The U.S. Senate has agreed to a tax policy package that includes a one-year extension of the Volumetric Ethanol Excise Tax Credit at its current level of $0.45 per gallon.
This move comes shortly after the Senate defeated a similar package that would have extended the VEETC through 2011 but reduced it by 20%, to $0.36 per gallon.
In response to the vote, a multi-industry coalition representing the food industry, animal agriculture, environmental groups and budget watchdogs released a statement expressing their concerns. “The Senate’s decision to accept a deal to extend for another year the outdated and unnecessary subsidies for the corn ethanol industry is outrageous and shortsighted," said the coalition statement. "Now it’s time for the House of Representatives — especially the Leadership and the House negotiators on the tax package — to stand up and say no to extending federal corn ethanol subsidies. The federal government should not waste another $6 billion on this needless subsidy. It is bad for the environment, food producers, farmers and consumers. And at a time when the budget deficit and national debt have reached a crisis level, bad for the nation’s long-term fiscal health. Enough.”
Members of the coalition are also concerned about sustainability. "Burning a substantial portion of our food and feed as fuel is not a sustainable answer, in the long term, to solving this nation's fuel needs," said J. Patrick Boyle, president and CEO of the American Meat Institute. "Continuing to divert a significant portion of our corn crop into our fuel tanks will continue to increase costs for the meat and poultry industry and will result in higher food prices for consumers."
The coalition has said that it plans to keep a close eye on further developments regarding the tax credit.