A compromise was reached on expiring Bush-era tax cuts that will include an extension of the tax credit for ethanol use, colloquially known as VEETC.
The compromise legislation would extend the current tax credit through 2011 at the current rate of 45 cents per gallon. Additionally, the package with also extend the offsetting tariff on imported ethanol through 2011. Both policies are set to expire at year's end.
"Continuing to invest in our domestic ethanol industry is a proven method to create jobs and spur innovation and economic opportunity all across America," said Renewable Fuels Association President and CEO Bob Dinneen.
"While this legislation is not as long as we had hoped, it is a common sense approach that will ensure American ethanol production continues to evolve and new technologies commercialized. We urge Congress to move expeditiously to pass the legislation. Then, honest and good faith discussions about how we reform all energy tax policy - including for all oil and ethanol technologies - can occur."
Extending VEETC has been the top legislative priority of the RFA and its members. The RFA identified the issue early this year in working with members of Congress to introduce a bill that would extend all current tax incentives for ethanol, including VEETC, at their current levels through 2015.
"Ethanol producers greatly appreciate the determination of those members of Congress who worked tirelessly to continue America's investment in ethanol production," said Chuck Woodside, RFA Chairman and CEO of KAAPA Ethanol in Minden, Nebraska.
"As a farmer-owned ethanol producer, extending tax incentives for ethanol use is a critical step allowing ethanol to compete with a heavily subsidized oil industry. We are committed to the process of responsible reform of ethanol tax policy, but such a process would have been infinitely more difficult in the absence of the existing tax policy.
"We look forward to working with lawmakers, President Obama, and all other stakeholders to establishing policy that will ensure the continued growth and evolution of America' s ethanol industry."