Despite government subsidies and mandates, a new report said advanced biofeuls won't meet production targets, leading critics to call for the program's repeal.
In a recent Government Accountability Office report, auditors said the plan to blend up to 36 billion gallons of ethanol and advanced biofuels into the nation’s gasoline supply by 2022 has not “not kept pace with statutory targets.”
The 2005 Renewable Fuel Standard set aggressive targets for the development and use of biofuels as a means of reducing domestic greenhouse gas production, and curtailing oil imports.
The GAO said the production of the most commonly used biofuel, ethanol derived from cornstarch, “has nearly reached the maximum [20 percent greenhouse gas reduction] called for” under the renewable fuel standard.
More advanced biofuels, such as algae, animal and vegetable fats, and dedicated crops like switch grass, were supposed to reduce the nation’s greenhouse gas emission by a further 50 percent.
Reaching that goal has proved elusive despite decades of federal subsidies and research funding.
“In fiscal years 2013 through 2015,” the GAO said, “the federal government obligated more than $1.1 billion for advanced biofuels R&D.”
Even with federal backing, “it does not appear possible to meet statutory target volumes for advanced biofuels in the RFS under current market and regulatory conditions,” the GAO said.
Among the reasons for the shortfall, the GAO said, is that “production costs are currently too high,” and the high costs mean advanced biofuels cannot compete with cheaper oil. “This disparity in costs is a disincentive for consumers to adopt greater use of biofuels and also a deterrent for private investors entering the advanced biofuels market.”
Renewable fuel experts interviewed by the GAO as part of its investigation suggested that one way to close the price gap would be to impose a “price on greenhouse gas emissions—for example, through a carbon tax or similar mechanism.”
At a Dec. 1 Senate hearing on the GAO’s findings, Sen. James Lankford (R-Okla.) said Congress should “do away with the [renewable fuel standard]” because the program “yields few benefits but it inflicts substantial costs on consumers.”
The Environmental Protection Agency’s Janet McCabe, acting assistant administrator of the Office of Air and Radiation, told the Senate subcommittee the EPA “agrees with many of the identified challenges” in the GAO report.
But McCabe also said the EPA remains “committed to implementing the program in a way that responsibly pushes forward and grows renewable fuels over time, as Congress intended.”
Supporters of the renewable fuel standard, like Sen. Charles Grassley (R-Iowa), have pushed the EPA to maintain biofuel production requirements in spite of reduced demand.
In a March 23 letter from Grassley and other farm belt state senators to EPA administrator Gina McCarthy, Grassley said the standard “ultimately strengthens our economy.”
“We need a strong RFS,” Grassley said, “and need more biofuels.”
Opponents of the renewable fuel standard hope the incoming Trump administration will do away with it entirely.
In a Nov. 30 op-ed, Competitive Enterprise Institute senior fellow Marlo Lewis said the renewable fuel standard was akin to a “Soviet-style production quota system.”
“The RFS literally compels one set of companies to purchase, process, and create a market for other companies’ products,” Lewis said.
“It makes one business the involuntary servant of another. That is not the American way,” Lewis said.