After Three Decades, Federal Tax Credit for Ethanol Expires

The following was gleaned from a January 2 New York Times article with the above title.

The New York Times

Monday, January 02, 2012

After Three Decades, Federal Tax Credit for Ethanol Expires

WASHINGTON — A federal tax credit for ethanol expired on Saturday, ending an era in which the federal government provided more than $20 billion in subsidies for use of the product.

The tax break, created more than 30 years ago, had long seemed untouchable. But in the last year, during which Congress was preoccupied with deficits and debt, it became a symbol of corporate welfare. Fiscal conservatives joined liberal environmentalists to kill it, with help from a diverse coalition of outside groups.

In the United States, most ethanol is produced from corn.

Nearly 40 percent of the United States corn crop goes to ethanol and byproducts, including animal feed.

The tax credit, which cost the government nearly $6 billion in 2011, went to gasoline refiners that mixed ethanol with gasoline.

Senator Dianne Feinstein, Democrat of California, said the ethanol industry had enjoyed “a trifecta, a triple crown” of federal support. Federal law requires that certain minimum amounts of renewable fuels like ethanol be blended into gasoline. Refiners received the tax credit for doing so. And the government imposed a tariff on imported ethanol, protecting the domestic industry.

The tariff, like the tax credit, expired Saturday. But the requirement to use increasing amounts of ethanol in gasoline continues.

==========