Iowa Senator leads effort to close loophole circumventing Brazilian ethanol tariff

In Washington, Sen. Chuck Grassley is leading an effort to close a loophole allowing oil companies to circumvent the tariff on Brazilian ethanol. The loophole allows oil companies to receive a rebate of taxes paid on importing Brazilian ethanol when they export jet fuel. More than 434 million gallons of Brazilian ethanol were imported into the United States last year. “It’s nonsensical to say ethanol is the same as jet fuel,” Sen. Charles Grassley, R-Ia. “The (drawback) law makes no sense.”

There is a 54 cent per gallon tariff in place on Brazilian ethanol imports. The tariff is designed to offset the 51-cent per gallon credit given for each gallon of ethanol blended with gasoline, regardless of where the ethanol is produced. Otherwise, US taxpayers would be subsidizing the Brazilian ethanol industry with the excise tax credit.

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