Biofuel groups urge Congress to extend tax biofuel credits

By Erin Voegele | June 25, 2020

The Advanced Biofuels Business Council, Algae Biomass Organization, Biotechnology Innovation Organization, Growth Energy, National Biodiesel Board and Renewable Fuels Association sent a letter to the House Ways and Means Committee on June 19 expressing support for the proposed extension of tax incentives for advanced biofuels.

“As the Ways and Means Committee contemplates moving a package of clean energy tax provisions included in the GREEN Act, we would like to thank you for your vision and express our strong support for your proposed extension of the suite of advanced biofuels tax incentives,” they wrote.

The GREEN Act, released in November 2019, included multi-year extensions of the biodiesel tax credit, second generation biofuel income tax credit, the excise tax credit for alternative fuels and alternative fuel mixtures, the alternative fuel vehicle refueling property credit, and other tax credits important to the biofuels and bioenergy industries.

The letter discusses the environmental benefits of renewable fuels and stresses that “the advanced biofuels tax incentives featured in the GREEN Act will support U.S.-produced fuels that constitute a technological step beyond fossil fuel energy, boost feedstock prices and farmer incomes, encourage buildout of associated infrastructure, and back continued research that drives down the costs of biofuel production.”

Within the letter, the groups state that the need for stable biofuels tax policy is even more pressing now that it was in late 2019 when the GREEN Act was introduced. This is because the biofuels sector is amongst the industries hardest hit by COVID-19 pandemic.

“In a matter of weeks, more than half of the biofuels industry went completely offline, placing tens of thousands of jobs at immediate risk and straining rural economies,” the groups wrote.

“For these reasons, the long-term extension of the second generation biofuel producer tax credit, the special allowance for second generation biofuel plant property, the biodiesel and renewable diesel blenders credits, the extension of the begin construction date for section 45Q, and allowing a direct pay option for 45Q credits are all critical to our sector,” they continued. “Additionally, the investment credit for alternative fuel refueling infrastructure is another important component which will help our industry recover by incentivizing retail fuel outlets to make alternative fuel infrastructure investments and upgrades.”

The letter notes that most of these credits expire in just six months. “Providing durable multi-year extensions of these credits will confirm the federal government’s commitment to clean highway transportation fuels and sustainable aviation fuels, hearten investors, and support the construction of high-tech cellulosic and advanced biofuel refineries,” the groups wrote.

A full copy of the letter can be downloaded from the ABBC website.