The proposal has to go through the House of Representatives, with Democrats nail Obama for agreeing with the Republican tax cuts, but it is not likely to aid cut of 45 cents per gallon (4.5 liters) of ethanol now extended. The food industry, farmers and environmentalists do not look kindly on the measure, and ethanol producers forward to do battle to keep it beyond 2011.
It will be difficult beyond 2011 are maintained 45 cents per gallon to 54 cents per gallon tariff on ethanol imports, but from associations of producers, Energy Growth, argue that the establishment of other support programs, such as The Fueling Freedom, designed to improve and expand infrastructure and logistics and distribution of ethanol blends in gasoline. On the other hand, are confident that the Environmental Protection Agency (EPA) will soon approve the use of E15 (15% ethanol and 85% gasoline) in cars manufactured before 2006 .
The vote in the Senate to temporarily extend aid to 2011 he won a large majority (81 votes to 19), but some of the most critical voices were heard from the Democratic ranks. California Sen. Dianne Feinstein proposed an amendment that was rejected, in which he raised a reduction of the tax credit to 36 cents. In comments reported by Reuters, Feinstein said that “the incentives to ethanol will cost 7,000 million dollars, while the proposed amendment that would have saved 2,000 million dollars.”
Save jobs and provide stability to the market
Both Sen. colleagues as opposed to the extension of aid argue that there is no need for subsidies and that current laws guaranteeing renewable fuels a market share (8.25% in 2010). The producers of biofuels, which also saw as approving the extension of incentives for biodiesel (1 dollar per gallon for small producers) applauded the measures. Bob Dinneen, president of the Renewable Fuels Association, told Reuters that “the extension of these incentives is key to U.S. ethanol production and help save jobs and provide market stability for the industry to keep growing.”
In addition, Reuters also reflected the uneasiness of the food industry, farmers and environmentalists, who are fighting for an end to ethanol subsidies. Among other reasons, they argue that increases the cost of feeding livestock and intensive use of fertilizers and pesticides damage the soil of agricultural land. About 40% of corn produced in the United States intended to ethanol plants, which now exceed 200.
Almost parallel to the vote in the Senate, a federal appeals court this week rejected a challenge to the oil companies and refineries United States against the retroactivity of the levels of mixtures of ethanol and sales volume of total EPA approved gasoline by 2010. The oil companies argued that federal law requires EPA to set each November 30 the amount of ethanol that must complete the sale of gasoline in the U.S. for the next year, and that calculation was made on 26 March 2010, nearly four months later. In its ruling, the court held that the oil companies and refineries have had ample time to meet the obligations.