Study Shows Cost of Regulation Compliance

Ongoing verification of compliance could be costly.

Published on: Sep 23, 2009

A study commissioned by the National Corn Growers Association shows an up-front cost of $30 million for the Environmental Protection Agency to implement the expanded Renewable Fuel Standard. And, annually recurring compliance costs for producers could reach up to $420 million. Steve Ruh, chairman of NCGA's Ethanol Committee points out that higher costs for ethanol producers mean increased costs for corn growers.

 

If an acreage trigger approach were used by the EPA, the recurring costs would be minimal compared to ongoing verification. With corn yields on the rise, a shift in corn acreage above the 2007 crop trigger is not expected at this point, and the recurring costs would be $15 million per year.

 

Ruh pointed out that at the farm level, the cost of the new regulations will mainly take the form of extra management and recordkeeping time associated with the renewable biomass definition. It is also possible that in some geographic areas other costs will be forced down to the farmer level of the supply chain.