End the biofuel boondoggle

  • 28 November 2018
  • NormanL

There is some hope the EPA may roll back mandates on the use of biofuels. We would hope the agency would do it because such mandates are bad policy. But the reality is that even with subsidies, the targets for biofuel use just can't be met:

...Reuters says that the EPA will move to reduce the biofuel targets for 2020, 2021, and 2022. "An EPA official confirmed the agency is working with stakeholders on a reset proposal, and aimed to finalize its plan by November 2019," Reuters wrote.

Part of the reasoning behind the attempts to revise targets downwards is that the biofuel industry seems to be lagging. Reuters notes that the EPA's Renewable Fuel Standards targets specify 36 billion gallons of biofuel should be sold in 2022. Biofuel producers only delivered about 20 billion gallons of biofuel to refiners in 2018, with advanced biofuels from algae and other low-impact feedstock falling particularly short of their individual goals. The Renewable Fuels Standard had previously required 26 billion gallons of biofuel to be sold in 2018. Since 2016, biofuels producers have missed the increasingly stringent Renewable Fuels Standards targets.

Those who support the Renewable Fuel Standards say that the blended quotas should remain in place to induce more investment in biofuel industries. Those who oppose the standards say that they should be revised in line with projected gasoline demand.

If a decade's worth of mandates, quotas, and subsidies has failed to bring about the bright new age of biofuels, then extending those mandates is very unlikely to help matters. Though it could induce more corruption:

...the biofuel industry has also inspired some creative scams, which have predicated several multi-million-dollar judgements against the scammers. In August, an Ohio man was sentenced for millions of dollars in biofuel credit fraud, and in September the Department of Justice reached a settlement with another company that had conducted millions of dollars of biofuel fraud.

If the aim is to enrich a few cronies (and crooks), then by all means -- keep the mandates. If the goal is a sensible energy policy that lets markets decide what fuels should be produced, then end the biofuel boondoggle now.