In efforts to ‘do something’ about energy affordability and ease prices at the pump, Congress is attempting to make E15 fuel blends available year-round with new legislation, claiming it will save money. But just like many well-intentioned government actions, unintended consequences follow. In this case, repercussions include higher costs for consumers.
The very fuel lawmakers assert will save Americans money has already been propped up through tens of billions of taxpayer funds for decades. Multiple tax credits subsidize biofuels, with the latest expansion expected to cost $53.1 billion over the next decade. More than $800 million has been or will be spent on biofuel infrastructure projects. Other handouts include crop insurance, loan guarantees, grants, and commodity programs.
The corn ethanol industry also benefits from the Renewable Fuel Standard (RFS) that legally requires a set volume of biofuels to be mixed into conventional gasoline, creating a guaranteed market. The federal government is shaping a fuel market through ethanol blend mandates.
Kristen Walker is Senior Policy Analyst and Manager for Energy and Transportation with the American Consumer Institute, a nonprofit education and research organization. Follow ACI on X @ConsumerPal.