Legislative Background on Ethanol Subsidies
Recent Action by Congress on Biofuels Tax Incentives
A number of Federal laws combine to provide support for the domestic ethanol industry. These include: Tax credits and other incentives for the production, blending, and sale of biofuels and biofuel blends. The primary incentive is the Volumetric Ethanol Excise Tax Credit (VEETC), in effect since 2005, which gives ethanol blenders a tax credit of 45 cents for every gallon of pure ethanol they blend with gasoline. The Renewable Fuel Standard (RFS), enacted in 2005 and expanded in 2007, which requires that transportation fuels used in the United States contain increasing volumes of biofuels, such as ethanol and biodiesel, rising…
