The Senate opened debate on Wednesday on the Energy Policy Modernization Act, which seeks to reestablish the federal government’s scope of authority across the national energy sector. As the bill begins to take shape, the Renewable Fuels Association would like to remind policymakers of the importance of the Renewable Fuel Standard as a crucial tool for ensuring a more diverse and less oil-dependent fueling market.
In a two-page question-and-answer fact sheet, RFA addresses some of the most frequently asked questions and myths about ethanol and the RFS. Highlights include:
- First and foremost, there is no “corn ethanol subsidy.” The Volumetric Ethanol Excise Tax Credit (also known as the “blender’s tax credit”) expired five years ago in 2011. Further, it was gasoline blenders — not ethanol producers — who received a 45 cent per gallon tax credit for each gallon of ethanol blended. The Small Ethanol Producer Tax Credit also expired in 2011.
- The RFS is not a “subsidy.” The RFS is not a tax incentive or subsidy in any way, shape, or form. The RFS has absolutely no impact on the federal budget or tax revenues. Rather, the RFS is a program that guarantees lower-carbon biofuels will have access to a fuel market that is overwhelmingly and unfairly dominated by petroleum.
- There is also no such thing as a “corn ethanol mandate,” let alone an “ethanol mandate.” The RFS does not mandate the use of corn ethanol or any other type of ethanol for that matter. Rather, the RFS requires that oil companies blend increasing volumes of renewable fuels, without specifying the type of renewable fuel. In fact, oil companies may meet their RFS obligations by blending and marketing biogas, renewable diesel, renewable jet fuel, biobutanol, biodiesel, and a host of other renewable fuel options. While a wide variety of renewable fuels are being produced today, ethanol has been the highest-volume and lowest-cost renewable fuel available to meet RFS requirements.
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