Bush's 2009 Budget May Propose Change to Ethanol Tariff

The Bush administration's next 2009 budget may propose eliminating the US tariff on ethanol imports, US Energy Secretary Samuel Bodman suggested Tuesday, according to Reuters.

Speaking at the US Chamber of Commerce, Bodman said the 2009 budget, which will be sent to Congress next Monday, "will start to deal with that question" of whether the 54-cent-a-gallon import tariff should be allowed to expire at the end of this year or whether it should be renewed. "I believe that, the best I can tell, [the US ethanol industry] is pretty close to being able to stand on its own," Bodman was quoted as saying.

This would be big news for Brazil, the world's biggest exporter of ethanol, which hopes elimination of the tariff will help boost investment in ethanol production there. The US ethanol industry has opposed removing the tariff fearing cheaper imports would kill future domestic investment. But those fears might be eased if Congress increases the current Renewable Fuel Standard.

- David Adams