Jan 25, 2016

End the Renewable Fuel Standard

Post by Derek Yale

The Renewable Fuel Standard (RFS) is a blatant handout to the powerful corn lobby at the expense of American families. Read Freedom Partners Senior Policy Advisor Andy Koenigs op-ed in Forbes in which he explains why Congress should put an end to RFS.


Now a week out from the Iowa caucuses, the politics of the Renewable Fuel Standard (RFS)—the federal mandate requiring fuel refiners to blend biofuels into their gas and diesel fuels—are nearing their quadrennial high watermark. Iowa Gov. Terry Branstad exhibited as much last week, publicly calling for the defeat of presidential candidates who support eventually ending the RFS (like Ted Cruz).

Missing from this political drama is any concern for American families, who are left footing the bill for this special interest giveaway. And it’s all the more reason that Congress should dismantle this and every other energy tax credit, subsidy and mandate—including those for renewables and fossil fuels.

While we can’t end all these handouts without major tax reform, the RFS is a place we can start. Passed in 2005 and expanded in 2007, today it is a solution in search of a problem. At the time, prevailing wisdom was that we needed a reliable fuel alternative to expensive oil, which then was at an all-time high. Yet thanks to America’s own energy revolution, today’s low oil and gas prices have eliminated that concern.

A blatant handout 

In truth, the RFS is a blatant handout to the powerful corn lobby, which dominates Iowa politics. Unlike other industries that have to compete for their customers, the RFS forces Americans to buy increasingly more biofuels over time.

That’s a pretty sweet deal if you belong to the biofuels lobby—as the money they spend in Washington shows. From the 2008 through 2014 election cycles, the industry showered federal lawmakers with $10.9 million in campaign contributions. Even that pales in comparison to the money they spent lobbying the federal government. From 2008 to 2014, the industry spent $188 million on an array of special interest perks, including the RFS.

For the rest of Americans, however, the RFS is a raw deal. It amounts to a hidden tax that raises the cost of living on millions of families who can ill afford it.

Read the full op-ed.