX), which makes it conveniently accessible to United’s operations.
In addition to the Eco-Skies Alliance program, United is giving customers the ability to contribute funds for additional SAF purchase or for use on initiatives United believes will help decarbonize aviation – the first of any U.S. airline to do so. Understanding there is a growing interest among customers for real, lasting solutions, this new capability will be available starting immediately via portal on at: united.com/ecoskiesalliance.
The company added in its statement that strong federal and state policy leadership will be essential to reducing the climate impacts of air travel, so starting immediately United will help individuals connect with elected representatives to advocate for policies that would make air travel more sustainable for the long term.
United will be the first airline in the world to connect customers directly with policy makers to voice the support that is needed to advance and accelerate permanent, scalable solutions that hold the potential to decarbonize the air transportation industry – and not just offset emissions.
“We know there is a growing demand from a wide range of our customers including corporations, cargo shippers and individuals who share the same concern we do – that climate change is the most pressing issue of our generation,” Kirby said.
United says it’s making a 100 percent “Green Commitment,” noting that the company believes the airline industry needs to be bolder when it comes to making decisions that confront the climate crisis.
“That’s why we’ve committed to become100 percent green and reduce our greenhouse gas emissions 100 percent by 2050 by taking the harder, better path of reducing emissions from flying, rather than relying on traditional carbon offsets,” the company said in its statement.
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