Home Indiana Agriculture News Biofuel Leaders and Petroleum Institute Spar over Reforming the RFS

Biofuel Leaders and Petroleum Institute Spar over Reforming the RFS

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RFS reform

Rob ElliottAmerican Petroleum Institute, the Environmental Working Group (EWG), and the anti-hunger group ActionAid USA were back at it this week, holding a joint press call Wednesday to call for repeal of corn ethanol mandates under the Renewable Fuel Standard (RFS.) So leaders in the renewable fuels industry were back at poking holes in their arguments with a press call held just prior to the API call.

Kelly Stone of ActionAid said the ethanol mandates contribute to unstable food prices around the world. Illinois farmer and First Vice President of the National Corn Growers Association, Rob Elliott (pictured,) disagreed.

“The whole problem with the food vs. fuel myth is that it’s been around for years and it’s never come true,” he said. “Several years ago there was significant effort put in to exploring the myth, with the resounding outcome being that energy and transportation along with marketing and packaging had way more to do with food prices than raw material costs. There’s about a dime’s worth of corn in a $4 box of corn flakes which kind of tells that tale. Corn prices are now below cost of production and nearly half of where they once were, so obviously food prices haven’t followed a similar path.”

Stone also said over the next decade, biofuel mandates will drive a 43 percent increase in global biofuel demand, creating serious implications for land rights around the world. Elliott again disagrees.

“The law that establishes the RFS prohibits crop land expansion beyond those 2007 levels, and in fact U.S. crop land has trended downward since that time while all the while biofuel production has increased. As well, I’d say that the RFS caps the amount of corn from ethanol that can qualify for the program at about 15 billion gallons. The industry is currently operating at an annual rate of 14.7 billion, so the cap has essentially been reached.”

Also this week the Advanced Biofuels Association proposed legislative reform of the RFS. RFS proponents like Bob Dinneen at the Renewable Fuels Association have dismissed such an idea.

“We seriously question who ABFA is representing these days, because all they are doing is throwing more uncertainty into the process by calling for legislative action when legislation isn’t needed.”

And Adam Monroe, the president of Novozymes America said the politics are broken not the legislation.

Tom Buis, CEO of Growth Energy, added, “By opening up the RFS for legislative changes, you are opening a can of worms that will only create further uncertainty for the industry, which is the last thing biofuel producers of any kind need. This is a shortsighted proposal that would set the entire renewable fuels industry on the path to a rollback of the RFS. By opening up the Clean Air Act, the end results could be far more disastrous for renewable fuel companies given the oil companies’ resistance to complying with the RFS.

“The simple fact is that first generation fuels, such as corn based ethanol, and cellulosic ethanol are inextricably linked and this proposal completely ignores that competitive commercialization in the future is likely to remain tied to the grain ethanol industry to capture the economic synergies of supply chains, co-production and marketing.”