biofuel subsidies

Ten Most Distortionary Energy Subsidies - Update (long version)

Complex security, environmental, and economic trade-offs remain the norm for the energy sector.   Government intervention is also the norm, and too often involves a torrent of energy plans, white-papers, and legislation.  In an ideal world, government policies should work in tandem with market forces to achieve an adequate energy supply mix that is cleaner and more diverse than what preceded it.  These synergies do not currently exist.  Instead, there are thousands of government energy market interventions in place around the world - many of which act counter to stated energy securi

Ten Most Distortionary Energy Subsidies - Update (short version)

Complex security, environmental, and economic trade-offs remain the norm for the energy sector.   Government intervention is also the norm, and too often involves a torrent of energy plans, white-papers, and legislation.  In an ideal world, government policies should work in tandem with market forces to achieve an adequate energy supply mix that is cleaner and more diverse than what preceded it.  These synergies do not currently exist.  Instead, there are thousands of government energy market interventions in place around the world - many of which act counter to stated energy security, dive

The EU Biofuel Policy and Palm Oil: Cutting subsidies or cutting rainforest?

The EU biofuels industry has increased its use of palm oil by 365 per cent over 2006-2012, from 0.4 to 1.9 million tonnes per year. The additional demand can be linked primarily to the growth in biodiesel production stimulated by government policies (primarily purchase mandates) during the same period. The increase in palm oil consumption in the biofuels sector has amounted to 1.6 million tonnes, or 80 per cent of the total increase in palm oil consumption in Europe (1.9 million tonnes) over 2006-2012.

Subsidized biofuels and energy security in a time of crop failures

It's an interesting time to watch biofuels markets.  A couple of years ago, with commodity prices spiraling, there was great concern that fuel markets were outbidding food and feed markets for edible biomass.  Now, reporter Judy Keen notes that the United States is facing drought in nearly 80 percent of the country's corn-growing area; and more of the country's landmass is facing drought than any time since 1956.

Biofuel at $59 per gallon in the US Air Force

A large portion of the spending to develop alternative energy options for the military makes sense.  Delivering fuels to the front lines costs dramatically more than the raw cost of the fuel itself.  Military assessments estimate that the delivered cost of a mission-ready gasoline is almost always higher than $15 per gallon and routinely $20 or $40/gallon.  In extreme cases, such as when jet fuel need to be flown in to remote locations, the cost can be as high as

Biofuels trade press acknowledges excise tax credits duplicate renewable fuel standards

During the early part of 2010, when the volumetric ethanol excise tax exemption (VEETC) looked like it was heading towards elimination, ethanol industry contortionist Bob Dinneen of the Renewable Fuels Association worked hard to paint the subsidy as vital to all things American.  In yet another RFA-sponsored study by the industry's favored economist John Urbanchuk, RFA set out to quantify the bad things that would happen if VEETC expired.  They came up with quite a list, summarized by

Using Biofuel Tax Credits to Achieve Energy and Environmental Policy Goals

The federal government supports the use of biofuels—transportation fuel produced usually from renewable plant matter, such as corn—in the pursuit of national energy, environmental, and agricultural policy goals. Tax credits encourage the production and sale of biofuels in the United States, while federal mandates specify minimum amounts and types of biofuel usage each year through 2022. Tax credits effectively lower the private costs of producing biofuels relative to the costs of producing their substitutes, gasoline and diesel fuel.

Biofuels and the need for additional carbon

Use of biofuels does not reduce emissions from energy combustion but may offset emissions by increasing plant growth or by reducing plant residue or other non-energy emissions. To do so, biofuel production must generate and use ‘additional carbon’, which means carbon that plants would not otherwise absorb or that would be emitted to the atmosphere anyway. When biofuels cause no direct land use change, they use crops that would grow regardless of biofuels so they do not directly absorb additional carbon.

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