Eliminate Favorable Treatment of Biofuels

Since 2002, farm bills have contained an energy title with biofuel programs, but the federal government has a long history of using policy to inflate the use of biofuels. Over time, Congress and both Republican and Democratic Administrations have put in place a variety of subsidies---from tax credit...

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Bibliographic Details
Published in:Policy File 2016
Main Author: Loris, Nicolas
Format: Report
Language:English
Subjects:
Energy
Government
The Heritage Foundation
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Summary:Since 2002, farm bills have contained an energy title with biofuel programs, but the federal government has a long history of using policy to inflate the use of biofuels. Over time, Congress and both Republican and Democratic Administrations have put in place a variety of subsidies---from tax credits, import tariffs, and grants to outright volumetric mandates---to increase the production, sale, and use of biofuels. Favoritism toward biofuels and bioenergy has promised much but delivered very little. While a select few benefit from special treatment, bioenergy policies have imposed considerable costs on taxpayers, energy consumers, the environment, the world's poor, and the large segment of the agricultural community that does not profit from the subsidies and Renewable Fuel Standard. The RFS is the main source of U.S. biofuel policy, which mandates that billions of gallons of ethanol be blended into gasoline each year, with a peak of 36 billion gallons in 2022. Policy reforms that removed these handouts would promote competition and fuel choice.