Last week, I had the opportunity to speak with NPR’s Mitra Taj for a Living on Earth piece about seeing an end to corn ethanol subsidies this year and the potential to put in place policies that help develop and commercialize better biofuels. In it, we discussed the need to end the costly and redundant Volumetric Ethanol Excise Tax Credit or “VEETC”—the main corn ethanol tax credit worth roughly $6 billion dollar per year—and the opportunity to replace it with a tax credit that pays for real environmental performance, such as the Greener Biofuels Tax Credit we here at NRDC have proposed.
Taj’s story focuses on declining support for the VEETC, driven by a growing coalition with concerns that range from corn ethanol’s polluting record, to its role in driving up food prices, to the wastefulness of paying oil companies to blend corn ethanol into our gasoline when federal mandates already require them to do so, and how Senators from both sides of the aisle are now responding with legislation that would repeal the VEETC.
It also highlights the choice lawmakers now face between policies that would lock more corn ethanol into our market and investments in the cleaner, advanced biofuels we need.
Taj speaks with Michael McAdams, President of the Advanced Biofuels Association, who makes clear that despite corn ethanol industry rhetoric about corn ethanol being “a bridge to better biofuels”, more subsidies for corn ethanol—whether they come in the form of tax credits or massive investments in ethanol-specific infrastructure like new pipelines, special blender pumps, and flex-fuel vehicles—actually come at the expense of better-performing advanced biofuels that are being developed to drop right into our current fueling system with no new cars or pumps needed:
“The corn ethanol industry has made it very difficult for many of the advanced biofuels to have a fair hearing in the political marketplace. For them to draw over $6 billion from American taxpayers and not even have a fair conversation with their colleagues in the advanced industry to suggest we might reallocate some of those resources to expedite commercial building of advanced facilities is a lot like the oil industry used to treat them. And they ought to know better.”
Asked what we can do to shift away from first generation biofuels and realize the promise of advanced biofuels, I told Taj about NRDC’s Greener Biofuels Tax Credit:
“The greener biofuels tax credit that we’ve proposed is actually technology-neutral. It basically just sets performance standards, both in terms of greenhouse gas emissions and other environmental variables that we care a lot about – water use, biodiversity, things like that. So the point is that we have to be tying incentives to real, delivered, measurable, verifiable, environmental performance.”
We can and must move beyond corn ethanol. The first step is putting an immediate end to the VEETC. The next is to begin rewarding producers for creating biofuels that protect our climate and natural resources.