Congress overrides Bush veto to cut corn ethanol subsidies and create incentives for second-generation fuels

Legislation that promotes biofuels made from non-food crops and offers incentives to move away from corn ethanol production has been passed in the US, prompting delight amongst alternative fuel researchers.

The $290 billion Food, Conservation and Energy Act of 2008 was passed on 22 May, after the US Congress overturned President Bush’s veto of the legislation. 

The act institutes a production tax credit of up to $1.01 (?0.51) per gallon for second-generation biofuels, and it provides $320 million in loan guarantees to help manufacturers develop commercial-scale refineries for cellulosic ethanol, biobutanol and biobased hydrocarbons.

"We need to expand the industry beyond corn, and that means using cellulosic biomass" - Paul Winters, Biotechnolgy Industry Organization

In addition, the law supports a programme to encourage farmers to establish and grow biomass crops in areas around biomass facilities, such as biorefineries, to reduce the environmental impacts of transporting fuel feedstocks. At the same time, the law trims subsidies for corn ethanol from 51 cents to 45 cents a gallon. 

The Biotechnolgy Industry Organization (Bio) - which represents over 1200 biotechnology companies, academic institutions, state biotechnology centres and related organisations around the world - hailed the passage of the new law as a victory.

’It completes the picture of the Energy bill,’ Bio spokesperson Paul Winters told Chemistry World, referring to the 2005 law that created a 36-billion-gallon market for biofuels. ’To meet the level of demand that is mandated by the Energy bill, and is necessary, we need to expand the industry beyond corn, and that means using cellulosic biomass,’ he says.

But not everyone is happy. During a 23 May press briefing, White House spokesperson Dana Perino said the bill’s passage into law reflects poorly on Congress. ’They’ve made a decision in an election year that they can throw caution to the wind and throw fiscal discipline out the window and pass a bill that will cost taxpayers an enormous sum of money,’ she said.

Perino also referred to Congress’s error in forwarding the bill to President Bush with a 34-page section missing. Lawmakers were left scrambling to address the clerical hiccup as they prepared to go on a week-long spring recess until early June.

Veto aside, Bush does seems to agree with the general policy approach underlying the new law. At a 29 April press briefing, he said: ’The solution to the issue of corn-fed ethanol is cellulosic ethanol, which is a fancy word for saying we’re going to make ethanol out of switchgrasses, or wood chips.’

Rebecca Trager, US correspondent for Research Day USA