The Price is Wrong: Who’s Picking up the Tab for the RFS?

American taxpayers, families and workers—come on down! In 2007, Congress made you an unwitting game show contestant when they expanded the Renewable Fuel Standard (RFS), a program that mandates large quantities of biofuel—made from corn and other biomass—be blended into the fuel supply. The twist in this game show? It's your money on the line, and only ethanol producers are winning.

The RFS mandate affects the prices of two of America’s (and the world’s) most vital commodities—food and fuel. In 2011, 40 percent of the nation’s corn crop was processed into biofuel, rather than food and livestock feed. The shrinking supply of corn for food has caused prices to spike nearly 18 percent, raising food costs for a family of four between $1,344 and $2,658 per year. In December, the National Council of Chain Restaurants released a study, which estimates that by 2015, when the RFS is fully phased-in, the mandate will increase total costs for chain restaurant owners by up to $3.2 billion per year. Anti-hunger groups have also taken note. In October 2012, ActionAid released a study outlining how RFS-related food price increases put developing countries at risk of famine.

Ethanol could also increase fuel costs. Experts have said that RFS mandates are likely to increase ethanol prices by 18.8 percent, raising the cost of gasoline, which is required to be blended with ethanol. In fact, fuel that is up to 85 percent ethanol is more expensive than pure gasoline, even with today’s petroleum prices and biodiesel costs more than $1.50 more per gallon to produce.

What’s more, ethanol producers received $20 billion in taxpayer subsidies between 2005 and 2011—$64 for every American.

And these are just a few of the ways Americans are forced to play a losing hand. Check out the infographic below to learn more about how RFS impacts your wallet, and browse this site to learn how RFS and U.S. biofuels policy affect the economy, food prices, engine performance and the environment.

If you agree that Americans deserve a Smarter Fuel Future, sign our pledge to demand change.

Related Blog Posts