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December 15, 2006

U.S. Congress Stands Behind Domestic Ethanol, Extends Tariff

Sioux Falls, South Dakota [RenewableEnergyAccess.com]

The American Coalition for Ethanol (ACE) praised the U.S. Congress for voting to stand behind domestic ethanol production and extend the secondary tariff on imported ethanol. The Omnibus Tax bill passed December 8 included a provision to extend the secondary tariff offset for ethanol through January 1, 2009.

Removing the tariff offset or not renewing it when it was set to expire on October 1, 2007, as some had suggested, would have had dire consequences for the U.S. ethanol industry.

"Congress has delivered a clear and powerful message that it is in the best interest of the United States to continue supporting the domestic ethanol industry," said Brian Jennings, ACE Executive Vice President. "This important action helps pave the way for continued growth and investment in rural communities and clean burning, homegrown, renewable fuel."

A secondary tariff of 54 cents per gallon has been in place for ethanol imports, a policy designed to offset the 51-cent per gallon blender's credit that is applied to ethanol no matter its country of origin. Removing the tariff offset or not renewing it when it was set to expire on October 1, 2007, as some had suggested, would have had dire consequences for the U.S. ethanol industry.

In addition to the tariff extension, the tax bill included a new incentive for ethanol plants, which utilize cellulosic feedstocks. New cellulosic ethanol facilities placed into service prior to January 1, 2013 will receive a provision for a 50 percent accelerated depreciation allowance.
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Reader Comments (1)
 
December 20, 2006
Brazil has a lot of rainforest to turn into cropland. Sugarcane has a net energy yield that is eight times greater than corn and about twice as high as cellulosic. An acre of farmland in Indiana costs about 3k, one in Amazonia, about a hundred bucks. It will be interesting to see how long the farm lobby can hold off such a cheap, carbon nuetral source of ethanol. Someday, we will be driving on ehthanol grown where there were once rainforest carbon sinks. That isn't a plug to keep the tariff in place, it is a a heads up that biofuels are going to continually put more pressure on carbon sinks (both rainforest and our own conservation reserves), like they don't have enough pressure already sustaining the human food chain, now they are being called upon to feed our cars.
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