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Six billion dollar subsidy for dirty corn ethanol defeated

Posted Dec. 23, 2011 / Posted by: Nick Berning

Corn ethanol no longer a sacred cow; After long campaign, diverse coalition prevents renewal of blenders' tax credit

Washington, D.C. — Congress finished its tax legislation today without including a provision to extend a massive subsidy for corn ethanol that is set to expire at the end of the year.

The subsidy — the Volumetric Ethanol Excise Tax Credit — has provided the oil and agribusiness industries with $0.45 per gallon of ethanol blended into gasoline, amounting to a total of approximately $6 billion each year.

The elimination of the subsidy, cherished by the once-mighty ethanol lobby, comes after a multi-year campaign to end it waged by Friends of the Earth and an ideologically diverse coalition of allies.

Friends of the Earth biofuels policy campaigner Michal Rosenoer had the following response:

“The end of this giant subsidy for dirty corn ethanol is a win for taxpayers, the environment and people struggling to put food on their tables.

“Corn ethanol is extremely dirty. It leads to more climate pollution than conventional gasoline, and it causes deforestation as well as agricultural runoff that pollutes our water.

“The growing demand for fuel crops also means less land is available for growing food, so food prices are going up. This is something many families simply cannot afford.

“Given corn ethanol's downsides, it's outrageous that taxpayers have been subsidizing the industry to the tune of $6 billion a year. The industry's inability to get this tax credit extended signals that it no longer has carte blanche in Washington — corn ethanol is no longer a sacred cow.

“Even though the corn ethanol industry has been weakened we must remain vigilant. Pork like this has a way of ending up back in the barrel without sustained opposition.

“We will now also turn our attention to ending other federal policies that support dirty corn ethanol, including the Renewable Fuel Standard, which requires a radical increase in biofuel consumption by 2022.”

CONTACT: Michal Rosenoer, 415-359-7309; Nick Berning, 703-587-4454

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Friends of the Earth fights to defend the environment and create a more healthy and just world. Our campaigns focus on promoting clean energy and solutions to climate change, keeping toxic and risky technologies out of the food we eat and products we use, and protecting marine ecosystems and the people who live and work near them.

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