Restaurant industry groups support renewable fuel standard reform

April 11, 2013

Four Congressmen introduced the Renewable Fuel Standard Reform Act this week, bipartisan legislation aimed at reducing food costs by eliminating the conventional biofuels mandate and prohibiting the use of corn-based ethanol.

The legislation also reduces the total size of the RFS and restricts the standard to only being met through the use of renewable biomass and other advanced biofuels. It was introduced by Congressmen Bob Goodlatte, Jim Costa, Steve Womack and Peter Welch.

The legislation was lauded by restaurant industry groups, including the National Restaurant Association and the National Council of Chain Restaurants.

"Food costs are a top business challenge for the restaurant industry, which operates on razor-thin margins," said Scott DeFife, executive vice president, Policy & Government Affairs, NRA. "The Renewable Fuel Standard Reform Act would benefit consumers, businesses and the overall economy by helping to lower these costs."

In a letter to bill sponsors, the NRA noted that wholesale food costs have increased nearly 30 percent in the last six years. The association attributed this rise in costs to the RFS's corn-based ethanol mandate, highlighting the fact that 40 percent of U.S. corn crops were devoted to fuel production, rather than food or feed, last year.

NCCR Executive Director Rob Green also released a statement supporting the repeal of the federal RFS, saying: "As long as the RFS mandate is law, it will continue to adversely affect America's chain restaurants, their small business franchisees and their customers. NCCR applauds Chairman Goodlatte and Reps. Womack, Costa and Welch for introducing legislation to overhaul the RFS and for working to bring common, economic sense back into the discussion on ethanol and the RFS."

NCCR recently commissioned a study by PwC that found federal mandates on corn-based ethanol raise prices and costs for chain restaurants on a variety of inputs and commodities. The report concluded that if the RFS mandate and ethanol requirements were left unchanged it would increase chain restaurant industry costs by up to $3.2 billion a year, each year the RFS remains in effect.

Green went on to call the current mandate "arbitrary" and "artificial."

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