State and federal subsidies to biofuels: magnitude and options for redirection


Hundreds of government subsidies have fuelled the growth of ethanol and biodiesel in the USA, worth half or more their retail price. Cumulative costs under some mandate proposals exceed $1 trillion by 2030. Even using favourable assumptions, reduced greenhouse gas emissions from biofuels are far more expensive than other options: more than $100/mt CO2e even for cellulosic ethanol and nearly $300/mt CO2e for corn-based fuel. Despite rising concerns, environmental screens in existing subsidy policies remain weak or non-existent. A platform- and fuel-neutral policy structure forcing all alternatives to conventional fuels to compete for market share should be deployed instead.

Posted with permission of the International Journal of Biotechnology, Inderscience Enterprises, Ltd.   The article was included in a IJBT's Special Issue on the Future of Biofuels and National Energy Strategy: a US Perspective, edited by Calestous Juma, C. Ford Runge, and Robbin Johnson.  The other papers in the issue are also likely to be of interest to individuals tracking biofuels policy.  A listing is accessible here.   Read the journal introduction here.