Senate Finance Committee to address tax extenders bill

By Erin Voegele | July 20, 2015

The U.S. Senate Committee on Finance is scheduled to address a tax extenders bill on July 21. Sen. Chuck Grassley, R-Iowa, recently announced he has secured the inclusion of tax incentives for cellulosic ethanol and biodiesel in the legislation, while several biofuel trade groups have spoken out asking the committee to extend several critical advanced biofuel tax incentives.

Grassley’s provisions in the tax package include a two-year extension of the cellulosic biofuels producer tax credit, which allows facilities producing cellulosic biofuels to claim a $1.01 per gallon production tax credit. The current credit expired at the end of 2014. Grassley’s provision would extend it through 2016.

He has also included a provision to extend incentives for biodiesel and renewable diesel for two years, through 2016. The extension would apply to the $1.00 per gallon credit for biodiesel, the 10-cent-per-gallon small agri-biodiesel producer credit, and the $1.00 per gallon tax credit for diesel fuel created from biomass.

In addition, Grassley’s provisions would extend the 2.3 cent-per-kWh renewable energy production tax credit and alternative 30 percent investment tax credit through Dec. 31, 2016.

Michael McAdams, president of the Advanced Biofuels Association, has issued a statement in support of the tax extenders package. “We applaud the Senate Finance Committee for proposing a two-year extension of several advanced renewable fuel tax provisions that expired at the end of 2014,” he said. “These credits provide important support for the emerging advanced and cellulosic biofuels industry. Many of our members are actively working to finance construction of manufacturing facilities, and capital markets appreciate the greater stability and certainty of a two-year extension compared to past cycles of annual expiration. ABFA looks forward to continue working with the Senate Finance Committee and industry partners to help advance this critical piece of legislation, which will help deliver the next generation of biofuels.”

 A group of seven biofuel trade organizations also recently sent a letter to Senate Finance Committee Chairman Orrin Hatch, R-Utah, and Ranking Member Ron Wyden, D-Ore., encouraging the extension of the second generation biofuel producer tax credit, the special depreciation allowance for second generation biofuel producer tax credit, the special depreciation allowance for second generation biofuel plant property, the biodiesel and renewable diesel fuels credit, and the alternative fuel and alternative fuel mixture excise tax credit. The letter was signed by the Advanced Ethanol Council, ABFA, Algae Biomass Organization, Biotechnology Industry Organization, Growth Energy, National Biodiesel Board, and Renewable Fuels Association.

“The advanced biofuels industry is at a critical stage in development. Last year, several new, commercial scale advanced biofuel facilities began operations and, despite a difficult financial market, the industry continues to make progress on dozens of additional projects,” said the trade groups in the letter. “Advanced biofuel tax credits have moved these projects to commercial production by reducing the cost of production and by developing first-of-kind technologies to deploy the most innovative fuel in the world.”

“As leaders in a critical innovation sector in the United States, we are well aware of the financial constraints facing this country,” continued the letter. “However, the United States’ global competitors are offering tax incentives for advanced biofuels and are attracting construction of new facilities. We encourage Congress to continue the development of these homegrown technologies and urge extension of these credits. Furthermore, domestic biofuel producers are competing with incumbent fossil energy industries who continue to enjoy tax incentives and other subsidies on a permanent basis.”

“In the interest of energy security, job creation, global competitiveness, and forward-looking policy, we urge you to move quickly to extend expired advanced biofuel tax provisions for multiple years retroactive to January 1, 2015. We look forward to working with you on this important matter,” said the trade groups in the letter.

Additional information on the hearing and legislation is available on the Senate Finance Committee website.