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Three Reasons Ethanol Subsidies are Different from Biodiesel

by Leticia Phillips on Apr 28, 2011

Secretary of Agriculture Tom Vilsack has recently been testifying in Congress and meeting with editorial boards to defend the corn ethanol industry’s $6 billion per year subsidies. While Vilsack concedes the ethanol tax credit and tariff on imported ethanol should be reformed, he’s advocating for a costly multi-year phase out. And he’s offered a questionable comparison as justification – that eliminating subsidies today would have the same dire economic consequences that it did for the U.S. biodiesel industry. When the biodiesel tax credit expired at the end of 2009, production decreased by 50 percent and thousands of jobs were lost the following year. However, comparing biodiesel and ethanol is like apples to oranges for three key reasons. Read More

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