Effort Underway to Reduce Ethanol Import Tariff
Bipartisan group of senators introduce a measure to cut the costs of bringing the biofuel into the country.
Compiled by staff
Published: Mar 20, 2009
It appears there's a growing interest in ethanol from a wide range of fronts, from efforts to increase blending levels, to worries over supply. A bipartisan group of senators is working on that second issue with a measure introduced this week that would reduce the tariffs for imported ethanol. The aim is to help U.S. refiners purchase cheaper and what they claim is more environmentally friendly ethanol from international sources.
Senators Dianne Feinstein, D-Calif.; Judd Gregg, R-N.H.; Jeff Bingaman, D-N.M.; Susan Collins, R-Maine; Maria Cantwell, D-Wash.; and Mel Martinez, R-Fla. are sponsoring the measure. They say that the 2008 Farm Bill lowered the ethanol blender subsidy from 51 cents to 45 cents per gallon. At the same time, the new bill left in place two tariffs on imported ethanol with a primary tariff at 2.5% of the transaction price, and a secondary tariff set at 54 cents per gallon. They claim this created a real barrier to trade on foreign ethanol imports, ranging between 11 and 13 cents per gallon.
The measure (S.622) would ensure parity between the ethanol blender subsidy and the two tariffs on imported ethanol. Specifically, it would require the President to lower the ethanol tariff at least 11 cents per gallon within 30 days of enactment.
From Feinstein's perspective, the tariffs give gasoline imports a competitive advantage over ethanol produced from sugar cane and other sources. "I believe this makes no sense - particularly given our nation's continued addiction to oil imported from the Middle East and other hot spots."
She adds that the bill lowers the tariffs on imported ethanol to a level at or below the 45 cent ethanol blender credit — while ensuring that foreign ethanol suppliers neither benefit from the ethanol subsidy nor are penalized by artificial barriers to trade.
The bill would mandate that the combined tariff on imported ethanol could not be set higher than the ethanol blender subsidy.
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Tagged: ethanol, farm, farm bill
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