Tax breaks for corn-based ethanol threatened

ChicagoTribune.com
By Jim Tankersley Tribune Newspapers
May 6, 2009

Obama administration proposes end to subsidies for corn-based ethanol

WASHINGTON - -- The Obama administration proposed draft rules Tuesday that could undercut $3 billion a year in federal tax breaks for producers of corn-based ethanol, a move that sets the stage for a battle between Midwestern grain producers and environmentalists, who say the gasoline substitute worsens global warming.

Corn ethanol is widely used as an additive in gasoline to reduce hydrocarbon and carbon monoxide emissions. For much of the last decade, federal officials, touting it as a potential large-scale substitute for gas and a tool for reducing global warming and foreign oil dependence, lavished it with subsidies.

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