We’re getting down to the wire as Congress nears final votes on a package of tax incentives for renewable energy. The latest plan out of the Senate would extend the Volumetric Ethanol Excise Tax Credit, the main corn ethanol tax credit commonly known as the “VEETC”, for just one year. That’s a far cry from the 5-year, $31 billion dollars worth of subsidies the corn ethanol industry spent the year pushing for, as we discussed here and here, and a big win for Americans worth $25 billion in taxpayer savings. But that’s still $6 billion next year that Congress should not waste on this redundant subsidy and mature, polluting technology.
With everyone from FreedomWorks to MoveOn, Senator Feinstein to Senator Kyl, and every major national newspaper’s editorial board supporting an end, once and for all, to corn ethanol subsidies, there’s still time for Congress to do better. Ending the tax credit now would save an additional $6 billion and reducing it by 20% would save $1.25 billion. That’s money that can be put towards supporting real clean energy technologies like wind, solar, and energy efficiency, and the Advanced Energy Manufacturing tax credit (section 48C of the tax code). These are the investments we need to help retool America’s factories to make clean energy technologies possible, grow our economy, and protect our environment.
Saying no to 5 more years of corn ethanol subsidies is a start and will make it easier for new, better-performing biofuels that provide long-term energy security and clean up our air and water to gain traction. But Congress should go further. It’s time to end the VEETC or at least reduce it.