Legislation that would immediately repeal the Volumetric Ethanol Excise Tax Credit, or VEETC, is drawing criticism from ethanol interests.
U.S. Senators Tom Coburn (R-OK) and Ben Cardin (D-MD) this week introduced the repeal as an amendment to the small business reauthorization bill, currently under consideration in the Senate. “The ethanol tax credit is bad economic policy, bad energy policy and bad environmental policy,” said Coburn in a release on the amendment. “I’m hopeful my colleagues on both sides of the aisle will take a stand against business-as-usual special interest giveaways and eliminate this wasteful and harmful subsidy.”
The Renewable Fuels Association (RFA), Growth Energy and the National Corn Growers Association (NCGA) are all hopeful they will not, issuing their own releases urging the defeat of the amendment unless oil subsidies are eliminated as well.
From RFA: “Given Senator Coburn’s interest in what he deems unnecessary subsidies, we would encourage him to offer an amendment that would eliminate subsidies to oil companies posting tens of billions of dollars in profit quarterly. In lieu of that, the RFA urges the Senate to ignore this frivolous amendment.”
“We urge defeat of Sen. Coburn’s amendment as it is inequitable to have a debate about tax policy for one energy source—homegrown renewable fuels –without having that same debate about tax breaks for other competitive energy sources, including oil and gas. While we welcome a debate about future energy tax policy it should go through the appropriate tax committees and not on the whims of a senator from a major oil producing state,” said Growth Energy CEO Tom Buis.
NCGA President Bart Schott said, “We are disappointed that Senator Coburn is singling out the ethanol industry in his amendment to immediately repeal the Volumetric Ethanol Excise Tax Credit (VEETC) while tax credits to the oil and gas industries remained untouched. The American ethanol industry provides and supports 400,000 jobs here in the United States during a time of economic uncertainty. In addition, in the past year alone, ethanol added more than $50 billion to the national Gross Domestic Product and displaced the need for more than 360 million barrels of imported oil, valued at $16 billion.”
There is currently no vote scheduled on the amendment. Last December, Congress extended the tax incentive for ethanol use until the end of this year.