Sensing time may be running out to preserve the 45-cent-per-gallon ethanol blenders’ tax credit, the ethanol industry was still convinced it can get the tax credit extended and build support for corn-based biofuels. However, several meat and poultry industry interests at the same time renewed their call on Congress to let not only the ethanol blenders’ tax credits expire, but to do away with the ethanol import tariff as well.

According to Feed&Grain.com, the meat groups argue the ever-increasing demand on corn supplies as a feedstock have exacerbated cost-of-production run-ups in their industry, the price of which is now being paid by consumers at grocery checkouts. Its estimate ethanol will utilize 4.7 billion bushels of the 2009-2010 corn crop.

Groups ranging from the American Meat Institute, the National Turkey Federation and the National Pork Producers Council to the American Petroleum Institute have joined together to file suit in federal court to overturn EPA’s decision to allow up to 15 percent ethanol in gasoline used in cars made in 2007 or newer.

In total 10 organizations joined in the suit which objects to the agency decision on the grounds that the “partial waiver” of the Renewable Fuels Standard blend rate of 10% ethanol in gasoline is not within the legal authority of EPA. The action is predicated upon Clean Air Act language that says the agency can only grant a waiver for a new fuel additive if it doesn’t “cause or contribute to the failure of any emission control device or system.”

For the meat groups, it’s all about feed costs exacerbated by the competition between food and fuel. NTF President Joel Brandenberger said 70 percent of the cost of producing turkey is the feed cost, and since 2005, his industry has lost over $1 billion to increased feed costs. API said the EPA partial waiver is “premature, lacks statutory authority and puts consumers at risk.” The ethanol industry says the lawsuit is all about “big food companies” trying to preserve profits “gouged (from) consumers.”
In a letter to House Speaker Nancy Pelosi (D, CA), six meat/poultry groups said they are willing to talk about a smaller credit and shorter than five-year extension the ethanol industry supports.

Ethanol supporters acknowledge it is a tough sell on a $6-billion program when everyone’s talking about controlling government spending, but believe they have enough political support to preserve at least the blenders’ credit.

Read more. 

Source: Feed&Grain.com