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Bill extends ethanol tax credit

The National Corn Growers Association has thanked Iowa Sen. Charles Grassley and North Dakota Sen. Kent Conrad for their introduction of The Grow Renewable Energy from Ethanol Naturally Jobs Act of 2010, or the GREEN Jobs Act of 2010.

Additional co-sponsors on the bill include South Dakota Sen. John Thune, Nebraska Sen. Ben Nelson, Nebraska Sen. Mike Johanns and South Dakota Sen. Tim Johnson. The legislation mirrors H.R. 4640, the Renewable Fuels Reinvestment Act, introduced by North Dakota Rep. Earl Pomeroy and Illinois Rep. John Shimkus in March.

“NCGA appreciates the dedication Senators Grassley and Conrad have to the renewable fuels industry and their continued commitment to American agriculture,” said Darrin Ihnen, NCGA President and Hurley, South Dakota grower. “We are pleased to see that both the House and Senate understand how important the tax credit is to our industry. We look forward to working with them to pass this legislation.”

Specifically, the Senate legislation would extend the 45 cents-per-gallon ethanol blenders tax credit and the 54 cents-per-gallon ethanol import tariff for five years, to the end of 2015. Both provisions are slated to expire at the end of this year. The bill would also extend the $1.01 per gallon cellulosic ethanol production tax credit until the end of 2015.

According to recent reports by the Renewable Fuels Association and Growth Energy, if the ethanol blenders credit is not extended, thousands of jobs directly involved with the ethanol industry — a majority of them in rural America — would be lost due to a lowered demand for ethanol. Notably, these studies show domestic ethanol production would decrease by roughly 4 billion gallons, which is equivalent to closing two out of every five ethanol plants operating today. This would also potentially lower corn prices by roughly 8 percent, $0.30 per bushel, due to lower demand.

In 2009, the ethanol industry returned $3.4 billion to the Federal Treasury than the cost of the ethanol blenders tax credit. This figure also does not take into account additional positive returns in the form of increased state and local taxes, increases in household income and savings resulting from decreased oil imports.

Removal of the secondary tariff on foreign-produced ethanol would result in increased dependence on imported fuels. Similarly, if the secondary tariff is not extended, 28 states would see drastic economic loss, including Iowa, Illinois, Nebraska, Minnesota, Indiana and South Dakota.

TAGS: Corn
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