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Last update : 28.10.2010

The U.S. federal government supports the use of biofuels — transportation fuels produced mainly from renewable plant matter, such as corn — in the pursuit of national energy, environmental, and agricultural policy goals. Tax credits encourage the production and sale of biofuels in the United States, effectively lowering the private costs of producing biofuels, such as ethanol or biodiesel, relative to the costs of producing their substitutes—gasoline and diese fuel. In addition, federal mandates require the use of specified minimum amounts and types of biofuel each year through 2022. Together, the credits and mandates increase domestic supplies of energy and reduce U.S. emissions of greenhouse gases, albeit at a cost to taxpayers. This Congressional Budget Office (CBO) study, which was prepared at the request of the Chairman of the Subcommittee on Energy, Natural Resources, and Infrastructure of the Senate Committee on Finance, assesses the incentives provided by the biofuel tax credits for producing different types of biofuels and analyzes whether they favor one type of biofuel over others. In addition, the study estimates the cost to U.S. taxpayers of reducing the use of petroleum fuels and emissions of greenhouse gases through those tax credits; it also analyzes the interaction of the credits and the biofuel mandates. In keeping with CBO’s mandate to provide objective, impartial analysis, the study contains no recommendations.

Added on 19 July 2010
Politics :: Legislation :: Economy :: Bioethanol :: Biodiesel :: Climate :: United States & Canada

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