Ethanol has been in the spotlight as a presidential campaign issue with the Iowa caucuses just around the corner, but the Renewable Fuels Association is concerned about some of the misconceptions that have been tossed around in the discussion so they have issued a one-page fact sheet to correct some of that with both candidates and the media.
First – 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 Renewable Fuel Standard (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 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.
RFA President and CEO Bob Dinneen urges members of the media to contact the RFA if they have questions about ethanol or the RFS. “Unfortunately the media has been perpetuating a lot of the misinformation about the ethanol industry as they cover the presidential candidates,” said Dinneen. “There are two sides to every story and if reporters have questions, or need further clarification on any ethanol-related issues, we are ready and available to assist them.”