Over the last two years, laws and regulations benefiting the ethanol industry have been the subject of a heated battle in the U.S. Congress – between the industry itself and environmentalists. The showdown has focused on two items: the Renewable Fuels Standard (RFS) that establishes a minimum yearly percentage of ethanol and other biofuels to be blended with gasoline and the Volumetric Ethanol Excise Tax Credit (VEETC), a tax that, for years, gave the American ethanol industry an advantage. In the end, the ethanol industry won the battle to keep the RSF but the environmentalists won too, by killing the VEETC.

In Latin America, the battle is about maintaining a obligatory percentage of ethanol in gasoline. In the region, the industry has been successful in securing loans from the World Bank Group, the Inter-American Development Bank and the Development Bank of Latin America CAF. The loans have totaled more than $1.4 billion over the last eight years. That money is being used to develop the sector and help it stay afloat. Another strategy the industry uses to get its way in the halls of power – political contributions to powerful politicians.

"Corn lobbying – corn is a raw material for ethanol- is one of the biggest and most powerful in the US. They have very deep pockets and spend a lot of money in Congress to make their goals known", said Michal Rosenoer, one of the key players on the environmentalists' side. She oversaw biofuels policy for Friends of the Earth, an organization that by October 2012 had reported $18 thousand spent on lobbying for the year.

While environmentalists fight against ethanol, the biofuel industry's battle is against the oil industry.

"The US government, according to the Congressional Budget Office, spent 52 billion on oil subsidies in 2011. So, it makes me laugh on the one hand and really angry on the other hand when the government continues to subsidize the most profitable industry in the planet and we're having a discussion about the ethanol industry", argued Bliss Baker from the Global Renewable Fuels Alliance, an international association that represents renewable fuels producers around the world.

The New England Center for Investigative Reporting and Connectas reviewed -- in the United States, Brazil, Peru and Colombia—records of companies and associations linked to the ethanol market, loans by multilateral organizations, political campaign contributions and spending on lobbying to assess how the industry is wielding its power to impact public policies.

The lobbying information in the United States comes from the Center for Responsive Politics, which collects the official reports of lobbying done in Washington, and was processed with the support of the MIT Computer Science and Artificial Intelligence Laboratory.

This investigation found that at least 5,980 organizations or companies have done lobbying on issues related to ethanol since 2000. About 37 of them are the main lobbyists for the ethanol industry.

At the top of the list of organizations linked with ethanol that have invested the most in lobbying since 1998 are: National Farmers Union – $14 million, National Corn Growers Association and Renewable Fuels Association – $8 million each and Growth Energy – $5 million. Growth Energy was recently established in November 2008 and started lobbying at that time.

In 2012 the Renewable Fuels Standard was a main topic of debate in Congress and the Senate. About 17 million dollars was spent lobbying in favor or against the RFS, according to lobbying records.

For Michael McAdams, president of the Advanced Biofuels Association, "the Renewable Fuels Standard is the Holy Grail. It is the cornerstone of the cooperation policy between the federal government and the advanced biofuels industry".

Craig Cox, from the Environmental Working Group, says that the RFS is environmentalists' main concern and the focus of their lobbying and opposition.

"The mandate is now the only truly influential federal policy, so that is our real objective," COX said.

Taxes and subsidies
In 2011 lobbying also focused on the Volumetric Ethanol Excise Tax Credit (VEETC) and the taxes on ethanol imported into the United States.

The VEETC, a tax incentive of $0.45 cents for each gallon of ethanol used in the gasoline blend, cost the American people around six billion dollars in 2011 according to the United States Government Accountability Office. In this debate, the scale tipped towards the environmentalists.

By that year, they had several campaigns against the renewal of this law. Environmentalists believe corn ethanol doesn't benefit the environment and affects both food prices and the food chain because ethanol's raw material—corn--serves as food for people and feed for livestock. That argument is supported by other organizations including Oxfam and the New England Complex Systems Institute, an independent academic research and educational institution.

"Essentially Friends of the Earth along with a few other key groups like Action Aid, Environmental Working Group, the animal agriculture groups and some conservatives, teamed up and said this tax credit was bad for consumers and for the environment. It was a huge hand-out to the oil industry to support a dirty fuel", said Michal Rosenoer, who was the biofuels expert for Friends of the Earth.

The pro-ethanol forces argued that the percentage of corn in the U.S. used for biofuel production is low. "Only three percent of the world's grain supply was used by the U.S. ethanol industry in 2011 and 2012 and the amount of grain available for non-ethanol uses was at a record high", reports the Renewable Fuels Association in an ad on the organization's website.

Rosenoer recalls that when it was clear the scale was leaning in the environmentalists' favor, ethanol representatives switched their stance and began saying the industry was mature and no longer needed a tax credit.

"Whenever an industry starts claiming victories about losing a huge amount of money, you know they have really lost," Rosenoer said.

In their attempt to save the VEETC, the ethanol industry spent around $9 million on lobbying, according to records reviewed by The New England Center for Investigative Reporting and Connectas.

The other battle-- for and against a tax on foreign ethanol designed to protect the American industry— pitted international companies against American ethanol businesses. In 2011 Brazil won an important victory when the tax wasn't renewed.

The tax-- designed to promote ethanol production in the United States- placed a tariff on imported biofuel, including ethanol from Brazil. This law expired in 2011 thanks in part to lobbying done by the Brazilian Sugarcane Industry Association (União da Indústria de Cana-de-Açúcar – Unica) in 2010 and 2011.

Unica, formed by sugar and ethanol producing companies in Brazil, has hired lobbying firms in Washington and Brussels since 2007, according to Leticia Phillips, the office's representative in the United States.

Her job is to increase awareness of Brazilian ethanol in the United States, to dissolve myths about sugarcane ethanol from Brazil and to "educate the legislators who don't know about the industry", said Phillips.

Leticia Phillips explained her organization's lobbying effort.

"It was really explaining what we are all about for those who didn't understand or didn't know the industry. And I think that this was the job- the good job - that we did with our lobbying firm, to put together a strategy where we would sit with these people and explain from their point of view the benefits of this. So it was a very straight forward process," Phillips said.

Between 2010 and 2011 Unica spent over $500,000 lobbying in the United States, much of that to kill the tariff on imported ethanol.

Of the international ethanol companies, Maple Etanol from Peru also did lobbying in the United States to try to tilt the scale in their favor in trade agreements.

Between 2009 and 2010, the ethanol producing company from Peru, invested at least $70,000 in lobbying for the implementation of the Free Trade Agreement between the Unites States and Peru and the Energy Independence and Security Act that has, among its objectives, to increase production of clean renewable fuels.

Local bets
In Colombia and Brazil, ethanol companies have also donated to a variety of political campaigns-- from councilmen to mayors and even to presidents.

In Brazil, in the 2012 councilmen and mayoral elections, the Supreme Electoral Tribunal records show that ethanol businessmen invested at least $2.7 million. The ones that benefited the most from this were the candidates from Sao Paulo who received half of that money. This is one of the districts were the most ethanol is produced.

Copersucar and the Cosan Group, two of the ethanol industry's largest companies in Brazil, made the most substantial contributions. Copersucar, with its associates' conglomerate, contributed about $525,000. Cosan gave candidates $422,000.

On the Colombian side contributions have been smaller. The Consejo de Redacción –a journalist's organization- database records show that between 2002 and 2010 three of the main ethanol producing companies (Manuelita, Mayagüez and Ingenio Risaralda on the same team) made contributions of about $160,000.

Contributions made in regional elections were targeted to candidates from the Cauca Valley in Colombia where ethanol is produced. In the presidential elections of 2002 funds were given to the ex-president Alvaro Uribe Vélez (around $40,000) and his opponent, Noemi Sanin Posada (around $10,000). The contributions were made a year after a law in favor of biofuels was approved.

In Latin America, ethanol businessmen have also received financing through soft loans, which offer low interest rates to promote investment. The World Bank, the Inter-American Development Bank and the Development Bank of Latin America CAF have contributed at least $1.4 billion in loans since 2005 for the development of projects tied to the ethanol industry in the region.

Brazil, Colombia, Peru, Guatemala, Nicaragua, Suriname, Mexico and El Salvador have all received this kind of support.

Brazil is at the top of that list with seventy percent of the total value ($988 million) of credit given by multilateral organizations for ethanol projects. Among the companies receiving benefits is one of the ethanol market leaders. Cosan, along with USJ Acucar e Alcool, Vale do Parana and Ituitaba Bioenergia.

According to records from the World Bank, the company from the USJ Araras project, which received $65 million in loans, reported in 2011 that it was responsible for directly employing 4,391 people and that it paid $7.8 million in taxes and fees to government authorities.

The second country that gets financing this way is Peru. It received $130 million from the World Bank, the Inter-American Development bank and the Development Bank of Latin America CAF. The money was for one project: the construction of an ethanol production factory run by Maple Etanol.

This project approved between 2007 and 2009 prompted complaints from the people of Piura. In 2008, residents from Ignacio Escudero, el Arenal, la Huaca and the farmers community of San Lucas de Colán complained about irregularities in the process of the sale of the land by the regional government to Maple Etanol and Caña Brava for an ethanol project they claimed would harm the land and water.

Records from the advocacy office in Peru indicate that until 2010, both sides were not talking with each other. However, the 57th report of social conflicts from the social conflicts department of the advocacy office of 2008 indicates that Maple announced that it was going to consider returning the land to the community and that the community was willing to dialogue with the company about this. The subject of the land return wasn't referred to again in further social conflicts reports and since 2012 Maple has produced ethanol in Peru.

The International Financing Corporation of the World Bank indicates that the Compliance Advisor Ombudsman (CAO) is in charge of following and reviewing the projects that have been awarded funds. This advisor reviews the complaints of people who believe they have been affected by a project and tries to offer solutions in these situations.

The case of Maple Etanol in Peru was investigated by the CAO starting in 2010 and was closed in May 2012. In the process dialogue between the company and community leaders was promoted to try to reach a mutual agreement. Not all the disputes were settled because the community chose to withdraw from the process in August 2011. After two years the advisor concluded that the case didn't need an audit from the World Bank and closed it without further action.

In 2013 the battle for and against ethanol is expected to continue. The organizations and companies are already prepared. The Renewable Fuels Standard, which was not eliminated in 2012 after a long struggle, will remain as policy and continue being part of the debate in Washington. Other issues such as the inclusion or non-inclusion of a minimum quantity of ethanol (15 percent) in U.S. gasoline will also be part of the agenda.

Associations and businessmen aren't letting their guard down. Both sides have said they are ready and have begun to establish their positions since president Obama's re-election last November.

Referring to the Renewable Fuels Standard and the new Congress, Bob Dinneen, president of the Renewable Fuels Association said in a statement to the media:

"We're expecting hearings. We're expecting attacks. We're ready for all of that". The bets are open.