The Administration's Ethanol Package Exacerbates the Cost of the Renewable Fuel Standard

In 2018, the Environmental Protection Agency granted exemptions to 31 small refineries for biofuel-blending requirements because the refineries proved they were suffering disproportionate economic hardship from the policy. To appease an upset biofuel lobby, the Trump Administration is now proposing...

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Bibliographic Details
Published in:Policy File 2019
Main Author: Loris, Nicolas D
Format: Report
Language:English
Subjects:
Economic policy
Energy
Environment
Government
The Heritage Foundation
Online Access:Request full text
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Summary:In 2018, the Environmental Protection Agency granted exemptions to 31 small refineries for biofuel-blending requirements because the refineries proved they were suffering disproportionate economic hardship from the policy. To appease an upset biofuel lobby, the Trump Administration is now proposing a package that will pass 2020 and future ethanol-volume obligations on to larger refiners that do not qualify for an exemption. The Trump Administration's proposal will exacerbate the market distortions caused by the renewable fuel standard (RFS) and unnecessarily pass costs to non-exempt refineries without any due process of law. The RFS has driven food and fuel prices higher, and Congress would be wise to repeal it. If the Administration wants to please both ethanol industry and refiners, it should eliminate tariffs. Tariffs drive up production costs for both oil and corn products and close off market opportunities. Pursuing a zero-tariff policy with America's trading partners would give a strong boost to the U.S. economy.