Corn Ethanol Receives More Federal Aid Than Other Alt-Energy Industries Combined

The corn-based ethanol industry dominates federal programs to support renewable energy, having taken two-thirds of all subsidies for renewable energy sources in 2007, the latest year for which such information is now available.

Corn-based ethanol received $3 billion in subsidies in 2007 -- almost twice as much as solar, wind, geothermal and other biomass combined, according to a report by the Environmental Working Group, which analyzed data from the Energy Information Administration.

Among tax benefits for renewable energy sources, corn-based ethanol received three-quarters of all benefits, the nonprofit group found.

Ethanol industry groups say they support greater investment in all kinds of renewable technologies, including wind and solar, but that it should not come at the expense of ethanol.

"This is an apples-and-oranges comparison, since ethanol does not compete in the power generation sector with wind, solar and geothermal technologies," Renewable Fuels Association spokesman Matt Hartwig said.

The report comes as lawmakers consider what, if any, additional incentives to include for ethanol in the economic stimulus package. Some lawmakers are seeking additional loan guarantees and tax credits for ethanol plants.

In a speech on the economy today, President-elect Barack Obama vowed to double the production of alternative energy in the next three years, but he did not specify which types of energy production he would include.

Environmental Working Group is among dozens of groups that have pressed lawmakers to repeal some of the tax incentives and subsidies for corn-based ethanol. The groups say that ethanol drives up food prices, pollutes waterways and accounts for too much federal spending.

Frankly speaking, we'd like to see some of the subsidies and tax credits diverted from the corn-based ethanol industry to efforts to perfect cellulosic ethanol, a promising biofuel made from wood, grasses or the non-edible parts of plants.

Scott Doggett, Contributor

Posted by

Scott Doggett January 8, 2009, 2:49 PM

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