U.S. government may end ethanol tax credit by end of July

In an effort to reduce the federal deficit, an agreement may be reached to repeal the US$6 billion per year tax credit for ethanol by the end of July. Three senators, Diane Feinstein, John Thune and Amy Klobuchar, have put forth a deal to reduce the federal deficit by US$1.33 billion by ending the current ethanol tax credit. Feinstein hopes to include US$668 million to extend tax breaks for technologies to make it easier to get biofuels to market. U.S. President Barack Obama supports the agreement, as does the ethanol industry group Growth Energy. It is unclear how the agreement will reach Congress. It could be a standalone tax bill or it could become part of the debt ceiling agreement. Currently, about 90% of the gasoline sold in the United States contains a minimum of 10% ethanol. (July 8, 2011)