Ethanol Tax Break Could Be Removed By End Of Month

Posted by Nogger - a legend in his own mind at 10:40 | Categorized as

08/07/11 -- Three high profile US senators have reportedly struck a deal that could see the controversial ethanol blenders 45c/gallon tax break withdrawn by the end of the month. In addition the 54 cent duty on imported ethanol would also be removed, potentially opening up the door for sugarcane-derived ethanol imports from Brazil.

The senators are trying to push the proposal through before Congress adjourns for the August recess. All it needs now is Obama's signature.

The incentive of slashing billions straight off the budget deficit bottom line may seal the deal.

The corn market thus far seems remarkably relaxed about the whole thing considering that 40% of US production now goes to make ethanol. Of course the Renewable Fuel Standard (RFS), otherwise known as the ethanol mandate, still remains in place but with the import duty also removed we could see a significantly larger proportion of this now being taken up by ethanol from international sources.