Biofuels trade groups agree on sunset for ethanol tax credit

Biofuels Digest
Jim Lane March 22, 2011

In Washington, Rachel Gantz of OPIS is reporting that leaders of the Renewable Fuels Association, Growth Energy, the American Coalition for Ethanol and the National Corn Growers Association have agreed to a three-year sunsetting of the Volumetric Ethanol Excise Tax Credit (VEETC).

They propose to replace the VEETC, in year four, with a variable credit tied to the price of oil, plus a requirement that 40 percent of all US cars be flex-fuel enabled and that a dedicated fund be set up to provide assistance for blender pump deployment. The proposed credit which would act like a “floor price” for ethanol, would provide assistance when oil prices are low, and eliminate that assistance when oil prices are high.

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