Canadian Biomass Magazine

Loss of subsidy ends tough year for corn ethanol

December 30, 2011
By Scott Jamieson

Dec 30, 2011, Washington, DC - The United States has ended a 30-year tax subsidy for corn-based ethanol that according to an article in the Detroit News cost taxpayers $6 billion annually. It also ended a tariff on imported Brazilian ethanol.

Congress adjourned
for the year on December 23, failing to extend the tax break that's drawn a
wide variety of critics on Capitol Hill, including environmentalists, frozen food producers, ranchers and others.

subsidy has provided the oil and agribusiness industries with 45 cents
per gallon of ethanol blended into gasoline. By some estimates, Congress
has awarded $45 billion in subsidies to the ethanol industry since

Tom Buis, CEO of Growth Energy, an ethanol trade group, said earlier this month the industry would survive without the credit.

blenders' tax credit initially helped the ethanol industry develop. But
today, we don't have a production problem, we have a market access
problem," Buis said. "Without the tax credit, the ethanol industry
will survive; it will continue to reduce our dependence on foreign oil,
create jobs and strengthen our economy."


Ethanol supporters are
worried Congress might roll back a 2007 mandate that dramatically boosts
the use of ethanol annually through 2022. The mandate jumps from 15
billion gallons of renewable fuels — including cellulosic ethanol in
2015 — to 36 billion gallons by 2022. Read more here.

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