Presentation by Terry Dinan, Senior Adviser in CBO’s Microeconomic Studies Division, and by David Austin and Ron Gecan, who are Principal Analysts in that division.
Summary
The Renewable Fuel Standard (RFS) establishes minimum volumes of various types of renewable fuels that suppliers must blend into the United States’ supply of fuel for transportation. Those volumes—as defined by the Energy Independence and Security Act of 2007 (EISA)—are intended to grow each year through 2022. In recent years, the requirements of the RFS have been met largely by blending gasoline with ethanol made from cornstarch. In the future, EISA requires the use of increasingly large amounts of “advanced biofuels,” which include diesel made from biomass (such as soybean oil or animal fat), ethanol made from sugarcane, and cellulosic biofuels (made from converting the cellulose in plant materials into fuel).
Policymakers and analysts have raised concerns about the RFS, including whether complying with the standard will be feasible, whether it will increase prices for food and transportation fuels, and whether it will lead to the intended reductions in greenhouse gas emissions. Because of those concerns, some policymakers have proposed repealing or revising the Renewable Fuel Standard.