Trade Groups in US Seek Tax Credit Extension

Six biofuel trade associations in the US have written to Congress, asking it to extend advanced biofuel tax credits slated to expire later this year.
Trade Groups in US Seek Tax Credit Extension

The letter writers were the Advanced Biofuels Business Council, the Algae Biomass  Organization, Biotechnology Innovation Organization, Growth Energy, National Biodiesel Board, and the Renewable Fuels Association.

In their letter, they ask the Congressional leadership to extend advanced biofuels incentives included in the "Protecting American from Tax Hikes Act of 2015."

These provisions included the 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.

"These credits are needed to stimulate capital investment and growth of clean energy production and are vital to ongoing development of the advanced and cellulosic biofuels industry. Unfortunately, these provisions are already set to expire at the end of 2016," the letter says.

The trade associations said the short-term expiration of tax incentives is jeopardizing the long-term investment necessary for advanced biofuels.

"This creates uncertainty for investors and industry about the availability of these credits in the future," the letter says.

Further, it says, "Extending some 2016 expiring energy tax provisions and not others creates a piecemeal approach and investment uncertainty across the energy sector and distorts the playing field for biofuel producers.

"Since 2009, the advanced biofuels industry has invested billions of dollars to build first-of-akind demonstration and commercial-scale biorefineries across the country. Despite the challenges associated with developing new technologies, as of 2015 there were five commercial scale cellulosic biorefineries with a combined capacity of more than 50 million gallons within the United States. There are now 36 biorefineries generating cellulosic biogas in this country, with a combined annual capacity of approximately 185 million gallons," the trades groups say.

There are currently more than 130 biorefineries producing nearly 1.5 billion gallons of biodiesel and renewable diesel across the US, with production in nearly every state in the country.

"However, the continued growth of the advanced biofuels industry will require additional support," the trade associayion said. "As a result, we encourage Congress to pass a multi-year extension of these provisions. We would also request Congress reject the creation of a phase-out for these renewable energy incentives.

"The PTC and associated depreciation provisions have never been enacted for a sufficient length of time to allow investors to depend upon their existence once the facilities are eventually placed in service. Ending the tax credits on an arbitrary date in the near term will hamper the utilization of these incentives for an industry where financing and constructing new facilities takes on average five to six years" the letter says.

For additional information:

Trade Group Letter to Congress

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