Relative to a baseline that includes the VEETC
we consider two policy regimes, one in which the RFS is added to the preexisting VEETC
and a second regime in which the RFS replaces the pre-existing VEETC
Cutting the VEETC
immediately would result in a "saving" (an increase in tax revenues) of $3 billion, based on estimates that the subsidy costs the Treasury $6 billion per year.
In an earnings call with investors, Gene Edwards, Valero s Executive Vice President for Corporate Development and Strategic Planning, was asked about implications for the company if the VEETC
Energy Tax Act was replaced by the VEETC
, providing for the $0.
will extend to 2010 an existing tax incentive for using ethanol-blended gasoline and redirect funds generated by an excise tax on ethanol to the highway trust fund (HTF).
We use the recent VEETC
($0.45 per gallon) and cellulosic ($1.01 per gallon) subsidy levels rather than targeting the same emissions reduction as the RFS.
Both the credit, technically known as the volumetric ethanol excise tax credit (VEETC
), and the tariff are scheduled to expire on their own at the end of the year.
(41) As restructured by the Energy Act of 2005, all users pay the full excise tax on fuels, but ethanol users may take a $0.51 per gallon credit against the excise tax under the Volumetric Ethanol Excise Tax Credit (VEETC
1418, 1419 (Volumetric Ethanol Exercise Tax Credit (VEETC
Because of this concern, a Volumetric Ethanol Excise Tax Credit (VEETC
) was proposed.
"Provisions attached to the JOBS Act extend the ethanol production inventive through 2010, simplify the incentive with the Volumetric Ethanol Excise Tax Credit and extend the Production Tax Credit for wind and biomass-generated electricity." VEETC
will add as much as US$ 2 billion to the Highway Trust Fund, simplify the system used to implement the incentive and make all ethanol eligible for tax credit.
According to the National Corn Growers Association (NCGA), the bill's Volumetric Ethanol Excise Tax Credit (VEETC
) provision will extend to 2010 an existing tax incentive for using ethanol-blended gasoline and redirect funds generated by an excise tax on ethanol to the highway trust fund, while the small ethanol producer credit provision included in the bill will make farmer-owned cooperatives eligible for this tax credit, "which will provide millions of dollars per year in tax relief to the farmer owners."