The National Council of Chain Restaurants has released a report concluding that continued imposition of ethanol requirements under the Renewable Fuel Standard (RFS ) could purportedly cost restaurant chains up to $3.2 billion annually. Prepared by PricewaterhouseCoopers LL P, the November 2012 report cites evidence that current ethanol production is significantly greater than anticipated when the standards were enacted. “As recently as 2004, the U.S. Energy Information Administration was projecting that total corn ethanol used for gasoline would only reach 3.5 billion gallons by 2012. The most recent projections show ethanol use reaching 14.5 billion gallons in 2012, an increase of 300 percent.”
The report projects the cost of the RFS in 2015 based on two scenarios. In the first, effects of the RFS mandate are expected to increase corn prices by 27 percent, which would increase total costs for chain restaurants by $3.2 billion. In the second, corn prices are estimated to increase by 4 percent, resulting in a $503-million cost increase.