American Coalition for Ethanol Statement on Ethanol Tax Credit Reform and Compromise in U.S. Senate

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Legislative compromise in the U.S. Senate that reforms the existing Volumetric Ethanol Excise Tax Credit (VEETC) or the “blenders’ credit.”

Soux Falls, SD

Behind-the-scenes bipartisan negotiations have resulted in a legislative compromise in the U.S. Senate that reforms the existing Volumetric Ethanol Excise Tax Credit (VEETC) or the “blenders’ credit.” The compromise would end VEETC on July 31, invest over $1 billion in deficit reduction, and provide modest incentives for blender pumps, cellulosic biofuel, and small ethanol producers.

In response, Brian Jennings, Executive Vice President of the American Coalition for Ethanol, released the following statement.

“We thank Senators John Thune (R-SD) and Amy Klobuchar (D-MN) for their support and leadership in negotiating this compromise, and we echo the sentiments of Senator Thune who recently called the legislation ‘trying to make the best of a bad situation.’ Despite its shortcomings, this compromise represents the art of the possible given the temperament of Congress and buys us time to tackle unfinished business by building a new and broader coalition. ACE will support efforts in Congress to enact this legislation into law by the end of July.”

“ACE is pleased with the three-year blender pump tax credit, a modest but important down-payment on consumer fuel choice. We’ll work with marketers to take full advantage of the improved incentives to convert to blender pumps. ACE is also grateful that the Small Ethanol Producer Tax Credit, which is crucial for many of our independent and farmer-owned members, was extended for one year.”

“We are disappointed that the variable incentive, a key and low-cost safety net for independent and farmer-owned plants facing market volatility that Senators Klobuchar and Thune included in their original legislation, did not make it into this compromise. And, we know that there is much more work to be done with regards to deployment of Flexible Fuel Vehicles and supporting the sale of midlevel ethanol blends and E85. Finally, unnecessary limitations placed on the cellulosic biofuel incentives need to be fixed in order to meaningfully help spur the commercialization of these promising fuels. ACE will continue working with the Administration and Congress on these unfinished priorities.”

“Regardless of how some will try to characterize eliminating VEETC, doing so will raise gas taxes on ethanol blended fuel. Moreover, it is an outrage that some elected officials continue to protect billions in subsidies for the oil industry, including a very recent vote against cutting $4 billion in Big Oil tax subsidies. It is time for Congress to repeal oil tax subsidies.”

The American Coalition for Ethanol (ACE)

The American Coalition for Ethanol (ACE) is the grassroots voice of the U.S. ethanol industry, a national advocacy association for the ethanol industry with nearly 1,500 members nationwide, including farmers, ethanol producers, commodity organizations, businesses supplying goods and services to the ethanol industry, rural electric cooperatives, and individuals supportive of increased production and use of ethanol. For more information about ethanol or ACE, visit or call (605) 334-3381.

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