Chain restaurant lobbying group disappointed in EPA’s refusal to waive ethanol mandate

The National Council of Chain Restaurants expressed disappointment in the Environmental Protection Agency’s recent decision not to extend a waiver of the Renewable Fuel Standard for corn-based ethanol.

Congress authorized the EPA to issue a waiver of the standard if it is determined that the mandate’s implementation would cause severe economic harm or if there is a shortage of the prescribed fuels. The EPA has waived the mandate every year since the rule’s creation.

“We believe current circumstances resulting from the nation’s severe drought are precisely of the kind that Congress envisioned warranting a waiver under the law that created the RFS,” the NCCR said in an Oct. 5 letter to the EPA. “The economic damage wrought by the drought is exacerbated by the additional, artificial demand the RFS creates for corn.”

The NCCR noted the possibility of price increases for corn and other agricultural commodities.

“That the RFS mandate for corn-based ethanol has been a contributing factor in shocks to supply of corn and other grains is not in dispute—greater demand for corn has induced American farmers to plant more corn and less of other agricultural commodities, as would be expected in a market-driven environment,” the organization said. “As ethanol has taken a larger share of the nation’s corn output and the number of acreage devoted to grain crops has remained relatively static based on available land, the price per bushel of corn has spiked in recent years.”

Additionally, the NCCR said that supply shocks and price increases have had dramatic effects on the American food industry.

“Not only have these higher food prices affected the grocery bills of every American consumers; they have also impacted other stakeholders in the U.S. food system,” the NCCR said. “As major purchasers of a wide range of agricultural commodities, chain restaurant companies have faced higher food costs.”

The group added said that the mandates are “unjustified given current drought conditions and the severe economic damage that has been suffered by animal agriculture producers, all other non-corn agricultural growers and major stakeholders in the U.S. food system including the chain restaurant industry.”