DES MOINES - The Government Accountability Office (GAO) announced earlier this week that the ethanol industry does not need a subsidy now that refiners are required to use the biofuel, the Des Moines Register reports.

The GAO characterized the 45-cents-per gallon tax credit as one of the country??s wasteful programs that could be eliminated to help address the budget crisis.

The tax credit will cost the government $5.4 billion this year, though it is due to expire at the end of the year. If it is extended, the GAO projected the lost revenue to grow to $6.75 billion by 2015.

"The ethanol tax credit was important in helping to create a profitable corn starch ethanol industry when the industry had to fund investment in new facilities, but it is less important now for sustaining the industry because most of the capital investment in corn starch ethanol refineries has already been made," the GAO said.

Usage mandates for corn ethanol are at levels high enough "to ensure that a market for domestic ethanol production exists in the absence of the ethanol tax credit," the GAO said, adding that production may soon exceed the amount that can be blended into gasoline domestically.

The ethanol industry maintains that it still needs subsidies, but it is divided about what to do with the tax credits. Growth Energy has proposed shifting the money to other needs, while other have argued that the credit is still needed.

The Renewable Fuels Association said that "ethanol producers are committed to reforming the tax incentive" but that any discussions about that must include subsidies for the oil industry.

Food industry groups and environmentalists were among several groups that sent a letter earlier this week to congressional leaders, urging them to end the ethanol subsidy.

"At a time of spiraling deficits, we do not believe Congress should continue subsidizing gasoline refiners for something that they are already required to do [by the annual mandates]," the groups said.