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

Authors: Doug Koplow

Addresses: Earth Track, Inc., 2067 Massachusetts Ave., 4th Floor, Cambridge 02140, MA, USA

Abstract: 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.

Keywords: biofuel subsidies; corn ethanol; cellulosic; biodiesel; RFS; renewable fuel standard; mandates; VEETC; volumetric ethanol excise tax credit; bioenergy; biofuels; federal subsidies; state subsidies; government subsidies; USA; United States; alternative fuels; alternative propulsion.

DOI: 10.1504/IJBT.2009.028102

International Journal of Biotechnology, 2009 Vol.11 No.1/2, pp.92 - 126

Published online: 05 Sep 2009 *

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