A Sweeter Alternative

Resolutions for a New Year With Free Trade for Ethanol

Leticia Phillips — Sun, 01 Jan 2012 00:05:00 -0500

Welcome to a brand new day in a brand new year! Today, for the first time in 30 years, we awoke to a tax and tariff free trade environment for ethanol. Finally, a fresh start for clean energy competition around the world, and sugarcane ethanol producers welcome it with open arms.

In honor of this exciting day and in sticking with tradition, we thought we’d take a moment to share our 2012 New Year’s Resolutions and observations with you:

Sugarcane ethanol is committed to helping America diversify its energy supply and reduce greenhouse gases. The U.S. Environmental Protection Agency places sugarcane ethanol in an elite category of superior biofuels because it reduces carbon dioxide emissions by more than 50 percent compared to gasoline. However, Americans used practically none of this sweeter alternative in 2011 due to the cost-prohibitive tariff. With the trade barrier gone, look for greater access and a corresponding increase in environmental benefits starting this year.
Brazil will be a good partner helping to supply America’s clean energy future. The United States and Brazil both desire safe, secure and affordable energy. That’s why those countries formalized their partnership through the U.S.-Brazil Strategic Energy Dialogue last March. Removing the U.S. import tariff on ethanol is a step in the right direction, but our ultimate goal is to foster an international market for free trade of clean, renewable energy. With leadership from both Americans and Brazilians, this dream can become a reality.
The best is yet to come. Delicious table sugar and clean ethanol are probably the best-known uses for sugarcane today. But this versatile plant has much more to offer. High-tech innovation has begun to unlock other useful products that are also clean and renewable – things like bioelectricity, bioplastics and renewable fuels that could replace diesel and jet fuels.

We look forward to continuing our work together in 2012 to give Americans access to clean and affordable renewable energy solutions, and we wish you all a happy, healthy and green New Year.

Three Big Winners from Ending Ethanol Subsidies

Leticia Phillips — Fri, 23 Dec 2011 10:35:00 -0500

A day many thought might never arrive is finally just around the corner. Today, December 23^rd, Congress finished their work to head home for the holidays, and we can now say confidently that ethanol’s 30-year-old tax credit and import tariff will finally expire on December 31^st. Ending these costly and unnecessary subsidies just eight short days from now will save taxpayers money, help lower fuel prices and provide Americans with greater access to advanced renewable fuels like sugarcane ethanol. Let’s take a look at the three big winners from changing ethanol policy.

American Taxpayers

The U.S. has grown into the world’s largest producer and exporter of ethanol, thanks in part to at least $45 billion in government support for that industry since 1980. But in times of economic uncertainty and skyrocketing deficits, the $6 billion annual price tag for these subsidies became a major target for deficit hawks – especially when industry leaders admitted they could do without. Eliminating the ethanol subsidies should give every American taxpayer six billion reasons to cheer.

American Drivers

Ending the ethanol import tax and removing trade barriers also reduces price volatility and helps ensure drivers get the lowest price available at the pump. For much of the past decade, sugarcane ethanol was the most affordable type of ethanol. Recently corn ethanol has been cheaper, though actual prices fluctuate daily responding to dozens of market signals. While predicting future prices is a guessing game, consumers are sure to win when businesses have to compete in an open market, because competition produces higher quality products at lower costs. Now this same principle will hold true for renewable fuels.

Clean Energy Supporters

Americans want and deserve the best. But when it comes to energy, misguided government policies kept certain clean options like sugarcane ethanol out of reach. Last year, the U.S. Environmental Protection Agency placed sugarcane ethanol in an elite category of superior biofuels by designating it an “advanced renewable fuel,” saying it reduces greenhouse gas emissions by more than 50 percent compared to gasoline. With the ethanol import tax gone, this sweeter alternative can now be part of the solution for diversifying U.S. energy supplies, increasing healthy competition among biofuel manufacturers and improving America’s energy security.

A Word of Thanks

We would be remiss if we didn’t take the opportunity to applaud the leadership of those who played instrumental roles in the cause of ethanol reform. First and foremost, we’d like to thank Senators Tom Coburn and Diane Feinstein for their leadership to end the tariff and tax credit in the Senate, and Congressmen Joe Crowley and Wally Herger for their efforts in the House. In these days where bipartisanship is a rarity, these courageous members joined together and fought for a common cause, and we are grateful for their leadership.

Additionally, we’d like to recognize the outpouring of support from newspaper editorial writers and other opinion leaders. Since we started the Sweeter Alternative campaign last year, over 228 editorials, op-eds and letters to the editor have run in newspapers around the country supporting reform. The clear thinking, wit and intellectual support from these columnists truly made a difference.

And finally, we’d like to celebrate the tens of thousands of Americans who took action for clean energy by calling or writing their members of Congress during critical moments within the past two years. Real people from all 50 states came to understand how sugarcane ethanol is a clean and affordable renewable fuel that can help save money at the pump, cut U.S. dependence on Middle East oil and improve the environment. This victory is a testament to their involvement, enthusiasm and persistence.

Sugarcane ethanol producers offer our sincere appreciation to you all, and we look forward to playing an important role supplying America’s clean energy future.

Clearing Up a Few Tariff Myths

Leticia Phillips — Thu, 15 Dec 2011 16:17:34 -0500

You can tell without looking at a calendar that this year’s legislative session in Congress is drawing to a close. Just as an increase in harried shoppers announces the Holidays are here, the volume of unfounded accusations has grown louder as we approach the December 31^st expiration for the misguided tariff on imported ethanol. The abundant misinformation signals a desperate attempt by those who benefit from the 30-year-old trade barrier to preserve their protected status. So let’s have an honest debate and clear up a few misconceptions.

Myth #1: Ending the ethanol tariff will cause job losses in the Caribbean.
Reality: Time to cut out the middle man, because Americans do not benefit from the current arrangement.

Special interests in the Caribbean have benefited from a trade loophole since 1987. Certain countries in that region operate ethanol dehydration plants that are exempt from the ethanol import tariff as long as their supplies don't exceed 7% of the previous year's U.S. production. These plants add no real value to the ethanol they process and provide few jobs. Whenever a ship arrives (which has been a rarity during the past 18 months), workers assist with pumping the fuel into a dehydration machine and then piping it back onto the ship once water is removed. No one has produced credible information on the number of jobs involved – probably because there are so few, if any, formal jobs created. Oh, and most of these countries are net importers of petroleum, meaning Hugo Chavez’s oil from Venezuela is likely powering the operation. With no tariff and free trade, Americans could receive direct access to lower-cost ethanol without this unnecessary, interim step.

Myth #2: Brazil’s 20% limit for blending ethanol in gasoline amounts to a trade barrier.
Reality: American exports to Brazil have never been higher, making it a ridiculously ineffective trade barrier.

Brazilian law provides the government flexibility to set the ethanol blend with gasoline anywhere between 18% and 25%. As they’ve done many times during the past decade, officials have currently set the blend limit at the lower end of the range because they feel domestic ethanol supplies are too constrained. The Brazilian government took this action despite protests from the sugarcane industry. We disagree with the decision and continue to call for reinstating the blend limit at 25%.

But the lower limit certainly hasn’t stopped shipments of American ethanol. In fact, after Brazil announced this blending reduction at the end of August, U.S. ethanol exports skyrocketed in September making it the third highest month on record to date. Remarkably they increased even more in October – the most recent month for which complete data are available. Brazil was the leading destination for American ethanol during both months, receiving nearly half of the 105.8 million gallons (mg) shipped in September and 50 mg from October’s 121.4 mg exported. In all, Brazilian imports have totaled more than 215 million gallons in 2011 – a record demand from that country for U.S. ethanol.

Myth #3: Brazilians are poised to reinstate an ethanol tariff next year.
Reality: American ethanol has been and will continue to be welcome duty free in Brazil.

In April 2010, with strong support from the Brazilian sugarcane industry, the Brazilian government unilaterally reduced its tariff on American ethanol to zero. The sugarcane ethanol industry supported this move because we believe the U.S. and Brazil should lead by example in creating a free market for clean, renewable energy since they are the world’s top producers of ethanol.

Some groups have questioned Brazil’s commitment to maintaining a zero tariff due to procedural concerns related to the country’s membership in the Common Southern Market (Mercosur), a customs union agreement. Under Mercosur rules, signatory countries have the right to apply a lower tariff for a limited number of products without interference from other member countries. Anhydrous ethanol – the type of ethanol America produces and exports – is on Brazil’s list of tariff free products.

These lists are reviewed every six months, and though countries have the right to update and modify them, anhydrous ethanol remains untouched since being added almost two years ago. And considering the Brazilian government is doing all it can to reduce the price of ethanol, we can’t imagine officials would take the counterproductive step of increasing import taxes on the fuel.

Sugarcane ethanol producers strongly support a zero tariff on ethanol imports – a point we made clear in our recent letter to the U.S. Chamber of Commerce. Our position will hold as long as the U.S. import tariff on foreign ethanol expires at the end of the month and is not reinstated in the future. We believe that ethanol should be freely traded, and we encourage the United States Congress to let its tariff expire.

73 House Leaders Call for Elimination of Ethanol Tariff

Leticia Phillips — Tue, 13 Dec 2011 14:25:10 -0500

Last Friday, a bipartisan group of 73 Members of the House of Representatives joined together to call for an end to the ethanol tax credit and import tariff as scheduled on December 31^st. They sent a letter to Speaker John Boehner and Minority Leader Nancy Pelosi asking that leadership “resist calls to expand or create new ethanol subsidies in the eleventh hour” as the first session of the 112^th Congress nears its conclusion.

Implemented 30 years ago to help sustain the nascent ethanol industry, the ethanol subsidies now cost Americans $6 billion a year. At a time when every penny of the budget is under scrutiny, it makes no sense to continue funding an industry that, just this year, surpassed Brazil to become the world’s leading ethanol exporter. The letter summarizes the current situation well:

“The ethanol industry has benefited from a tax credit incentivizing production, an import tariff shielding it from competition, and a renewable fuels mandate creating demand… Congress anticipated the ethanol industry one day being sufficiently mature to stand on its own. It is difficult to make the argument that this day has not arrived… With widespread concern across a spectrum of issues… extending a billion dollar ethanol tax credit would appear out of the question and the prohibitive import tariff should be allowed to expire as well.”

This strong statement of support represents districts from across the country, with signatures from members in 30 different states. Additionally, 43 Republicans and 30 Democrats joined the letter, serving as a poignant reminder that bipartisanship is still alive in today’s divisive political world.

We applaud these 73 Members for speaking with one voice to secure a huge victory for the American taxpayer. The U.S. Senate already made its position on the ethanol tariff and tax subsidy crystal clear earlier this year by voting in a strongly bipartisan way (73-27) to end both the tariff and tax credit. With no further action needed, Congress can usher in a new era of energy efficiency and secure a better America for decades to come.

For further information, the full text of the letter and list of member signatures is available here.

Unfair Legislation to Extend Tariff

Leticia Phillips — Tue, 06 Dec 2011 11:23:36 -0500

On December 2^nd, four members of the U.S. House of Representatives introduced H.R. 3552 to extend the import tax on foreign ethanol. Saying that we are disappointed is a gross understatement, especially given that we are 26 days away from expiration and the momentum has been growing to bring a final end to this outdated policy. This handful of policy makers is trying to change the rules to help a few, and they’re doing it at the expense of the American taxpayer.

Distorting the Rules on the Back of the Taxpayer

The United States has been subsidizing corn ethanol and imposing trade barriers on cleaner, cheaper ethanol from other countries for more than 30 years. The stated rationale for the ethanol import tariff has always been to offset a tax credit intended for corn ethanol producers and therefore prevent Americans from subsidizing foreign energy production. This corn ethanol credit expires at the end of December, as should the justification for maintaining the corresponding ethanol import tax. According to a letter from the U.S. Chamber of Commerce sent to Congress last week:

“These trade barriers prevent U.S. consumers from abundant and potentially more economical choices from friendly nations like Brazil…The elimination of the import tariff on foreign ethanol would create an open, competitive marketplace resulting in more choices for consumers, less global fuel price volatility, and perhaps most importantly, increased savings at the gas pump for U.S. drivers.”

However, certain parties who benefit from the current, anti-competitive arrangement and their allies in Congress are trying to change the rules by making the tariff a true trade barrier rather than a subsidy offset. Special interests may cheer this increased trade protection, but the real losers are American drivers since the lack of competition will keep ethanol prices artificially high. Such a blatant move to create further inequities will also risk a trade war between the United States and its trade partners, including friendly nations like Brazil.

Congressional Support for Expiration

America’s corn ethanol industry has blossomed into a thriving business. In fact, this year the United States solidified its new position as the world’s largest ethanol producer and exporter – shipping an estimated 900 million gallons around the globe. Half of America's exported ethanol winds up in Brazil, where it enters that country without paying a tariff.

Brazil, the world’s second largest producer and the leader in sugarcane ethanol, ended government subsidies for ethanol more than a decade ago and eliminated its import tariff on American ethanol in 2010. America should do the same. The U.S. Senate agrees and has made its position on the ethanol tariff and tax subsidy crystal clear by voting in a strongly bipartisan way to end both the tariff and tax credit earlier this year (73-27). We applaud Senators Coburn and Feinstein for their leadership to end the tariff and tax credit. In addition, Congressmen Joe Crowley and Wally Herger have introduced a similar proposal in the House Ways and Means Committee (HR 2307) that would allow for cheaper and cleaner sugarcane ethanol to be available to U.S. consumers. This bill also enjoys strong bipartisan support.

As the world’s top producers, the United States and Brazil need to lead by example in creating a free market for clean, renewable fuel. That means putting an end to trade distorting tariffs on ethanol, once and for all.

Ten Things We’re Thankful For in 2011

Leticia Phillips — Wed, 23 Nov 2011 12:18:12 -0500

As we all reflect back on a wonderful Thanksgiving with family and friends – and with our tummies stuffed full of turkey – we are finding lots of reasons to be grateful for a remarkable 2011. A New Year is just around the corner, and this time of year always begs for a look back over where we’ve been and where we’re headed. So, in the spirit of thankfulness, we thought we might share with you with some of our favorite milestones from this year.

10. Obama Goes to Brazil. In March, President Obama visited Brazil and announced a plan to forge a new energy partnership through the U.S.-Brazil Strategic Energy Dialogue. Both nations are seeking to address the “mutual interest in the development of safe, secure and affordable energy in an environmentally sound way, including oil, natural gas, biofuels, clean energy, and civilian nuclear energy.” That’s good for everyone who consumes energy, but I’ll confess the highlight of the trip for me was shaking hands with the President!

9. Republican Candidates Question Subsidies. During a recent energy forum in Iowa, all but one of the participating Republican candidates for President spoke out against wasteful spending, specifically supported ending ethanol subsidies. This significant departure from campaigns in the past emphasizes how the debate is changing in Iowa. Once unthinkable, now presidential candidates are questioning the necessity of continuing the expensive subsidies.

8. Bipartisan Congressional Leadership. In a rare moment of bi-partisanship, Senators Diane Feinstein (D-CA) and Tom Coburn (R-OK) teamed up to introduce an amendment that would sunset both the ethanol tax credit and tariff. Additionally, we applaud Congressmen Wally Herger (R-CA) and Joseph Crowley (D-NY) for introducing the companion legislation in the House. It’s refreshing to see that liberals and conservatives can occasionally find common cause, and we appreciate their leadership.

7. Brazilian Sugarcane Facilities are Ready to Trade Clean Energy. In a positive sign that Americans will soon have greater access to cleaner, advanced renewable fuels, 107 Brazilian sugarcane processing facilities have successfully registered with the Environmental Protection Agency (EPA), paving the way for sugarcane ethanol to assist the U.S. in meeting new environmental requirements.

6. ITC Announces Huge Savings Without Tariff. The International Trade Commission concluded in their most recent report that American consumers would benefit by $1.5 billion annually by 2015 if the high tariff rates were removed. The 2011 report represents a huge increase in savings from the $350 million estimated in the 2009 report.

5. America’s Ethanol Industry is Booming. Strong competition benefits consumers, so we are thankful that the U.S. ethanol industry is expected to export three times more ethanol in 2011 than in 2010. This solidifies the U.S. as the world’s largest ethanol exporter and underscores the fact that producers are in better shape than ever to end the subsidies, level the playing field, and handle increased competition.

4. An Outpouring of Editorial Support. Since we started the Sweeter Alternative campaign last year, over 228 editorial writers, op-ed contributors and letters to the editor have run in newspapers around the country supporting ethanol reform and asking that America’s renewable fuels market be open to real competition that will benefit consumers.

3. Ethanol Producers Say Time to End It. In a noteworthy departure from past years, domestic ethanol producers have finally gotten behind the idea that everyone has to do their part in this economic environment. Organizations like National Corn Growers Association, Renewable Fuels Association, American Coalition for Ethanol, Growth Energy and Green Plains Renewable Energy all agree that it’s time to end the 30 year subsidy, and conclude that the ethanol industry is strong enough to survive without it. See a list of select quotes here.

2. Senate Says No. On June 16^th, clean energy advocates experienced one of our most substantial victories of 2011 when the Senate passed the Coburn-Feinstein amendment by an overwhelming margin of 73 - 27 to end the ethanol tax credit and import tariff. This bi-partisan vote sent a strong signal that it’s time to reform U.S. ethanol policy and develop a global market for clean energy.

1. Trade Barrier About to Come Down. We are most thankful that 33 days from today, America will take an important step towards creating a global market for the free trade of renewable energy when the 30-year-old subsidy and tariff expire at the end of the year. So this year we are both thankful and optimistic that the time has finally come to end the $6 billion annual taxpayer handouts and lower fuel prices giving us access to cleaner, more affordable renewable fuels like sugarcane ethanol.

A Two Way Street: The Benefits of Free Trade

Leticia Phillips — Mon, 31 Oct 2011 10:50:00 -0400

The past few weeks have been busy for the international trade market – especially the ethanol sector. For starters, the United States solidified its new position as the world’s largest ethanol exporter. American corn growers successfully lobbied Congress to pass a handful of free trade agreements that open new markets for greater export opportunities. And finally, more than 100 Brazilian sugarcane processors registered with the U.S. Environmental Protection Agency (EPA) to start providing Americans with cleaner, advanced renewable fuel.

These three seemingly unrelated developments caught our attention because each underscores how the benefits of free trade and market competition can be enjoyed from the corn-fields of Iowa to the sugarcane mills of Sao Paulo. With the U.S. ethanol import tariff due to expire in less than ten weeks, clean energy advocates hope these advancements will further demonstrate the industry can withstand the elimination of the 30-year trade barrier that limits Americans access to clean, affordable biofuels. Let’s take a closer look.

U.S. Exporting Three Times More Ethanol than 2010

On October 13^th the Energy Information Administration released data underscoring how robust the U.S. ethanol industry really is. According to their year-to-date numbers (aggregated from January – August), domestic ethanol producers exported a record 640.7 million gallons of their product. That’s nearly triple the amount at this time last year, and already 243 million gallons more than the entire 2010 year. At this current pace, it is estimated that the U.S. will export 900 million gallons of ethanol in 2011.

Chuck Woodside, CEO of the KAAPA Ethanol plant, noted that folks in his industry are seeing the “highest gross margins since 2009”. Woodside remarked that, “there were a lot of balance sheets repaired in the industry within the last 12 months."

Corn Growers Recognize the Importance of Free Trade

In addition to the extensive growth in ethanol exports, U.S. corn growers are anxious to access new international markets now that Congress has approved free trade agreements with Korea, Colombia and Panama.

Kevin Ross, President of the Iowa Corn Growers Association, observed that farmers were “losing important market share in other countries… The free trade agreements…represent important export market opportunities and…is crucial to our competitive edge." He concluded that the industry finds, "it frustrating to watch other nations receive access to markets.”

We can understand the frustration felt by U.S. corn growers! Sugarcane ethanol has been effectively blocked from the American marketplace for more than 30 years by a cost-prohibitive tariff. Brazilian producers are ready to compete on the price, quality and environmental performance of our biofuel, so let’s hope the corn growers’ enthusiasm for free trade will carry over into the renewable fuels market.

Having fair, open access to competitive marketplaces around the world benefits consumers and creates a winning environment for all industries. That’s why Brazil ended government subsidies for ethanol more than a decade ago and eliminated its ethanol tariff early last year.

Sugarcane Facilities Register to Provide Advanced Renewable Fuel

Anticipating new market opportunities created by the expiring tax credit and trade tariff, the Brazilian Sugarcane Industry has been vigilantly preparing at home. In fact, it was just announced that 107 Brazilian sugarcane processing facilities have successfully registered with the Environmental Protection Agency (EPA). The registration is significant because it paves the way for Brazilian sugarcane ethanol, which is categorized as an advanced biofuel under the EPA’s Renewable Fuel Standard (RFS), to assist the U.S. in meeting the environmental requirements under the new RFS mandate. This is due in large part to the fact that sugarcane ethanol cuts greenhouse gas emissions by up to 91% compared to gasoline, making it even more desirable in the American market.

The benefits of free trade require a two-way street. So whether it’s booming exports or access to new international markets, it’s clear that corn ethanol producers are in better shape than ever to handle increased competition. With only ten short weeks left until expiration, we remain committed to the idea that it’s finally time to level the playing field and retire the tax credit and trade tariff. When businesses are allowed to compete in an open marketplace, everyone wins. And until that day of expiration comes, we will continue to highlight disparities in the marketplace created from ignored opportunities and unfair practices.

Getting More Bang for our Buck out of Trade Policy

Leticia Phillips — Wed, 19 Oct 2011 13:42:31 -0400

At a time when Americans are looking to squeeze the last penny out of every drop of income and when our Congressional leaders are cutting budget everywhere they can, the International Trade Commission (ITC) gave the United States some very good news. And the timing couldn’t have been any better.

Just last month, the ITC issued their most recent report, “The Economic Effects of Significant U.S. Import Restraints”, and outlined some areas for substantial savings in U.S. trade policy. The report – which measures the effects of unilaterally ending, or “liberalizing”, U.S. import restraints – concluded that American consumers would save $1.5 billion annually by 2015 if the high tariff rates were removed. That’s right. $1.5 billion. That’s a huge savings.

The U.S. is one of the world’s most open economies, but there is still room for improvement – especially when it comes to the unnecessary import tariff on ethanol. As a result of the U.S. Renewable Fuel Standard (RFS), which requires increased ethanol use after 2011, ITC projects a huge surge in demand for biofuel imports. The report states that, “to meet the demands of the RFS, the current projection anticipates that substantially more sugar-based ethanol will need to be imported to reach the 2015 renewable fuel targets.” And these expected changes led the ITC to adjust savings estimate from $350 million in 2009 to the $1.5 billion they’re projecting now.

Eliminating the ethanol tariff not only paves the way for sweeter energy alternatives through the creation of a new export market, but the U.S. economy as a whole benefits, as the report clearly shows. These remarkable savings could find their way into American pocket books with some simple changes. It’s time to take the advice of the ITC and allow the ethanol import tariff to expire as scheduled on December 31^st. It’s time we all got more bang for our trade bucks!

Congress is Back – What You Should Know

Leticia Phillips — Wed, 14 Sep 2011 07:20:00 -0700

With August recess in the rearview mirror and last bit of sand tumbling from our flip-flops, we’re all turning our attention away from sunny beaches and back to Washington. The ethanol debate has seen its fair share of twists and turns over the past year, and it’s okay if you missed some of them during vacation. So, to prepare for the final legislative push of 2011, here’s a quick recap of everything you need to know.

Three Key Milestones

1. Senate Says “No More” – On June 16^th the Senate passed an amendment by an overwhelming margin of 73 - 27 to end the ethanol tax credit and import tariff established in 1980. This bi-partisan vote sent a strong signal that it’s time to reform U.S. ethanol policy and develop a global market for clean energy.

2. Ethanol Producers Say “We Don’t Need It” – After 30 years of government support, even experts within the industry agree that ethanol producers are prepared for life without the subsidies. Here’s what some of them are saying:

On the survival of the subsidies in a blog post entitled VEETC is Dead. Get Over It: “[It] will take more than a miracle – it will take someone who actually wants to renew it. And, frankly, no one does at this point.” (Ken Colombini, Director of Communications for the National Corn Growers Association)
"The industry is preparing for the elimination of the ethanol tax incentive in 2012… The market has changed; we will be just fine without it." (Bob Dinneen, President and CEO of the Renewable Fuels Association)

“If the credit would have been eliminated, for example, 15 years ago, it would have been a death blow to the ethanol industry. Today, that's not the case.” (Brian Jennings, Executive Vice President for the Sioux Falls-based American Coalition for Ethanol)

Directly referencing the tax credit: "The industry wouldn't have happened without it, but we're in a different position today." (Tom Buis, President of Growth Energy)

"We believe that the [ethanol] industry can stand on its own." Later noted the tax credit was “a target on our back since the beginning of this company. We feel like we can be competitive with gasoline going forward." (Todd Becker, CEO of Omaha-based Green Plains Renewable Energy — the country's fourth-largest ethanol producer)

3. Ethanol Left Out of Debt Deal – During the heat of the debate over the debt limit crisis, a bipartisan trio of Senators unveiled a compromise plan that would have ended the ethanol tax credit and import tariff mid-year, applied most of the $2 billion saved to deficit reduction and directed the remaining funds to support advanced biofuels and alternative fueling infrastructure. Senator’s Diane Feinstein (D-CA), Amy Klobuchar (D-MN) and John Tune (R-SD) worked tirelessly to build their compromise into the final debt limit agreement. In the end, however, the compromise was left out of the final plan. Senator Feinstein concluded, "I feel terrible because I think it was a good agreement and should have been enacted."

The Endgame

The general sentiment around the country and on Capitol Hill is that time and interest are running thin for any legislation action to extend the tax credit or the tariff beyond their December 31st, 2011 expiration date. And while this is the best chance in 30 years to eliminate these unnecessary subsidies, there's still work to be done to secure victory with this important initiative.

Brazil ended government subsidies for ethanol more than a decade ago and eliminated its ethanol tariff early last year. It’s time for America to do the same. UNICA believes that everyone wins in an open market because renewable fuels will be produced at a higher quality and lower cost when businesses are allowed to compete.

But to make it a reality, we need your help! Congress still needs to hear from clean energy advocates like you. Tell them stay the course for these last four months and let the unfair and unnecessary subsidies expire on December 31st, 2011. The time has come to end the $6 billion annual taxpayer handouts and lower fuel prices giving us access to cleaner, more affordable renewable fuels like sugarcane ethanol.

Congress Leaves for August Recess Without Passing Ethanol Deal

Leticia Phillips — Mon, 08 Aug 2011 14:15:00 -0700

These past few weeks have been particularly intense in Washington as the President, the Congress, and the nation worked to find a solution to the debt limit crisis. With the hours waning and a deadline drawing near, our elected officials were able to come together to pass a law allowing the Federal Treasury to continue paying the country’s bills.

Unfortunately, there was an important piece of the debt puzzle that got left out of the final product, and that was the bipartisan effort to end the ethanol tax credit and import tariff ahead of schedule this summer. In a battle that could have used a dose of cooperation and sound fiscal policy, the agreement reached by Senators Dianne Feinstein, Amy Klobuchar, and John Thune would have ended subsidies that could save American’s approximately $6 billion a year, and provide more access to clean, renewable fuels like sugarcane ethanol. It would have been a win-win. But since the final debt agreement did not include any revenue adjustments, the ethanol tax repeal and import tariff were excluded.

Senator Feinstein noted, “Our efforts to repeal ethanol subsidies have reached an impasse. The debt agreement excludes all immediate revenue raisers and there are simply no other tax vehicles to which we can attach a repeal.” She went on to conclude, "I feel terrible because I think it was a good agreement and should have been enacted."

What Now?

A few members of Congress are not ready to give up yet. Just last week during the debt limit negotiations, a bipartisan group of 12 Senators led by Senators Tom Coburn and Jim Webb urged that chamber’s leaders to “ensure that both the VEETC and import tariff are ended as soon as possible.” They called for another quick vote on legislation that already passed the Senate previously by a margin of 73-27 “to ensure that the approximately $6 billion in taxpayer money that is annually spent to support ethanol production is terminated.”

We certainly support any effort to end the unfair, $0.54-per-gallon tax on clean energy as soon as possible, but most Capitol Hill observers agree that chances are slim for any major action this fall on the Feinstein, Thune, and Klobuchar deal. However, there is still a pathway forward in this fight, and that’s where we need your help.

What You Can Do To Help

The good news is the days are numbered for the ethanol tax credit and import tariff - both are scheduled to expire on December 31, 2011. And the corn ethanol industry has made it clear they no longer need the federal largess, and that the growing industry will continue to prosper. But clean energy advocates must remain vigilant and on the lookout for any mischief that would extend these costly and unnecessary subsidies beyond this year.

So take action now and talk with your Member of Congress during this August recess. Go to their town hall meetings, parades, and public events and encourage them to create an open and competitive marketplace for alternative fuels like sugarcane ethanol. Ask your Representative and Senators to stand strong and let the ethanol credit and import tariff expire on December 31^st, 2011.

The finish line is in sight, and with your help we can lead this charge to victory and save American’s money with a clean energy alternative and healthy competition.

Senators Unveil Bipartisan Deal to End Ethanol Tariff

Leticia Phillips — Mon, 11 Jul 2011 09:05:00 -0700

Congress took another important step toward establishing a global market for clean energy last week. A bipartisan group of farm-state senators and ethanol critics unveiled a compromise agreement on Thursday to end the ethanol tax credit and import tariff later this month, apply most of the $2 billion saved to deficit reduction and divert the remaining funds to support advanced biofuels and alternative fueling infrastructure. The proposed deal provides further evidence that lawmakers are committed to ending these costly and unnecessary subsidies already set to expire on December 31, 2011.

Last month, the U.S. Senate overwhelmingly approved an amendment to eliminate the ethanol tax credit and import tariff by a vote of 73-27. But with the fate uncertain of the underlying legislation to which that amendment was attached, Senator Dianne Feinstein (D-CA) began negotiations with Senators Amy Klobuchar (D-MN) and John Thune (R-SD) searching for a bipartisan compromise that could be enacted into law quickly. To announce the agreement, the three senators sent a letter to Majority Leader Harry Reid and Minority Leader Mitch McConnell informing the Senate leaders that "we have reached a compromise that will repeal the current ethanol blender subsidy and tariff, as of July 31, and invest two-thirds of the savings in deficit reduction and one-third of the savings in tax incentives that increase our energy independence."

Time of the Essence

However, timing is critically important to pass this deal and end the unfair tariff that denies Americans access to clean, affordable alternatives like sugarcane ethanol. The letter emphasizes that that if "Congress fails to enact this proposal before it adjourns for August recess, the substantial levels of deficit reduction and investment achieved by this compromise will no longer be possible, and we cannot commit our support after that point. Therefore, we ask for your assistance in moving this agreement through Congress before we adjourn."

The Obama Administration appears to be on board, which could help speed passage. A White House spokesman called the deal "[c]onsistent with the Administration's goals" and said it "provides a roadmap for the American biofuels industry to navigate their own future expansion - addressing infrastructure needs while supporting innovation for the next generations of biofuels." You can see more of the details and reactions from key players in coverage by The Wall Street Journal, The New York Times and Associated Press.

Urge Congress to Act Now

Brazil ended trade-distorting subsidies for ethanol more than a decade ago and eliminated its ethanol tariff early last year. We are pleased that this agreement would have the United States do the same and thank Senator Feinstein for her leadership on this important issue. As the world's top producers of ethanol, the U.S. and Brazil should lead by example in creating a free market for clean, renewable energy.

Please contact your members of Congress and urge them to end the 30-year-old tariff on imported ethanol this month. Doing so will help lower fuel prices and provide Americans with greater access to clean and affordable renewable fuels like sugarcane ethanol.

Let your representative and senators know that consumers win when businesses have to compete in an open market, because competition produces higher quality products at lower costs. The same principle holds true for renewable fuels. Allowing other alternative fuels like sugarcane ethanol to compete fairly in the U.S. will save Americans money, cut dependence on Middle East oil and improve the environment.

A Major Victory for Clean Energy & Market Competition

Leticia Phillips — Fri, 17 Jun 2011 13:18:12 -0700

Yesterday’s vote was a symbol of changing times. Politico announced “there are no longer any sacred cows when it come to energy,” while the Wall Street Journal called it “an ethanol miracle.”

By a margin of 73 to 27, the Senate approved an amendment offered by Senators Tom Coburn (R-OK) and Dianne Feinstein (D-CA) to end the ethanol tax credit and import tariff created in 1980. A bipartisan vote backed by almost three-fourths of the Senate sends a strong signal supporting reform of U.S. ethanol policy and development of a global market for clean energy. An overwhelming majority of Senators also indicated the 30-year old corn ethanol industry is mature and ready to compete in an open market.

As Sen. Coburn said yesterday, “the best way for ethanol to survive is for it to stand on its own two feet, without subsidies, and us spending money that we don’t have.” Brazil ended government subsidies for ethanol more than a decade ago and eliminated its ethanol tariff early last year. That’s why we’ve been arguing for over a year that it is time for the United States to do the same. As the world's top producers of ethanol, the U.S. and Brazil should lead by example in creating a free market for clean, renewable energy. And yesterday was an important step towards that goal.

Dissecting the Vote

Support for ending the tariff was significant and bipartisan. A large majority of Republicans (33 out of 47 senators) and Democrats (40 out of 53, including two Independents who caucus with the Democrats) supported the amendment and voted to end the ethanol tax credit and trade protection six months ahead of their scheduled expiration on December 31, 2011.

The opposition was mainly regional. Only 15 states are represented by a senator who voted “Nay” and, in fact, most of the opposition came from only 12 states where both senators voted against the measure. These included: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Mississippi, Missouri, Nebraska, North Dakota, Ohio and South Dakota. You can view the final tally and see how your senator voted here.

What’s Next?

The Senate took an important step towards helping lower fuel prices and providing Americans with greater access to clean and affordable renewable fuels like sugarcane ethanol. But there are many more steps still remaining to see the amendment signed into law. We look forward to continuing our work with members of Congress and the Obama Administration to end this unfair tariff.

We thank Senators Feinstein and Coburn for their leadership on this important issue, and congratulate all 73 Senators for having taken such an important step. Please take a moment to contact your senators and express your appreciation personally for their support. While you’re crafting the e-mail, you may also want to look through the over 200 editorials from across the country that helped make the case for reform.

But keep in mind that the fight for access to clean, renewable energy is still not over. That’s why we’ll continue our campaign to save Americans money, cut dependence on Middle East oil and improve the environment by allowing other alternative fuels like sugarcane ethanol to compete fairly in the United States.

Time to Vote

Leticia Phillips — Fri, 10 Jun 2011 09:20:00 -0700

The political winds are changing on ethanol policy. The shift has been visible for weeks as one Republican hopeful after another - Tim Pawlenty, Sarah Palin and then John Huntsman - did what was once unthinkable in advance of the important Iowa caucuses that begin the Presidential nomination contests: they questioned the need or outright opposed continuing current ethanol subsides. That same sentiment will soon be put to the test on Capitol Hill as the U.S. Senate appears poised to vote on an amendment that would finally end 30 years of tax credits and trade protection for ethanol.

According to published reports, Sen. Tom Coburn (R-OK) filed a procedural motion yesterday that will force a vote on an amendment he co-sponsors with Sen. Dianne Feinstein (D-CA) to end the 45-cents-per-gallon blenders credit for ethanol (which adds about $6 billion each year to the annual budget deficit) and the 54-cents-per-gallon tariff on imports like sugarcane ethanol. The vote - which would require support from 60 senators to pass - could come as early as next Tuesday.

Ending the ethanol import tariff will help lower fuel prices and provide Americans with greater access to clean and affordable renewable fuels like sugarcane ethanol. But you can expect defenders of the status quo to lobby mightily and resort to misinformation as they struggle to defend their subsidies. While we have debunked those claims many times before, let's recap the case for free markets and competition as the Senate prepares for this important debate.

Time to End the Tariff

Tax credits and import tariffs probably made sense in 1980 to foster the nascent ethanol industry, and the policies have unquestionably worked. America's corn ethanol has blossomed into a thriving business with booming exports to other countries and now accounts for half of all ethanol produced around the globe. But 30 years later, the time has come to remove the industry's training wheels and promote market competition.

Brazil ended government subsidies for ethanol more than a decade ago and eliminated its ethanol tariff early last year. It is time for the United States to do the same. As the world's top producers of ethanol, the U.S. and Brazil should lead by example in creating a free market for clean, renewable energy. The benefits would include:

Lower Fuel Prices. Ending the tax credit and tariff would reduce ethanol prices by 12 cents per gallon this year and 34 cents per gallon in 2014, according to a recent study from Iowa State University. Because most gas sold in the United States contains 10% ethanol - and the Environmental Protection Agency has increased that limit to 15% for newer vehicles - lower ethanol prices would lead to savings at the pump for all drivers.
Taxpayer and Deficit Savings. In a time of soaring budget deficits, $6 billion annually is real money. Ending the ethanol subsidies would save taxpayers that amount.
Clean Energy Diversity. Americans would gain greater access to Brazilian sugarcane ethanol - a cleanand affordable renewable fuel that reduces greenhouse gas emissions by 60% compared to gasoline.

Time to Take Action

Consumers win when businesses have to compete in an open market, because competition produces higher quality products at lower costs. The same principle holds true for renewable fuels.

But to make it a reality, Congress needs to hear from clean energy advocates before the vote on Tuesday. The time has come to end the $6 billion annual taxpayer handouts and lower fuel prices with access to cleaner, more affordable renewable fuels. Contact your Senators today and tell them allowing other alternative fuels like sugarcane ethanol to compete fairly in the U.S. would save Americans money, cut dependence on Middle East oil and improve the environment.

Feinstein-Coburn Bill to End Ethanol Tariff Unites Progressives and Conservatives

Leticia Phillips — Wed, 18 May 2011 13:01:03 -0700

The bipartisan effort in the Senate to end the ethanol tariff and subsidy is garnering considerable praise among editorialists across the country and ideological spectrum. From left-leaning San Francisco to the halls of one of DC’s most conservative think tanks, Sens. Dianne Feinstein (D-CA) and Tom Coburn’s (R-OK) Ethanol Subsidy and Tariff Repeal Act is uniting unlikely supporters of every stripe. Below are key excerpts from pieces by the San Francisco Chronicle and the Heritage Foundation, both of which hone in on the need to end the tariff on imported ethanol.

San Francisco Chronicle – It’s time to end ethanol subsidies
Friday, May 13, 2011

America's ethanol subsidies and tariffs are outdated, expensive and damaging. There's no good reason we should continue offering them, and a bipartisan pair of U.S. senators have sponsored an amendment to abolish them.

There are three subsidies and tax credits for ethanol. One of them is a 45-cent-per-gallon blender's tax credit. That subsidy alone costs taxpayers about $6 billion a year.

Another is a 54-cent-per-gallon tariff on imported ethanol, which is less expensive than the domestic product. This supports American agribusiness - and not the U.S. taxpayer. It also encourages our consumption of foreign oil, because it's cheaper to import oil than it is to import ethanol.

The Heritage Foundation – Ethanol: A Corny Trade Policy
Tuesday, May 10, 2011

Gas prices are on the rise again. The national average is now just under $4.00 a gallon, and it’s sure to rise as the summer driving season rolls near. The pesky detail not often mentioned is that our ethanol policy is a contributing factor toward these higher fuel prices.

The United States is the world’s largest producer of ethanol, with Brazil a close second. However, Brazil’s sugar-based ethanol is cheaper, more efficient, and cleaner burning than our corn-based product. Yet special interests have managed a rather sweet deal for our domestic producers.

… Since 1980, there has been a tariff—currently 54 cents per gallon—on imported ethanol. That means Congress’s attempt at going “green” has resulted in another instance of the government embezzling more green from our wallets. By imposing this tariff on cheaper foreign sources (mainly Brazil), Congress has artificially raised the price that we are all forced to pay and has steered the market away from a more efficient, cleaner source of fuel.

… Congress should move toward ending this outdated tariff and let the free market work.

And it doesn’t stop there. Leadings papers in Texas and New York also weighed in with clear calls to eliminate these costly and unnecessary policies that block access to cleaner, affordable alternatives like sugarcane ethanol from Brazil. It’s an encouraging sign to see support extend across such broad political and geographic boundaries – these add to nearly 200 editorials, op-eds and letters to the editor published in 40 states since last year. If ending wasteful government spending and reducing prices at the pump for American drivers are top priorities for Congress, ethanol policy is a great place to start.

An Encouraging Sign: Sens. Coburn and Feinstein Join Forces

Leticia Phillips — Wed, 04 May 2011 08:55:00 -0700

In yet another sign of mounting support for ethanol reform, news broke last night of a fresh bipartisan effort to end the tariff on imported ethanol and the ethanol subsidy that costs taxpayers $6 billion per year. Senators Dianne Feinstein (D-CA) and Tom Coburn (R-OK) introduced an amendment to the small business bill that would sunset both policies less than two months from today. The unlikely pair is joined by five co-sponsors from across the country and political aisle – and a vast coalition spanning "business associations, taxpayer advocates, hunger and development organizations, agricultural groups, free-market groups, religious organizations, environmental groups, budget hawks, and public interest organizations."

Feinstein has consistently championed ethanol policy reform and led efforts to eliminate the trade barrier, which she says increases our dependence on foreign oil, raises gas prices for American drivers, and limits access to clean alternatives like sugarcane ethanol from Brazil. Late last year, the Senator was joined by 16 colleagues in urging the expiration of the tariff and subsidies as originally scheduled on December 31^st, 2010.

Coburn has long been a vocal opponent of wasteful spending and has been central to recent discussions following the introduction of a bill in March with Sen. Ben Cardin (D-MD) to eliminate the ethanol subsidy. While Coburn's bill did not reach a final vote, it sparked a spirited debate among fiscal conservatives and led to a well-publicized spat between Coburn and Grover Norquist’s Americans for Tax Reform.

Joining forces with Sen. Feinstein and targeting the tariff helps broaden support across political and regional lines even more. The new bill will replace Coburn’s previous amendment and is thought to be the preeminent push for reform, focusing the slew of efforts that have surfaced since the 112^th Congress began. Senate Majority Leader Harry Reid (D-NV) has already filed for cloture on the small business bill, so a vote is possible as early as this week.

After more than 30 years of subsidies and trade protection, it’s an encouraging sign that the two leading champions for ethanol policy reform have joined forces. Brazil ended government subsidies for ethanol more than a decade ago and eliminated its ethanol tariff last year. It is time for America to do the same. Free trade is a two-way street, which is made clear by the fact that the U.S. is exporting ethanol to Brazil today. As the world’s top producers of ethanol, the United States and Brazil should lead by example in creating a free market for clean, renewable energy.

Ending the ethanol import tariff will ultimately lower fuel prices and provide Americans with greater access to clean and affordable renewable fuels like sugarcane ethanol. We commend the efforts of Sens. Feinstein and Coburn in leading the charge and urge clean energy advocates to keep the pressure up until the votes are tallied.