California says biofuels aren't so green

California has approved a new clean-fuel rule requiring fuel providers to cut greenhouse-gas emissions from fuels by 10% in 2020 compared to 2010 levels. The rule to calculate emissions, however, takes into account all aspects of fuel production, hence biofuels will face a penalty:

"Despite intense opposition from the US corn (maize) ethanol industry, the rule takes into account agricultural expansion abroad caused by rising grain prices as food crops are diverted for biofuels. This 'indirect' effect boosts the estimated emissions for various categories of corn ethanol by 50% or more, meaning that ethanol often results in higher greenhouse-gas emissions than gasoline." (from the Nature news article)

The formula that California uses to calculate the greenhouse gas cost of biofuel, however, is fairly conservative, and some analysts argue that it should be even higher.