A study commissioned by the National Corn Growers Association finds that proposed regulations by the U.S. Environmental Protection Agency to implement the expanded Renewable Fuel Standard would cost the ethanol industry as much as $420 million a year.
The study found that the up-front cost to the ethanol industry for compliance with the new regulations could total $30 million, with annually recurring compliance costs reaching up to $420 million.
Higher costs for ethanol producers mean increased costs for corn growers, said Steve Ruh, chairman of NCGA’s Ethanol Committee. “Paperwork has a price,” Ruh said. “At a time of economic recession, the last thing any industry needs are new regulations – especially unneeded recurring reporting requirements – that can cost up to a half-billion dollars a year.”
Ruh says the cost of the new regulations at the farm level will mainly be in the form of extra management and recordkeeping time associated with the “renewable biomass” definition. It is also possible that in some geographic areas other costs will be forced down to the farmer level of the supply chain.
The report, “Compliance Costs Associated with the Proposed Rulemaking for RFS2,” was prepared by Informa Economics.