Ethanol groups agree on game plan to extend tax incentives

By Sara Wyant

© Copyright Agri-Pulse Communications, Inc.

Washington, Oct. 6 - Getting Congress to renew any type of biofuel tax incentive before year end will be an uphill battle, and the climb even tougher when there is disagreement in the ranks about the best path forward. As Ben Franklin once said: “We must, indeed, all hang together, or most assuredly we shall all hang separately.”

After a series of meetings on Capitol Hill, the nation's four leading ethanol advocates may finally be taking Franklin's words to heart. In a document obtained by Agri-Pulse, the American Coalition for Ethanol, Growth Energy, the National Corn Growers Association and the Renewable Fuels Association appear to agree on a one-year extension of the Volumetric Ethanol Excise Tax Credit (VEETC), better known as the blenders credit, which gives 45 cents to blenders for every gallon of ethanol mixed into gasoline.

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Earlier this year, Growth Energy announced support for letting the 45-cent-per-gallon tax credit expire, investing that money in building ethanol pipelines and other parts of the new renewable energy infrastructure - if there was more market access for ethanol.

But now, the four groups have agreed to a broad outline and framework that will be principles for a long-term policy road map for ethanol, even though there are not many published specifics beyond the one-year VEETC extension and continuation of the ethanol tariff.

“We are working with members of Congress at this time to explore details and options,” the document notes.

In addition to pushing for an extension of ethanol tax incentives before they expire at the end of this year, the groups agreed to:

Encourage efforts to grow the ethanol industry going forward in order to address a range of challenges and opportunities that the industry is facing. Specifically these include:

  1. Accelerate the deployment of Flexible Fuel Vehicles (FFVs) and blender pumps to allow market access and a level playing field for ethanol while reducing reliance on foreign oil

  2. Return long-term policy certainty to the ethanol industry to stimulate investment, rural development, and job creation

  3. Reward energy efficient technologies and practices that reduce greenhouse gas emissions at ethanol production facilities so that sustainability helps define the future of ethanol.

Growth Energy CEO Tom Buis told Agri-Pulse that “We have agreed on a broad set of principles to take a look at and that's still a work in progress.” He said that as for the one-year extension of VEETC and the ethanol tariff specifically, “I think that is included in everybody's principles.”

Renewable Fuels Association Communications Director Matt Hartwig adds that “extending the tax incentive is critical. Allowing it to expire would make efforts to enhance and/or even reinstate it next year all that much more difficult. Many voices can make for a beautiful choir.”

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