Q: Why does the federal government impose a tariff on imported ethanol?
A: The import tariff on foreign ethanol sticks to solid principles of U.S. public policy designed to grow America’s energy security, reduce our dangerous dependence on foreign oil and encourage the domestic production of renewable energy. As Iowa’s senior U.S. Senator, I strongly oppose misguided suggestions to lift this tariff. The U.S. tariff on ethanol is a balance to an excise tax credit that applies to both domestically produced and imported ethanol. So by lifting the tariff, we would in effect be giving the benefits of a U.S. tax credit to subsidized foreign ethanol.
Just consider how the current policy helps advance Iowa’s march to become a renewable energy giant. Besides strengthening domestic energy supplies, the ripple effect fuels economic growth and job creation in rural America. Those who support lifting the tariff on imported ethanol may as well yank the rug out from beneath the family farmers and local investors who are working to secure solid footing in the domestic ethanol industry and launch an economic renaissance in their hometown communities. From the decision-making tables in Washington, I’ll continue championing policies that expand the production and consumption of homegrown renewable fuels that put America closer to energy independence in the 21st century.
Q: What other policies at the federal level will impact the local ethanol industry?
A: From my leadership position on the Senate Finance Committee, which has legislative and oversight authority over matters of tax and trade, I make every effort to implement policies that will loosen our dependence on foreign oil and encourage the domestic production of green energy. In December, I secured congressional approval to extend important tax incentives to produce alternative energy, including wind and biomass. The package includes a first-ever tax break to produce cellulosic ethanol, and a year-long extension of the import tariff on foreign ethanol. As a lifelong family farmer, I bring real world perspective to the policymaking tables in Washington. For generations, America’s farmers and ranchers have worked the land to earn a living and put food on the table for millions of families, including their own. The federal farm program is designed, in part, to maintain U.S. food security. As policymakers debate ways to build America’s energy security, I’m spreading the good news about the versatility of American agriculture. Blessed with agricultural abundance and world-class productivity, our farmers and ranchers are able and willing to supply renewable energy that will help keep the economy running strong. Producing more domestic energy will help shield our entire economy and consumers from foreign oil cartels. Thanks in part to efforts I have led in Congress to promote renewable fuels, including the Renewable Fuels Standard that will ensure the use of 7.5 billion gallons of ethanol annually by 2012, the domestic ethanol industry is gaining speed. The U.S. currently has a capacity to produce more than 5.3 billion gallons of ethanol each year with 110 ethanol facilities in operation. What’s more, 53 new ethanol facilities are under construction, including seven expansions underway. Domestic supplies are meeting demand. Reducing the stranglehold that imported energy has on the U.S. economy is key to America’s long-term prosperity. That’s why I continue my tireless crusade to promote affordable, clean-burning, renewable energy. And when it comes to producing green energy, there’s no place like home. Now is not the time to eliminate the import tariff on ethanol. Granting duty-free treatment to imported ethanol would take the United States a step backward in our march towards greater energy independence.