US Ends Ethanol Fuel Tax Subsidy

Sinochem New Network News US federal tax subsidies for ethanol fuel have recently been terminated. In the past 30 years, the U.S. government has invested more than 20 billion U.S. dollars in total. (1 US dollar is about 6.31 yuan ***)

In the United States, most ethanol is extracted from corn. For a long time, the United States has seldom questioned ethanol subsidies. However, last year, as the US Congress faced a serious fiscal deficit and debt crisis, the policy was considered a symbol of corporate welfare. Therefore, financial experts, environmentalists, and various external groups hoped to abolish subsidies.

The New York Times stated that the termination of the subsidies is of great significance. It now coincides with the political season in Iowa, which mainly uses corn as the main crop. For the United States, nearly 40% of the corn is used for the production of ethanol and animals. Feed and other by-products.

Dean C. Taylor, former president of the Iowa Corn Growers Association, said: “Now it is the relatively advanced period of agriculture.” Taylor himself grows corn and soybeans. He said that no subsidies “will mean Many people's profits from the ethanol business have fallen, but as long as the demand for ethanol and gasoline remains strong, it will not cause much impact."

Last year, the U.S. government paid nearly 6 billion U.S. dollars for this subsidy, which was distributed to fuel ethanol refinery blended gasoline. The United States has always used ethanol and other biofuels as an alternative to reducing dependence on imported oil.

The U.S. General Office of Auditors said: "The growing demand for ethanol to produce ethanol has helped drive up the price of corn. Higher corn prices have brought extra income to growers," but it has also increased meat manufacturers, large food companies, The cost of grocery buyers and federal food items.

According to Michal L. Rosenoer, an American policy analyst on “Friends of the Environment”, “The termination of this huge subsidy is a victory for taxpayers, the environment, and consumers. The production of ethanol is used for killing. Insecticides, fertilizers, and heavy industrial machinery cause soil erosion, air, and water pollution, and it means that the land used to grow food is reduced, leading to higher food prices."

In fact, ethanol fuel proponents also accepted the adjustment of the new policy. Matthew A. Hartwig, spokesperson for the Sustainable Fuels Association, an industry group for ethanol producers, said: “We may be the only industry in the history of the United States that voluntarily gave up subsidies. The market has improved, compared to two years. In the past, tax incentives were not necessary. Ethanol accounted for 10% of the US gasoline supply."

Regarding how the termination of subsidies affects the price and supply of corn, Hartwig said: “We do not believe that the price of corn will rise or fall accordingly. Ethanol production in 2012 will be equal to or even more than 2011.”

Jeff Flake, an Arizona Republican congressman, said: "When the fiscal deficit is broken and the national debt is soaring, there is no reason for taxpayers to pay billions of dollars to a mature industry that can protect itself."

California Senator Diana? According to Dianne Feinstein, the ethanol industry has enjoyed generous government support in the past. Federal law requires that sustainable fuels such as ethanol must be blended with gasoline and that the minimum amount be set.

Despite the termination of subsidies, the demand for increased use of ethanol in gasoline remains valid. Iowa Republican Senator Charles Grassley stated that the use of ethanol reduced the retail price of gasoline and the United States’ dependence on imported oil.

As Congress began drafting new farm bills, ethanol companies and gas stations hope to expand a federal program to subsidize oil pumps and other equipment needed to separate highly concentrated ethanol from gasoline. But Arizona Republican Senator John McCain opposed the proposal. He said: “Lobbying groups think that the government’s subsidy for ethanol, protection against competition, and mandatory use of ethanol are not enough, and now require taxpayers to build gas stations. Pay taxes on oil pumps and fuel tanks."

Marlo Lewis Jr, a senior member of the Institute of Competitive Enterprises in the United States, a public policy organization, also expressed opposition to the ethanol subsidy. He said: “Industry has told me that we will never wait until the end of the ethanol subsidy. But we Now that it is done, Congress believes that this subsidy can't be sustained by the United States."