WASHINGTON The Bush administration did not
propose any changes to the expiring U.S. ethanol import tariff
in its new 2009 government budget that was sent to Congress on
Monday, an Energy Department spokeswoman said.
The spokesperson said while the 54-cent-a-gallon tariff is
set to expire at the end of December during the 2009 budget
year, which begins this October 1, the administration will have
discussions with lawmakers later this year on what should be
done with the tariff.
The tariff is designed to protect U.S. corn-based ethanol
makers from cheaper imports, mainly from Brazil which makes its
ethanol from sugar.
Energy Secretary Sam Bodman had hinted last week while
speaking at the U.S. Chamber of Commerce that he favored
eliminating or cutting back the tariff and that the
administration would address the issue in its new 2009 budget.
"I would just say I think that there are advantages to
having had the kind of both subsidies and tariffs that have
helped protect this industry. I believe that, the best I can
tell, this industry is pretty close to being able to stand on
its own," Bodman said at the time.
U.S. ethanol blenders get a separate 51-cent-a-gallon tax
credit that runs through 2010.
"I think it's very important that we pursue a policy which
gives the U.S. industry appropriate time and protection to
develop," Deputy Energy Secretary Clay Sell told reporters at a
briefing on the Energy Department's new budget.
"We'll look forward to having those discussions with the
Congress, as we always do, as the appropriate policy when the
tariff expires," he said.
Brazil's sugar cane sector was disappointed the
administration did not use the new budget to modify the U.S.
ethanol import tariff.
"The continuing ethanol tariff runs counter to America's
open and fair trade rhetoric," said Marcos Jank, president of
the Brazilian Cane Sugar Industry.
"It is shocking that developed countries such as the United
States continue to tax renewable biofuels from reliable
democratic partners while encouraging tariff-free imports of
petroleum from unstable regions of the world," he said.
However, the Renewable Fuels Association, which represents
U.S. ethanol producers, said the import tariff is needed to
encourage investment in the U.S. to develop cellulosic ethanol
made from wood chips, switchgrass and other farm and forest
"By removing the tariff ... you will cool the kind of
investment you have seen in the industry," said RFA spokesman
(Reporting by Tom Doggett; Editing by Russell Blinch and