WASHINGTON (Dow Jones)--U.S. tariffs are designed to block ethanol imports at a time when the country needs to need to be securing new sources of energy, the U.S. Chamber of Commerce said in a report released this week.
The Chamber's Blueprint for Securing America's Energy Future highlights the need for free-flowing trade when it comes renewable fuels and stresses the 54-cents-per-gallon tariff is an impediment.
"This poses a significant obstacle to ethanol imports," the report said.
Ethanol produced in the U.S. is primarily corn-based fuel. Brazil, another major ethanol-producing country, already exports some of its sugarcane based fuel to the U.S. despite U.S. tariffs.
Biofuels, like ethanol, should be treated the same as other commodities that the U.S. benefits in trading on an international level, according to the Chamber.
"As the biofuels market here in the United States grows and matures to meet (government requirements) we should seek also to 'commoditize' biofuels and help create an international market to increase their trade by harmonizing fuel standards," the report said. "Eventually, free trade of biofuels should be the goal, and we should be prepared to reconsider the tariff on imported ethanol as global demand and markets progress."
Congress earlier this year approved a two-year extension to the U.S.'s 54-cent-per-gallon tariff on imported ethanol. U.S. Department of Agriculture Secretary Ed Schafer told Dow Jones Newswires in a recent interview that he would have liked to see Congress allow the tariff to expire.
Another government support for U.S. ethanol is a tax credit for gasoline companies that blend in ethanol, and that was also criticized in the U.S. Chamber of Commerce report.
"These tax credits are disjointed and inconsistent, and in large part they are passed on to motorists," the report said.
Congress passed a new renewable fuels standard in December that mandates 9 billion gallons of ethanol be blended into gasoline this year. Next year, that climbs to 10.5 billion gallons, and it increases yearly until it reaches 15 billion gallons in 2015.
U.S. gasoline producers receive government tax credits for blending in ethanol, estimated to be worth a total of roughly $4 billion this year,
-By Bill Tomson; Dow Jones Newswires; 202-646-0088; bill.tomson@dowjones.com