The nation’s ethanol industry is scrambling to hold onto billions of dollars in government subsidies, fighting increasing opposition to the corn-based fuel and wariness from lawmakers who want to divert the money to other priorities.

Groups including the Renewable Fuels Association and the National Corn Growers Association said they want the existing tax credit extended, according to a report in the Des Moines RegisterRead more.

The National Pork Producers Council has joined several other food-animal organizations in asking the Senate not to extend the tax credit and import tariff for the ethanol industry.

Last week, House Ag Committee Chairman Collin Peterson warned that Congress was unlikely to provide a long extension of the ethanol credit and that it could even lapse at year's end.

The industry itself can't agree on how to persuade Congress to keep the subsidies, which now come in the form of tax credits worth about $6 billion annually.

In the latest effort to preserve the subsidies a House committee is considering a 20 percent cut in the ethanol subsidy that is otherwise set to expire this year.

A Ways and Means Committee spokesman said that a reduction of the tax credit from 45 cents to 36 cents per gallon was among ideas the panel was considering for a green-energy bill. The subsidy would be extended through next year.

A draft of the bill could be released in the next few days, said committee spokesman Matt Beck. The Hill, a congressional newspaper, reported that the committee's action on the bill was likely to be delayed until September.

Senate Democratic leaders are working on a broader energy bill that could include subsidies for biofuels. Rep. Leonard Boswell, D-Ia., said that "it may come down to either extending the ethanol credit another year at 36 cents or not extending it at all."

Source: Des Moines Register, Associated Press contributed to this report