New tax, oversight bill aims to extend biofuel tax credits

On Nov. 26, House Ways and Means Committee Chairman Kevin Brady, R-Texas, released a tax and oversight legislative package that includes extensions for several biofuel-related tax credits, including those for renewable diesel and second-generation biofuels.

The bill aims to extend and phase out the biodiesel and renewable diesel tax credit. The tax credit would be maintained at its current rate of $1 per gallon for 2018 through 2021. For 2022, the tax credit would be reduced to 75 cents per gallon. In 2023, the credit would fall to 50 cents per gallon, followed by 33 cents per gallon for 2024, after which it would expire.

In addition, the legislation extends several biofuel and bioenergy-related tax credits through 2018, including the second generation biofuel producer credit, the alternative fuel refueling property credit, the credit for electricity produced from certain renewable resources, the special allowance for second generation biofuel plant property, and the excise tax credits relating to alternative fuels.

The National Biodiesel Board has spoken out in support of the legislation. “The biodiesel industry has long advocated for a long-term tax extension to provide certainty and predictably for producers and feedstock providers,” said Kurt Kovarik, vice president of federal affairs at the NBB. “Too often, the credit has been allowed to lapse and then reinstated retroactively, which does not provide the certainty businesses need to plan, invest, and create jobs. We appreciate the recognition that the biodiesel industry is integral to our domestic energy needs through this long-term extension. We look forward to working with our supporters on Capitol Hill to ensure that consumers, producers and marketers benefit from a long-term, forward-looking pro-growth tax policy.”

A full copy of the legislation can be downloaded from the committee’s website.