May 19, 2008

Australian government reviews grant for ethanol

The federal government of Australia is reviewing the funds to the ethanol industry as concern grows about the link between biofuels and global food shortages.

Last year alone, around US$42 million in commonwealth subsidies was paid to four ethanol producers for 110 million litres of fuel.

While Resources, Energy and Tourism Minister Martin Ferguson refused to rule out in totally axing the programme yesterday, he said that the review would be finalised in the second half of this year. Last month the Productivity Commission called for an urgent review of the industry amid warnings that it was pushing up feedgrain prices.