Tax ruling may open door to ETBE market

21 August 1995 00:00  [Source: ICB]

THE MARKET for ethyl tertiary butyl ether (ETBE) could be opened up in the US following a final ruling from the Internal Revenue Service extending tax subsidies for ethanol to the fuel oxygenate.

However, sources say that the tax ruling, which comes into effect after 30 September, is complex and its impact is still being studied by refiners and producers.

In the past, the ethanol content of ETBE has qualified for the ethanol tax credit but, unlike ethanol blending which is carried out by the gasoline marketers, there was no mechanism for ETBE producers to recover directly the tax credit.

The latest ruling is understood to enable the tax collection point to be moved from the terminal to the refinery which should alleviate this problem.

If ETBE production becomes attractive, Arco Chemical, a major producer of MTBE, could start manufacturing this alternative oxygenate. Arco has carried out limited production runs of ETBE at Coastal's Corpus Christi facility.

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