The bipartisan Pomeroy-Shimkus bill would extend the current Volumetric Ethanol Excise Tax Credit (VEETC), the Small Ethanol Producers Tax Credit and tariff on imported ethanol for five years, according to the report. In addition, it will extend the Cellulosic Ethanol [image-nocss] Production Tax Credit for three years. These tax incentives are due to expire at the end of this year.
The legislators were joined by advocates of the renewable fuels industry, including the Renewable Fuels Association (RFA).
Industry leaders and experts say allowing the incentives to expire would deal a heavy blow to America's home-grown fuel industry. A recent study warned that if the VEETC credit is allowed to expire, it would cost 112,000 jobs and reduce domestic ethanol production by 38%. This production loss would be made up by increased fuel imports.
"At a time when our economy is struggling, we cannot afford to let these tax incentives expire and stymie the growth we have seen in our ethanol industry," Pomeroy said, according to the report. "This is a bipartisan bill that will promote not only economic growth but also the transformation of our energy industry from one that is reliant on foreign oil to one that is based on energy that's grown in farm fields in the heartland of America."
"I have been a long-time supporter of renewable fuels," added Shimkus. "Extending the ethanol and cellulosic tax credits helps give much needed certainty to the industry and will continue to help our nation's energy security."
"Allowing the tax incentives for ethanol to expire is simply not an option," said RFA president Bob Dinneen. "Failure to extend these incentives would force 112,000 Americans out of their jobs and shutter nearly two out of every five ethanol plants operating today."
He added that long-term extensions of these important incentives are good policy that encourages investment in current and next generation ethanol technologies.
"Reps. Pomeroy, Shimkus and their colleagues are showing important leadership in driving America toward a more independent, sustainable energy future," Dinneen said. "I encourage all members to follow their lead, relying on American farmers and American ingenuity, and allow our domestic renewable fuels industry to continue its evolution."
Others agreed.
"Without the tariff, American taxpayers will be allowing foreign-subsidized ethanol to subvert American companies and American workers," said Tom Buis, chief executive of Growth Energy, according to the report.
Growth Energy released a study last week showing that if the tariff were to lapse, steep job losses and economic declines would follow over a 10-year period, with single-year high job losses of more than 160,000 and single-year economic losses reaching a high of more than $39 billion.
But the move to extend the tax benefits, including a 54-cent-a-gallon tariff for imported ethanol was blasted by sugar-based ethanol producers from Brazil. Joel Velasco, the Brazilian Sugarcane Industry Association or UNICA's chief representative in North America, issued a statement saying, "Americans will not fully benefit from this clean, more affordable alternative if Congress continues to erect trade barriers against imported ethanol."
He added, "It is ironic that Congress allows oil from nations hostile to America into the country tariff-free, but is more than willing to punish clean energy from Brazil, a long-standing democratically."
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