Ethanol Subsidies Die

Finally, Congress expired the tax credit for ethanol blenders along with a tariff on Brazilian ethanol imports.

Lawmakers in the United States allowed a tax credit for ethanol blenders to expire this month along with a tariff on ethanol imports that effectively barred Brazilian ethanol from entering the country.

Both measures died as a result of inaction on the part of legislators. They were scheduled to expire and Congress didn’t stop to prevent it.

The blenders’ subsidy extended a $.45 subsidy per gallon of ethanol blended into gasoline that cost taxpayers roughly $6 billion every year. Brazilian ethanol, which is more efficiently produced from sugar cane, was subject to a $.54 per gallon tax.

Still in force is a federal mandate that requires a minimum amount of ethanol to be used every year but at least there’s now a better and cheaper alternative available. The mandate should also be repealed though. There’s no good reason to so benefit one industry, especially when it burns food and causes food prices to soar around the world.

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