The Ethanol Mandate is an Expensive Failure

March 27, 2015

“Markets know better than government and consumers deserve the right to choose.”

You may not know it, but a government mandate exists that dictates the kind of fuel that goes into your car’s gas tank and you’re not only paying for it at the pump, but also in the grocery store and on tax day. Nan Swift of the National Taxpayers Union explains the impact of that mandate—put in place by the Renewable Fuel Standard (RFS)—which forces biofuels like ethanol made from corn onto American consumers.

Swift explains that the ethanol mandate is a “hidden tax” on consumers; in fact, this policy is directly responsible for raising the 2012 grocery bills by $2,055 for a family of four and is on pace to increase food costs for all Americans by $3 billion annually in the next seven years. And the nonpartisan Congressional Budget Office said that without reform, the RFS could add an additional 26 cents per gallon to gas prices.

Beyond increased costs at the gas station and at the grocery store, the ethanol industry is only kept afloat by billions of dollars of taxpayer money. According to a study by the leading environmental group Friends of the Earth, between 2008 and 2022, taxpayers will have paid out more than $400 billion to the biofuels industry through tax incentives, tariffs, grants and loans.

And because it’s a mandate, the policy removes consumer choice from the equation by requiring that ethanol is blended into gasoline — despite very little consumer demand for the product.

Watch Nan’s video to learn more about the hidden costs of the ethanol mandate and then find out if your Representatives have taken a stand against it.