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Renewable Fuels Standard, Biofuels Continue to Take Hits

Drought-driven comments ignite RFS and biofuels debate.

Published on: Aug 9, 2012

In response to separate statements from the American Petroleum Institute and the International Food Policy Research Institute discrediting biofuels' impacts on the environment and markets, Growth Energy and the Global Renewable Fuels Alliance are speaking out to support biofuels.

On Monday, IFPRI released a statement explaining, "Rising maize and soybean prices can cause an increase in other commodity prices as the livestock industry switches from maize to wheat for animal feed and consumers are forced to shift their consumption to other commodities like wheat."

The group called for an elimination of biofuel production from corn. "Food crop demand for biofuels, particularly in the United States and European Union must be cut substantially, as should mandates for ethanol content in fuel, to help relieve the pressures on both domestic and global food markets. Currently, about 40 percent of total maize production in the United States is used to produce ethanol," IFPRI said.

Drought-driven comments ignite RFS and biofuels debate.
Drought-driven comments ignite RFS and biofuels debate.

In response, the Global Renewable Fuels Association said calling for elimination of biofuel production because of one growing season is "putting the cart before the horse."

The group said that it is not yet known how extensive the damage from the drought will be. They said biofuels have been used to help lift rural communities from poverty and strengthen grain prices, thereby increasing investments in agricultural production.

The group also addressed recent discussion regarding market demand for corn.

"Farmers in the U.S. and across the globe are a resilient group and will respond to the signals being sent by the market.  In fact, farmers around the world responded after the commodity price spikes in 2008 with one of the largest corn crops in history in 2009. Biofuels are an important part of that market and are in no small part responsible for the increase in global grain production over the past few years," GRFA said.

American Petroleum Institute Says RFS Will Raise Ethanol Content to E20

On Wednesday, the American Petroleum Institute said the Renewable Fuels Standard, which mandates biofuel production, is being undermined by impractical requirements and bad agency decisions. They said that the volume requirements will push E10 concentrations higher than "safe."

"Volumes will grow from more than 13 billion gallons this year to 36 billion gallons in 2022," the group wrote. "If the RFS is fully implemented, it would raise the per gallon ethanol concentration in gasoline to an average exceeding 20 percent."

Growth Energy defended the RFS, explaining that the legislation sets goals for reducing national dependence on foreign oil. The group staunchly defended biofuel safety.

"The gall of API to suggest biofuels do not improve our air quality and environment is laughable. Biofuels are cleaner than oil under all circumstances," they wrote.