Ethanol groups lay out draft policy blueprint

The draft principles, obtained by The Hill, feature the need to extend a 45-cent volumetric excise tax credit for ethanol that expires at the end of the year “at the highest level possible” for another year. 

The idea would then be to transition to a new four-year production tax credit essentially based on the greenhouse gases used to produce a gallon of fuel. For example, a facility that makes corn-based ethanol using biofuels would receive a higher tax credit than a corn-based ethanol plant using fossil fuels. Those that employ new technology to reduce energy and water use could also receive a higher credit.
 
The groups also call for more rapid deployment of flex-fuel vehicles and pumps that can handle ethanol blends to increase their market access.
 
Former Senate Agriculture Chairman Tom Harkin (D-Iowa) and Sen. Richard Lugar (R-Ind.) have offered legislation in recent years to increase the number of flex-fueled vehicles, or those that can run on either gasoline or fuel blended with ethanol.
 
Republicans, though, generally have shied away from specifically mandating flex-fuel vehicles in order to give automakers more flexibility.
 
Sens. Sam Brownback (R-Kan.), Susan Collins (R-Maine) and others have offered the idea of establishing an “open fuels standard” that requires automakers to produce vehicles that operate on something other than gasoline.
 
The blueprint also calls for establishing a loan guarantee program for ethanol pipeline projects and enabling corn-based ethanol to be considered an advanced biofuel under a federal renewable fuels production mandate. This would, in effect, lift the 15-billion-gallon limit on using corn ethanol to meet a requirement of producing 36 billion gallons of renewable fuels by 2022.
 
The groups also want to suspend the Environmental Protection Agency's effort to take indirect land use changes into account when determining the carbon footprint of ethanol “until a scientifically-based, transparent, reliable, and verifiable metric is created to determine the lifecycle greenhouse gas emissions of all fuels in the U.S. transportation marketplace,” according to the draft principles.

The blueprint does not include mention of the EPA's upcoming decisions on whether to allow for higher ethanol fuel blends. The agency is expected by as early as this week to announce it will grant a waiver allowing for E-15, consisting of 85 percent gasoline and 15 percent ethanol, to be safe to use in model year 2007 and newer vehicles. The agency is expected to announce this year whether it is safe to use the higher ethanol blend in vehicles at least as old as model year 2001.