The Bush administration may be planning to cut or phase out the U.S. tariff on ethanol imports. U.S. Energy Secretary Sam Bodman suggested yesterday, in comments to the U.S. Chamber of Commerce, that the administration’s 2009 budget proposal may allow the 54-cents-a-gallon import tariff to expire.
Bodman said the budget proposal, which will be sent to Congress next week, will begin to address whether or not the ethanol industry is mature enough to compete with ethanol supplies from other countries–particularly Brazil.
Currently, the U.S. ethanol industry is protected by the fee that is levied on imports, but Bodman said the ethanol producers are able to compete without government assistance.
"I would just say I think that there are advantages to having had the kind of both subsidies and tariffs that have helped protect this industry. I believe that, the best I can tell, this industry is pretty close to being able to stand on its own," Bodman said.
The import tariff on ethanol will expire at the end of this year, if it is not renewed. Bodman did not definitively say whether the Bush administration will ask Congress to phase out the tariff or subsidies for domestic producers, or both.
"I’m not going to speak to that. We will announce the budget next week," he said. "The budget will speak for itself."
U.S. ethanol blenders currently get a separate 51-censt-a-gallon tax credit through 2010.
Loading...