ARA Releases Study Examining the Effect Banning the Internal Combustion Engine Would Have on Biofuels

Earlier this week, the Agricultural Retailers Association (ARA), a member of the Transportation Fairness Alliance (as is Energy Marketers of America), released a new study indicating that a ban on internal combustion engines (ICE) would have a disproportionate effect on biofuels consumption and the U.S. economy. The study focuses on three scenarios for electric vehicle (EV) market penetration through 2050 and their impact on the biofuels market and economy.

The three scenarios are:

1. Base Case: EV market penetration increases to 13 percent of light-duty vehicle sales by 2050, following the Annual Energy Outlook 2020 Reference Case projections;

2. ICE Ban by 2050: EV market share reaches 100 percent of light-duty and freight vehicle sales by 2050 due to a ban on internal combustion engines (“ICE”); and

3. ICE Ban by 2035: EV market share reaches 100 percent of light-duty vehicle sales by 2035 and 100 percent of freight vehicle sales by 2040 due to a ban on internal combustion engines.

Importantly, the study found that “U.S. light-duty and freight vehicle consumption of ethanol and biodiesel could decline up to 90 percent to 1.1 billion gallons and up to 61 percent to 0.8 billion gallons,” depending on the different scenarios. The study also found that in addition to the harmful effects on the biofuels market, there would be a significant number of job losses. Further, “the economic losses throughout the biofuels value chain range from $105 billion to $185 billion, and cumulative federal, state, and local tax revenues losses range from $39 billion to $69 billion through 2050.” The study makes clear that a ban on ICE’s would negatively affect the biofuels industry, farming community and the overall U.S. economy.

Click here to view the full study.

From EMA