In the US, at the end of 2010 Congress extended the ethanol tax credit (VEETC) of $0.45/gal. for one year with the clear message to the industry and lobby groups that it wanted a long-term solution to be passed and implemented by the end of 2011. Following are some of the policy options that are being considered in 2011:

  • Continue the 45 cent/gallon subsidy and the import tariff as at present
  • Shift the subsidy from blender to biofuel producer
  • Subsidy that varies with the price of crude oil or gasoline
  • Subsidy based at least in part on performance in reducing GHG
  • Subsidy based on energy content of the biofuel
  • Subsidy that is applied only for the quantity of biofuel in excess of the RFS
  • Eliminate the subsidy and the import tariff, and use funds for other purposes
  • Combinations of these options