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Good News
Biofuel Production Drops Due to Uncertainty about Mandate

More than three-quarters of America’s biofuel producers cut production this year, a result of uncertainty over the federal mandates undergirding the industry. The EPA has proposed to keep ethanol blending targets at last year’s levels, and that has made producers skittish. The Hill reports:

Almost eight in 10 biodiesel producers in the United States have cut back production this year due to uncertainty over federal policies that encourage making the fuels, the National Biodiesel Board (NBB) said. […]

Almost all of the surveyed companies attribute the industry’s decline to two recent policy developments: the expiration at the end of last year of the tax credit to produce biodiesel and a proposal last year by the Environmental Protection Agency not to increase the biodiesel mandate in the Renewable Fuel Standard. […]

The EPA proposed in November to mandate that diesel refiners blend 1.28 billion gallons of biodiesel into their products in 2014, the same level as 2013. The industry produced 1.8 billion gallons in 2013, so that amounts to a reduction in volume, the NBB said.

No doubt the National Biodiesel Board was attempting to stoke outrage at the decreased biofuel production by releasing this report, but this is good news for America. Our biofuel policies are in dire need of reform: we produce more than we can effectively mix in to our fuel, using corn to make ethanol drives up global food prices, starving the world’s poor, and worst of all, the vast majority of our ethanol isn’t even green, the supposed reason for enacting these mandates in the first place.

Biofuel producers are cutting back because they’re uncertain, and that’s not a bad thing. But long-term, we need to overhaul this broken system.

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  • gabrielsyme

    using corn to make ethanol drives up global food prices, starving the
    world’s poor, and worst of all, the vast majority of our ethanol isn’t
    even green

    Doubtless this was written in haste, but when you have two options, one of which is “it isn’t green” and the other being “it causes starvation” the phrase “worst of all” needs to apply to the latter rather than the former.

    If Obama actually was what his supporters claimed to be: intelligent, engaged, not in hock to special interests, and concerned for the world’s poorest, this would have been the very first policy to get the axe. There is no more obviously stupid and gravely harmful policy of the United States government.

    • Breif2

      “It was worse than a crime; it was a blunder.”

  • BrianFrankie

    Not to be pedantic, but this post is conflating two separate biofuel programs. Biodiesel is generally made from oilseeds, while ethanol is (in the US) primarily corn based and blended into gasoline. The FT article is specifically about biodiesel, which has nothing to do with ethanol blending – among other differences, there is no blend limitation for biodiesel. Analysing the FT article from the standpoint of the ethanol biofuel program is a non sequitur.
    I’ll be the first to admit that both biodiesel and bioethanol programs have serious problems that require overhauls to the system. But the problems are different, and so are the solutions.

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