Elisabeth Rosenthal, writing in The Times,reports that European policy makers are beginning to smell the coffee on biofuel subsidies:

Governments in Europe and elsewhere have begun rolling back generous, across-the-board subsidies for biofuels, acknowledging that the environmental benefits of these fuels have often been overstated.

But as they aim to be more selective, these governments are discovering how difficult it can be to figure out whether a particular fuel — much less a particular batch of corn ethanol or rapeseed biodiesel — has been produced in an environmentally friendly manner. Biofuels vary greatly in their environmental impact.“A lot of countries are interested in doing this, but it’s really hard to do right,” said Ronald Steenblik, research director of the Global Subsidies Initiative in Geneva. “You can’t look at a bottle of ethanol and tell how it’s produced, whether it’s sustainable. You have to know: Was the crop produced on farmland or on recently cleared forest? Did the manufacturer use energy from coal or nuclear?”

Several countries — including Australia, Britain, France, Germany, the Netherlands, Switzerland, as well as parts of Canada — have removed or are revising incentives for farmers, biofuel refiners and distributors.

The manufacturers and sellers will have to quantify their fuel’s net effect on the environment before being eligible for subsidies, or even to count toward national biofuel quotas. Many European countries aim to have 5.75 percent of their transportation fuel made from renewable sources by the end of the year.

There is increasing evidence that the total emissions and environmental damage from producing many “clean” biofuels often outweigh their lower emissions when compared with fossil fuels. More governments are responding to these findings.

Under a proposed Swiss directive, for example, a liter of biofuel would have to produce 40 percent less in emissions than fossil fuel to qualify for special treatment. It will be hard to make corn ethanol or even rapeseed (used to make canola oil) meet the standard, said Lukas Gutzwiller of Switzerland’s Federal Energy Office.

With a fuller picture of “the pros and cons of various biofuels, it was very obvious to us that we should not just push forward blindly,” Mr. Gutzwiller said. “We had to base the political debate on environmental analysis to make sure that biofuels were having a positive effect.”

Similarly, Germany recently canceled tax exemptions for biodiesel at the pump and is about to pass a mandate that only biofuels meeting sustainability criteria would count toward the national quota.

The biofuels craze was founded on the theory that plant-based fuels are carbon-neutral: The carbon dioxide released from burning biofuels would be canceled out by the carbon dioxide absorbed by plants as they grow. But this equation does not include emissions from processing the crops. Nor does it cover the environmental cost of fertilizers. Such factors vary significantly from biofuel to biofuel.

Elisabeth Rosenthal, “Europe, Cutting Biofuel Subsidies, Redirects Aid to Stress Greenest Options,”NYT, January 22, 2008.

McKinsey & Company released a report in November called “Reducing Greenhouse Gases: How Much at What Cost?“

From the executive summary, available here:

• Almost 40 percent of abatement could be achieved at “negative” marginal costs, meaning that investing in these options would generate positive economic returns over their lifecycle. The cumulative savings created by these negative-cost options could substantially offset (on a societal basis) the additional spending required for the options with positive marginal costs.

McKinsey is not, by any stretch of the imagination, a bunch of sandal-wearing, left-wing treehuggers. In fact, this particular study was funded by a number of energy companies. Nonetheless, they’ve come to these conclusions, and a quick look at their prominently website features progressive energy policy. For example, “The Case For Investing in Energy Productivity.”

Perhaps this represents a shift of the political center of gravity among American corporations. If so, a welcome change.

Thanks to David Roberts of Grist.org; see his piece “It Can Be Done” for more details, as well as Mathew Wald’s “Study Details How U.S. Could Cut 28% of Greenhouse Gases.“

From Clive Thompson’s “Motorhead Messiah,” on FastCompany.com

Check it out. It’s actually a jet engine,” says Johnathan Goodwin, with a low whistle. “This thing is gonna be even cooler than I thought.” We’re hunched on the floor of Goodwin’s gleaming workshop in Wichita, Kansas, surrounded by the shards of a wooden packing crate. Inside the wreckage sits his latest toy–a 1985-issue turbine engine originally designed for the military. It can spin at a blistering 60,000 rpm and burn almost any fuel. And Goodwin has some startling plans for this esoteric piece of hardware: He’s going to use it to create the most fuel-efficient Hummer in history. Goodwin, a 37-year-old who looks like Kevin Costner with better hair, is a professional car hacker. The spic-and-span shop is filled with eight monstrous trucks and cars–Hummers, Yukon XLs, Jeeps–in various states of undress. His four tattooed, twentysomething grease monkeys crawl all over them with wrenches and welding torches.

Goodwin leads me over to a red 2005 H3 Hummer that’s up on jacks, its mechanicals removed. He aims to use the turbine to turn the Hummer into a tricked-out electric hybrid. Like most hybrids, it’ll have two engines, including an electric motor. But in this case, the second will be the turbine, Goodwin’s secret ingredient. Whenever the truck’s juice runs low, the turbine will roar into action for a few seconds, powering a generator with such gusto that it’ll recharge a set of “supercapacitor” batteries in seconds. This means the H3’s electric motor will be able to perform awesome feats of acceleration and power over and over again, like a Prius on steroids. What’s more, the turbine will burn biodiesel, a renewable fuel with much lower emissions than normal diesel; a hydrogen-injection system will then cut those low emissions in half. And when it’s time to fill the tank, he’ll be able to just pull up to the back of a diner and dump in its excess french-fry grease–as he does with his many other Hummers. Oh, yeah, he adds, the horsepower will double–from 300 to 600.

“Conservatively,” Goodwin muses, scratching his chin, “it’ll get 60 miles to the gallon. With 2,000 foot-pounds of torque. You’ll be able to smoke the tires. And it’s going to be superefficient.”

He laughs. “Think about it: a 5,000-pound vehicle that gets 60 miles to the gallon and does zero to 60 in five seconds!”

This is the sort of work that’s making Goodwin famous in the world of underground car modders. He is a virtuoso of fuel economy. He takes the hugest American cars on the road and rejiggers them to get up to quadruple their normal mileage and burn low-emission renewable fuels grown on U.S. soil–all while doubling their horsepower. The result thrills eco-evangelists and red-meat Americans alike: a vehicle that’s simultaneously green and mean. And word’s getting out. In the corner of his office sits Arnold Schwarzenegger’s 1987 Jeep Wagoneer, which Goodwin is converting to biodiesel; soon, Neil Young will be shipping him a 1960 Lincoln Continental to transform into a biodiesel–electric hybrid.

His target for Young’s car? One hundred miles per gallon.

This is more than a mere American Chopper –style makeover. Goodwin’s experiments point to a radically cleaner and cheaper future for the American car. The numbers are simple: With a $5,000 bolt-on kit he co-engineered–the poor man’s version of a Goodwin conversion–he can immediately transform any diesel vehicle to burn 50% less fuel and produce 80% fewer emissions. On a full-size gas-guzzler, he figures the kit earns its money back in about a year–or, on a regular car, two–while hitting an emissions target from the outset that’s more stringent than any regulation we’re likely to see in our lifetime. “Johnathan’s in a league of his own,” says Martin Tobias, CEO of Imperium Renewables, the nation’s largest producer of biodiesel. “Nobody out there is doing experiments like he is.”

Nobody–particularly not Detroit. Indeed, Goodwin is doing precisely what the big American automakers have always insisted is impossible. They have long argued that fuel-efficient and alternative-fuel cars are a hard sell because they’re too cramped and meek for our market. They’ve lobbied aggressively against raising fuel-efficiency and emissions standards, insisting that either would doom the domestic industry. Yet the truth is that Detroit is now getting squeezed from all sides. This fall, labor unrest is brewing, and after decades of inertia on fuel-economy standards, Congress is jockeying to boost the target for cars to 35 mpg, a 10 mpg jump (which is either ridiculously large or ridiculously small, depending on whom you ask). More than a dozen states are enacting laws requiring steep reductions in greenhouse-gas emissions. Meanwhile, gas prices have hovered around $3 per gallon for more than a year. And European and Japanese carmakers are flooding the market with diesel and hybrid machines that get up to 40% better mileage than the best American cars; some, such as Mercedes’s new BlueTec diesel sedans, deliver that kind of efficiency and more horsepower.

General Motors, Ford (NYSE:F), and Chrysler (NYSE:DAI), in short, have a choice: Cede still more ground–or mount a technological counterattack.

Goodwin’s work proves that a counterattack is possible, and maybe easier than many of us imagined. If the dream is a big, badass ride that’s also clean, well, he’s there already. As he points out, his conversions consist almost entirely of taking stock GM parts and snapping them together in clever new ways. “They could do all this stuff if they wanted to,” he tells me, slapping on a visor and hunching over an arc welder. “The technology has been there forever. They make 90% of the components I use.” He doesn’t have an engineering degree; he didn’t even go to high school: “I’ve just been messing around and seeing what I can do.”

All of which raises an interesting possibility. Has this guy in a far-off Kansas garage figured out the way to save Detroit?

Actual mileage may vary.

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