The Agricultural Retailers Association (ARA) has just released a study on the impacts of increased electric vehicle penetration on U.S. biofuels, agriculture and the economy. Proposals to ban internal combustion engine vehicles by 2035 and 2050 served as the economic models for the study, along with a base case provided by the U.S. Energy Information Administration’s Annual Energy Outlook.
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, respectively.
Corn and soybean consumption could decrease by up to 2.0 billion bushels and up to 470 million bushels, respectively. Corn prices fall up to 50 percent to $1.74 per bushel, while soybean prices fall up to 44 percent to $4.92 per bushel.
Overall, U.S. net farm income would decrease by up to $27 billion due to a proposed ban.
This study makes clear that an internal combustion engine vehicle ban could devastate the agriculture community. Proposals that seek to rush this ban to 2035 have the most severe impacts, but any ban results in dramatic decreases in ethanol, biodiesel, corn and soybean prices, and demand for fertilizer and other agricultural products. These are burdens carried disproportionately by the agriculture community.
The study found that 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.
Richard Gupton, ARA Senior Vice President Public Policy & Counsel, talks about the study in this interview.
ARA gas car ban study (4:21)