A major ethanol industry trade group plans to release a study Thursday that warns of major job losses and reduced federal revenue if a key tax credit expires later this year.
The incentive helps domestic ethanol producers by giving oil refiners and gasoline blenders a credit of 45 cents for each gallon of ethanol blended into gasoline. The credit is scheduled to expire at the end of 2010 and the industry is pushing Congress to extend the incentive.
The study commissioned by the Renewable Fuels Association concludes that allowing the credit to expire would cause the loss of over 112,000 jobs in ethanol production and related industries, hitting rural areas the hardest, according to a summary.
Other effects, the study finds, would include a 38 percent drop in U.S. ethanol production, loss of investment in next-wave biofuels, loss of billions of dollars in state and federal tax revenues, and reduction of household incomes by over $4 billion.