July 15, 2010

Ethanol Industry Groups At Odds Over Ethanol Tax Credit

Growth Energy, a coalition of U.S. ethanol supporters, today called for the redirection and eventual phasing out of government support for ethanol in return for a level playing field – infrastructure investments that will create competition in the fuels market and give consumers true freedom to choose their fuel.

The “Fueling Freedom” plan calls for the phasing out of current ethanol supports over time, by redirecting a portion of those funds to build out the infrastructure for the distribution and use of ethanol, and shifting the remaining portion away from the oil companies to opening the market. The primary elements of the plan include:

  • Funds currently going to the oil industry as an incentive for blending ethanol into gasoline (the VEETC) would be redirected to provide backing for the build out of distribution infrastructure for ethanol – such as tax credits for retailers to install 200,000 blender pumps and federal backing of ethanol pipelines. This will provide Americans the access to choose ethanol in an open and free market, and would allow for the elimination of the tax supports over time in exchange for that level playing field.
  • Requiring that all automobiles sold in the U.S. be flex-fuel vehicles – as many as 120 million. This requires no additional cost to taxpayers and a minimal cost (about $120 per vehicle) to vehicle manufacturers.

Growth Energy’s Fueling Freedom plan, once implemented, would build out the infrastructure in the United States to create a path that leads to a genuinely free market – an open market that is free of government supports. Redirecting monies currently paid to oil companies to blend ethanol into gasoline toward infrastructure improvements would enable consumers to choose between gasoline and renewable, homegrown ethanol.

Other industry groups have come out in support of an extension of the current tax credits.

The American Coalition for Ethanol, the American Farm Bureau Federation, the National Corn Growers Association, the National Sorghum Producers, and the Renewable Fuels Association today reaffirmed their support for two identical pieces of legislation that would extend current ethanol tax incentives through 2015.

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