Energy: Domestic Ethanol Production (2011-13)
Addressing duplicative federal efforts directed at increasing domestic ethanol production could reduce revenue losses by more than $5.7 billion annually.
Year Identified: 2011
Area Number: 13
Area Type: Fragmentation, Overlap & Duplication
1 Total Action(s)
Congress may wish to consider whether revisions to the ethanol tax credit are needed. Options could include the following: Maintain the volumetric ethanol excise tax credit (VEETC) at current levels. Allow the VEETC to expire at the end of 2011. Reduce the VEETC as Congress did in the 2008 Farm Bill, when the ethanol tax credit was reduced from 51 cents to 45 cents per gallon. Phase out the VEETC over a number of years. Modify the VEETC to counteract fluctuations in other commodities that can influence ethanol production, such as changes in crude oil prices. For instance, the ethanol tax credit could increase when crude oil prices are low and decrease when crude oil prices are high.
Congress may wish to consider whether revisions to the ethanol tax credit are needed. Options could include the following: Maintain the volumetric ethanol excise tax credit (VEETC) at current levels. Allow the VEETC to expire at the end of 2011. Reduce the VEETC as Congress did in the 2008 Farm Bill, when the ethanol tax credit was reduced from 51 cents to 45 cents per gallon. Phase out the VEETC over a number of years. Modify the VEETC to counteract fluctuations in other commodities that can influence ethanol production, such as changes in crude oil prices. For instance, the ethanol tax credit could increase when crude oil prices are low and decrease when crude oil prices are high.
Congress allowed the VEETC to expire at the end of 2011. The most recent extension of the credit—set at 45-cents-per-gallon in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010[1]—expired on December 31, 2011. Fuel blenders that purchase and blend ethanol with gasoline no longer receive the credit. [1]Pub. L. No. 111-312 (2010).
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