Green group, ethanol lobby at odds over subsidies

A major environmental group on Tuesday called for phasing out tax subsidies and other federal policies that benefit corn-based ethanol, prompting immediate criticism from the industry.

The National Wildlife Federation issued a report that recommends policies to bolster “sustainable” bio-energy sources, and current-generation ethanol doesn’t fit into that category in NWF’s view.

“Successful, sustainable bioenergy projects have started to take root in the United States, yet are not being adequately supported by current federal policies,” said NWF’s Julie Sibbing, the report’s co-author. “This report underscores the urgent need for the U.S. Congress and Obama Administration to enact solutions that support domestic plant-based energy sources that create jobs, enhance national security, protect wildlife and curb global warming pollution.”

The report recommends ending the 45 cents-per-gallon tax credit for refiners and marketers that mix ethanol into gasoline, which aids ethanol producers. The credit is scheduled to expire at the end of this year and the ethanol industry is lobbying hard for a multi-year extension. NWF similarly wants Congress to kill biodiesel tax credits.

The suite of other recommendations include making current-generation biofuels projects ineligible in many cases for Energy Department and USDA financing, and altering the national renewable fuels mandate to phase out corn-based ethanol when next-wave biofuels are fully deployed.

The Renewable Fuels Association, an ethanol industry trade group, did not take kindly to the report.

“Most disappointing about the continuous barrage of attacks by environmental activists is that we share many of the same goals,” said Matt Hartwig, a spokesman for the group. “Ethanol producers remain steadfastly committed to developing new technologies that improve efficiencies and expand the basket of feedstocks from which ethanol is made.”

He accused environmentalists of “partnerships with the oil lobby to mislead and misrepresent what American ethanol production is all about.”

Hartwig said that development of next-wave biofuels will not happen if the ethanol industry is undercut. The industry group also argues that removing tax incentives would lead to increased imports of ethanol made with crops grown on cleared rainforest and savannahs.

The report also drew attacks from Growth Energy, another ethanol industry trade group. “Ethanol is the only widely-available and commercially-viable alternative we have to gasoline refined from oil. Ethanol creates U.S. jobs, cleans the air, strengthens national security – and best of all, it is here right now,” said Growth Energy spokesman Chris Thorne.

source: thehill