Blog: Dean BestWill Washington waver on biofuels?

Dean Best | 25 June 2008

All eyes – at least among food suppliers in the US – are now on the country’s environment agency, as the debate over Washington’s biofuels policy heats up.

The US Environmental Protection Agency (EPA) is mulling whether to allow Texas to waive half its commitment to the Renewable Fuels Standard (RFS), which lays down how much corn the state should put aside for biofuels this year.

Texas, backed by presidential hopeful John McCain, argues that the mandatory use of corn for biofuels is driving up the cost of corn for swathes of the food industry – and driving up food prices for consumers.

Texas Governor Rick Perry stepped up his campaign yesterday (24 June) arguing that the RFS was hitting the food industry hard. “It is doing more harm than good and must be modified before our livestock industry suffers permanent damage,” Perry warned.

US bakers have joined meat processors in backing Perry but there are whole sections of US agriculture who want the EPA to stand firm.

The American Farm Bureau Federation (AFBF), for instance, insists that there is no link between the RFS and the pain felt in the livestock sector due to higher corn prices.

“If EPA sends a signal that the government is not fully committed to implementing the RFS – by wavering at the first hint of an increase in price regardless of whether the RFS is the cause or the severe harm standard has been satisfied – the investment markets could react and thus jeopardise the ability to meet the goals of the legislation,” the AFBF said.

The EPA will make its decision by 24 July. It will surely be a contested one.


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