Lawmakers fight to extend ethanol tax credits - KWWL - Eastern Iowa Breaking News, Weather, Closings

Lawmakers fight to extend ethanol tax credits


IOWA CITY (KWWL) - Lawmakers are scrambling to extend tax incentives for companies that blend biofuels with gasoline. This allows biofuels to stay competitive with the petroleum industry, and reduce our dependence on foreign oil. But tax credits for soy-based biodiesels expired months ago, and now, Congress is considering reducing or even cutting tax credits for corn-based ethanol.

"We've got 23-thousand people unemployed, because the biodiesel tax credit has run out," said Senator Charles Grassley, who worries that the same may happen to the ethanol industry.

Biodiesels have not seen tax credits since last December, when lawmakers allowed them to expire. Grassley says there's still time to extend the credits for the ethanol industry, which is trying to transition to a second generation of fuels.

"If we don't continue the credits, we won't be able to make that transition."

But while Iowa lawmakers fight to keep those credits alive, critics continue to push back, saying they're a waste of taxpayer dollars. In the meantime, Steve Fugate of the Iowa Renewable Energy Association says there's still an effort to revive tax credits for soy-based biodiesel blenders, which Iowa farmers invested millions in.

"A lot of farmers got together, put their money into these biodiesel plants, and now without the biodiesel blender's credit being extended, those plants are going under," Fugate explained. He says about 75 percent of Iowa's biodiesel plants have been shut down or sold at firesale prices, and those still open are operating at a fraction of their full production capacity. He tells us that's negatively impacting both the state's economy and environment.

"Biodiesel's a highly oxygenated fuel, which radically cleans up tailpipe emissions."

Fugate says without a blender's credit, the price of biodiesel has jumped by a dollar a gallon, and the same may end up happening to ethanol.

Online Reporter - Brady Smith

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