Government failure - ethanol subsidies
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Excellent example of government failure and the law of unintended consequences here at the FT.com.
US ethanol, subsidised as a homegrown alternative to foreign oil, is being exported in record volumes.
The exports stand in contrast to the goals of US biofuels policy, which seeks to reduce dependence on imported fossil fuels in part by offering tax credits to companies that blend ethanol with petrol.
Rob Vierhout of ePure, a European ethanol trade association, said: “The blender’s credit was not set up with the intention to facilitate exports”. Government data last week showed 251m gallons in fuel ethanol exports in the nine months to September 30, more than double the 2009 total, with the US becoming a net exporter this year.
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