The Mad Scramble over the Ethanol Tax Credit

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July 20, 2010

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by Jim Lane (Biofuels Digest) Growth Energy, the Renewable Fuels Association, the Environmental Working Group, the Grocery Manufacturers Association, the Natural Resources Defense Council, the American Meat Institute, and several members of congress are among the main players in a drama unfolding this week on Capitol Hill, in a battle over the ethanol subsidy.

…In short, what will be decided this week in DC is an issue that needs attention in other countries as well.

What is the right mix of policies to ensure a speedy transition to renewables in the absence of a true, full price on carbon?

…For livestock producers, grain is their biggest cost item, and anything that brings down the price of corn is good business for them. Denying or limiting the ethanol secondary market achieves this.

For environmentalist groups, …(t)hey dislike the trade-off of ethanol’s environmental benefits, against what they believe is the destructive impact of corn monoculture. They surely aren’t as strongly opposed to, for example, cellulosic ethanol or sugarcane ethanol.

…But as the Digest have pointed out before, this is not a battle over ethanol, much less a battle over biofuels. For most, it is a proxy battle over corn.

…Steve Libsack at Betaseed writes, “My company has been growing energy beets for “proof of concept” from Nova Scotia to Georgia, from Texas to Alaska and from California to Pennsylvania for the past several years. With beets we can produce 800 – 1200 gallon of ethanol per acre (compared with 300 – 450 gallon per acre from corn) and, at a lower cost per gallon. Plus, beets reduce GHG emissions by over 60% (compared with 30% for corn) which also qualifies beets as a 2nd generation cellulosic feed stock. READ MORE

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