Senate Finance Chairman Charles Grassley is calling attention to the Export-Import Bank of the United States' decision to approve $9.6 million in taxpayer-guaranteed credit insurance to help establish an ethanol project in the Caribbean.
Not just any ethanol project though. Grassley notes that this project will process Brazilian ethanol for export to the United States and compete with U.S. ethanol producers.
"For a number of reasons, I fail to see how the Export-Import Bank could justify the financing of this project," Grassley says. "In effect, the Export-Import Bank financed a project whose sole purpose is to process Brazilian ethanol for export to the United States duty-free in direct competition with Iowa and U.S. ethanol producers."
Grassley wrote to the Export-Import Bank asking for an economic analysis of its role in the Brazilian project within 30 days, a hold on further funding for this or similar projects until this economic impact analysis is complete, and to be advised of any pending or future ethanol-related facilities that the Export-Import Bank is considering financing.
Grassley also says he plans to pursue legislation through the appropriations process to bar the Export-Import Bank from funding similar ethanol projects in the future.
In July, the senator also introduced legislation (S. 2762) that would prohibit ethanol from getting duty-free access through the Caribbean Basin Initiative trade preference program unless the ethanol is produced substantially with inputs from the Caribbean Basin nations. The purpose of this legislation is to close the loophole in the Caribbean Basin Initiative that enables companies such as Angostura Limited to transship Brazilian ethanol to the United States duty-free.