Renewal of Ethanol Tax Credit Vital to U.S. Producers, Says Dinneen

The U.S. ethanol industry managed to survive an economic recession, a loss of credit, bankruptcies and challenges to its greenhouse gas emissions standing in 2009. But the industry may face its biggest challenge yet at the end of 2010 when the blenders' tax credit expires, according to Renewable Fuels Association President Bob Dinneen.

The U.S. ethanol industry managed to survive an economic recession, a loss of credit, bankruptcies and challenges to its greenhouse gas emissions standing in 2009. But the industry may face its biggest challenge yet at the end of 2010 when the blenders' tax credit expires, according to Renewable Fuels Association President Bob Dinneen.

Speaking at the recent annual RFA national ethanol conference, Dinneen said nothing is more important to the ethanol producers this year than "extending the tax credit that has made this industry." He noted that producers only need to look at the recent experience of the U.S. biodiesel industry to see that nothing can be taken for granted.

The $1 tax credit for biodiesel producers expired Dec. 31, leading to widespread plant shutdowns, Dinneen notes. There is some anxiety that if the ethanol tax credit is allowed to expire next Dec. 31, the domestic ethanol industry would suffer a similar fate.

Meanwhile, Senate Finance Committee ranking member Chuck Grassley (R-Iowa) says there is no timetable for reviving the biodiesel tax credit now that Senate Democratic leadership has dropped it from a jobs bill. He did tell reporters that an extension of the biodiesel subsidy could be added to an energy bill that the Senate may consider later this year, or dealt with when the Senate debates the future of the estate tax. "Who knows when they are going to get passed?" Grassley asked rhetorically.

The next target for dealing with the biodiesel credit could be the Easter congressional recess, he said. The Easter recess is scheduled to begin Monday, March 29 and run through Friday, April 9.

Recesses tend to serve as deadlines for lawmakers to act on bills. The biodiesel industry had hoped Congress would reinstate the tax credit this month.

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