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Senate Republicans' Climate-Wrecking Corn Ethanol Payout
By now most observers are aware that Donald Trump’s Big Beautiful Bill Act will gut most of President Biden’s climate program. The vast subsidies for solar, wind, batteries, and electric vehicle production and deployment in the Inflation Reduction Act will be rapidly phased out; as a result, American manufacturing will take a severe hit, and China will be left to dominate the industries of the 21st century.
However, a few scraps of the program remain in BBB, and one would even be greatly expanded: the biofuels credit. Republicans would just make it much worse, to the point that the effect on the climate will likely be negative.
The biofuel credit, called 45Z, was built on the foundation of the Renewable Fuels Standard, created by the Energy Policy Act of 2005. The original idea was to cut down on greenhouse gas emissions by requiring the use of various biofuels for transportation and heating (and, not coincidentally, hand out gobs of cash to farm states like Iowa, a place which is kind of critical in presidential elections). Since these are created from plants that pull carbon out of the atmosphere, rather than digging up oil from the ground, it was thought this would cut emissions.
Though the RFS, as implemented by the Environmental Protection Agency, had various standards for different kinds of biofuels (such as cellulosic and advanced varieties), mainly it led to an explosion of farming corn and soybeans to be rendered into ethanol, which increased by about 500 percent between 2005 and today. As the World Resources Institute details, about 30 million acres of farmland—roughly the size of New York state—is now used just for corn ethanol, while about 40 percent of U.S. soybeans go to make biodiesel. Despite that gigantic footprint, corn ethanol only accounts for about 4 percent of American transportation fuels, and soybean biodiesel less than 1 percent.
Unfortunately, the original RFS did not account for land use changes in its formula for greenhouse gas emissions. Later studies confirmed that this more than cancels out any climate benefit. Corn ethanol is likely at least 24 percent more emissions-intensive than regular gasoline, according to one study.
However, a few scraps of the program remain in BBB, and one would even be greatly expanded: the biofuels credit. Republicans would just make it much worse, to the point that the effect on the climate will likely be negative.
The biofuel credit, called 45Z, was built on the foundation of the Renewable Fuels Standard, created by the Energy Policy Act of 2005. The original idea was to cut down on greenhouse gas emissions by requiring the use of various biofuels for transportation and heating (and, not coincidentally, hand out gobs of cash to farm states like Iowa, a place which is kind of critical in presidential elections). Since these are created from plants that pull carbon out of the atmosphere, rather than digging up oil from the ground, it was thought this would cut emissions.
Though the RFS, as implemented by the Environmental Protection Agency, had various standards for different kinds of biofuels (such as cellulosic and advanced varieties), mainly it led to an explosion of farming corn and soybeans to be rendered into ethanol, which increased by about 500 percent between 2005 and today. As the World Resources Institute details, about 30 million acres of farmland—roughly the size of New York state—is now used just for corn ethanol, while about 40 percent of U.S. soybeans go to make biodiesel. Despite that gigantic footprint, corn ethanol only accounts for about 4 percent of American transportation fuels, and soybean biodiesel less than 1 percent.
Unfortunately, the original RFS did not account for land use changes in its formula for greenhouse gas emissions. Later studies confirmed that this more than cancels out any climate benefit. Corn ethanol is likely at least 24 percent more emissions-intensive than regular gasoline, according to one study.
https://prospect.org/politics/2025-06-25-beautiful-bill-ethanol-biofuel-subsidies-climate/
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