Ethanol industry benefits from subsidies: study

by Meat&Poultry Staff
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WASHINGTON – A study assessing the subsidies provided for producing different types of biofuels has been released by the Congressional Budget Office (C.B.O.). This study also estimates the cost to U.S. taxpayers and analyzes the interaction of the tax credits and mandates to produce biofuels, according to the American Meat Institute (A.M.I.).

The study was requested by the chairman of the Subcommittee on Energy, Natural Resources and Infrastructure of the Senate Committee on Finance.

After adjustments for the different energy contents of the various biofuels and the petroleum fuel used to produce them, producers of ethanol made from corn or other similar feedstocks receive 73 cents to provide an amount of biofuel with the energy equivalent to that in one gallon of gasoline, according to the study. Using ethanol to reduce gasoline consumption by one gallon costs taxpayers $1.78.

Furthermore, the study also determined that to the extent mandates determine levels of production in the future, the biofuel tax credits would no longer be increasing production.

The tax credit for corn-based ethanol is set to expire Dec. 31.

Titled “Using Biofuel Tax Credits to Achieve Energy and Environmental Policy Goals,” the study can be accessed at
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