U.S. Senate extends renewable energy tax credits

By Erin Voegele
Web exclusive posted Sept. 24, 2008 at 11:49 a.m. CST

The U.S. Senate passed the Renewable Energy and Job Creation Act of 2008 by a vote of 93 to 2 on Sept. 23. If passed by the U.S House of Representatives and signed into law, the $18 million package would extend renewable tax credits for biomass, wind, solar, geothermal and renewable fuel producers.

In particular, the legislation would extend tax credits for producing electricity from closed- and open-looped biomass, geothermal or solar energy, small irrigation power, municipal solid waste, trash combustion, and qualified hydropower until 2011. Furthermore, it would expand the definitions of rules for open-loop biomass facilities, qualified trash combustion facilities, and non-hydroelectric dams for purposes of such credit. Cellulosic biofuel would also be included within the definition of biomass ethanol plant property for the purposes of bonus depreciation.

The bill also includes an increase and extension through 2009 of income and excise credits for biodiesel and renewable diesel. It would also disqualify foreign-produced fuel that is used or sold for use outside the United States from claiming the credits available for alcohol, biodiesel, renewable diesel, and alternative fuel production. The provision is intended to eliminate abuse by companies that produce foreign fuel which enters the United States and receives the tax incentive, and is shipped to a third country for use.

"The American Soybean Association greatly appreciates the work of the Senate to extend the biodiesel tax credit," said John Hoffman, president of the American Soybean Association. "Passage of this legislation to extend the biodiesel tax credit enhances the viability of the U.S. biodiesel industry, which is an important market for U.S. soybean farmers. ASA now urges House members to swiftly pass the measure and send it to the President to be signed into law."

The legislation now moves to the U.S. House of Representatives for consideration. "Everyone should understand we have had a very difficult time getting to the point where we are and passing this final version of this bill," said U.S. Senate Majority Leader Harry Reid. "If the House doesn't pass this, the full responsibility of this not passing is theirs, not ours."