Advertise in Print | Subscriptions
Published December 03, 2012, 09:59 AM

Study estimates RFS impact

A study released by the National Council of Chain Restaurants found that the U.S. Environmental Protection Agency’s Renewable Fuel Standard mandate has a multibillion-dollar negative effect on its industry, commodity prices and the food supply chain.

By: Agweek staff report, Agweek

WASHINGTON — A study released by the National Council of Chain Restaurants found that the U.S. Environmental Protection Agency’s Renewable Fuel Standard mandate has a multibillion-dollar negative effect on its industry, commodity prices and the food supply chain.

But the Renewable Fuels Association released a statement the same day the report was released, saying the NCCR is rolling out a campaign of “scare tactics and half-truths.”

“The use of corn-based ethanol required by the federal Renewable Fuel Standard mandate has dramatically distorted the market and increased costs throughout the food supply chain,” said Rob Green, NCCR executive director. “The RFS has had an adverse effect on the chain restaurant industry, which has witnessed marked increases in commodity prices and associated costs to the tune of billions of dollars a year.”

But the RFA said NCCR managed to avoid any discussion of what “really drives food prices — energy costs.”

Several organizations had asked EPA to waive the RFS, but the request was denied in November.

The study, conducted by Pricewaterhouse Coopers, concluded that the RFS mandate could cost chain restaurants up to $3.2 billion annually with quick-service restaurants witnessing cost increases up to of $2.5 billion, and full-service restaurants seeing increases up to $691 million.

“The federal RFS mandate is essentially an ethanol tax on consumers and should be repealed,” Green said.

“Clearly, Big Food and Big Oil are on the defensive,” said Bob Dinneen, president of the RFA. “They lost in their bid for a waiver of the RFS, so now they are resorting to super-sized myths about the impact of the RFS on food prices. Every reasonable analysis of the factors influencing food prices has concluded that the cost of diesel fuel, gasoline and other energy inputs is the major driver. This study conveniently avoids that issue. The bottom line is the RFS is working. Renewable fuels have already displaced 10 percent of annual gasoline demand and dramatically lowered fuel costs for all Americans.”

Tags: