A Tragic Tale of Corn and Congress
Ever since Iowa landed the privilege of holding the first Presidential primary, no candidate has the political courage to confront the $11 billion subsidy price tag of US corn ethanol. Everyone agrees we need to dilute our supply and price vulnerability in transportation fuels and everyone agrees we need to decarbonize the transport sector. But surely not this way.
There is no environmental justification for corn ethanol if net carbon savings are counted across the entire range on inputs of the final product - including alternative land use. And by most calculations, the few tons of CO2 saved probably cost tax payers over $700 per ton. Maybe the learning experiences of handling biofuels, blending, combustion technologies and infrastructure will help us move on to second generation biofuels. But does our apprenticeship have to be so expensive and damaging? It is hard to balance a budget this way.
Forty percent of the world’s corn is grown in the US and 40% of that goes into producing ethanol. America’s livestock now consume less corn that America’s alambics. Meanwhile, the price of corn has doubled to nearly $8.00 a bushel in a year which aggravates a food crisis that is visible every night on the television. America’s corn ethanol program does not cause the hunger around the world - but its impact on grain markets certainly makes hunger harder to resolve. Of course starving Africans don’t vote in the US.
Even Brazil has understood that if food conversion to ethanol starts to impair broader welfare through price inflation, it’s time to cut back on support for the scheme. Ironically, reduced production of sugar-based ethanol in Brazil is being compensated by exports of subsidized US corn-based ethanol from the US. Fortunately for US producers, the US only has an import duty of 54 $cents on alcohol, but no export levy.
No one believes for a moment that the US will scrap its corn ethanol program and save the whole $11 billion in subsidies, but at a minimum the program is over-subsidized. It cannot be justified on energy policy grounds or environmental policy grounds. So if it’s only real justification is political, it is time to restore corn to the food chain. The US Senate seems to know this. The Obama Administration should seize the opportunity to undo this program.
Also available in:
Regions and themes
Share
Related centers and programs
Discover our other research centers and programsFind out more
Discover all our analysesThe Aluminum Value Chain: A Key Component of Europe’s Strategic Autonomy and Carbon Neutrality
The United States of America (US), Canada and the European Union (EU) all now consider aluminum as strategic. This metal is indeed increasingly used, especially for the energy transition, be it for electric vehicles (EVs), electricity grids, wind turbines or solar panels.
The EU Green Deal External Impacts: Views from China, India, South Africa, Türkiye and the United States
Ahead of June 2024 European elections and against the backdrop of growing geopolitical and geoeconomic frictions, if not tensions, between the EU and some of its largest trade partners, not least based on the external impacts of the European Green Deal (EGD), Ifri chose to collect views and analyses from leading experts from China, India, South Africa, Türkiye and the United States of America (US) on how they assess bilateral relations in the field of energy and climate, and what issues and opportunities they envisage going forward.
Electric Vehicles: A Strong and Still Understated Performance
Electric vehicles (EVs) are better for the climate – even in worst-case scenarios. Across its life cycle, a typical European electric car produces less greenhouse gas (GHG) and air pollutants or noise than its petrol or diesel equivalent. Emissions are usually higher in the production phase, but these are more than offset over time by lower emissions in the use phase. According to the European Environment Agency’s report on electric vehicles, life cycle GHG emissions of EVs are about 17-30% lower than those of petrol and diesel cars.
How Can the Green Deal Adapt to a Brutal World?
The European Green Deal has not been planned for the current extraordinarily deteriorated internal and external environment. Russia’s war in Ukraine, higher interest rates, inflation, strained public finances, weakened value chains, and lack of crucial skills pose unprecedented challenges.