Ethanol Industry Seeks Bailout Funds

The Heartland Institute
Written By: Drew Thornley
Published In: Environment & Climate News > March 2009
Publication date: 03/01/2009
Publisher: The Heartland Institute

The beleaguered ethanol industry, which is experiencing plant closures and disappearing profit margins despite being propped up by protective tariffs, federal subsidies, and renewable fuel mandates, is seeking federal bailout funds from the Obama administration.

Long History of Subsidies
The Renewable Fuels Association, which lobbies for the ethanol industry, is seeking $1 billion in short-term credit to prevent further plant closures, $50 billion in loan guarantees to fund additional production plants, and the abolishment of a U.S. Environmental Protection Agency rule that places a 10 percent limit on the amount of ethanol allowed to be blended with gasoline for conventional automobile engines.

The industry currently benefits from a federal subsidy of 45 cents per gallon sold, an import tariff charging foreign producers 54 cents per gallon, and a federal mandate requiring 10.5 billion gallons of ethanol be blended into the nation’s transportation-fuel mix.

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