Today, six biofuel trade associations sent a letter to House and Senate leaders asking Congress for a multiyear extension of advanced biofuel tax credits. The Advanced Biofuels Business Council, Algae Biomass Organization, Biotechnology Innovation Organization (BIO), Growth Energy, National Biodiesel Board and Renewable Fuels Association sent the request in a letter to Senate and House leaders, Senate Committee on Finance leaders, and House Ways and Means Committee leaders.
Congress granted a two-year extension to the Second Generation Biofuel Producer Tax Credit, the Special Depreciation Allowance for Second Generation Biofuel Plant Property, the Biodiesel and Renewable Diesel Fuels Credit, the Alternative Fuel and Alternative Fuel Mixture Excise Tax Credit, and the Alternative Fuel Vehicle Refueling Property through the Protecting Americans From Tax Hikes Act of 2015, which became law on Dec. 18, 2015. While other energy production tax credits were extended through 2019, these provisions expire at the end of 2016.
The letter sent today states, “This 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. As leaders in a critical innovation sector in the United States, we are well aware of the financial constraints facing this country. However, as Congress works on developing energy tax extenders legislation, we urge you to ensure that advanced biofuels are part of the package. 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.”
Tom Buis, Co-chair of Growth Energy, stated, “These incentives are important in providing certainty for investment into second-generation biofuels.”
Brooke Coleman, Executive Director of the Advanced Biofuels Business Council, added, “There is no good rationale for letting temporary tax breaks for advanced biofuels expire against the backdrop of ongoing, permanent and substantial subsidies to fossil fuels. Congress must extend advanced biofuel tax incentives as long as our competitors in the sector – oil and gas – continue to receive special allowances from the federal government. To do otherwise would be to further distort private investment toward oil and gas.”
Renewable Fuels Association President and CEO Bob Dinneen said, “Short-term tax incentives are akin to new drivers in a stick shift vehicle. The cars haltingly lurch forward for a time, but suddenly stall. The advanced biofuel industry needs certainty if it is to remain commercially viable, as it continues to bring new facilities and technologies online. Longer term incentives would go a long way to making sure the industry continues its growth, and don’t leave consumers stalled along the way.”
Brent Erickson, Executive Vice President of BIO’s Industrial & Environmental Section, added, “For several years now, policy uncertainty at the federal level has undercut investment in cellulosic and advanced biofuels even while pioneering companies proved the technology and started up the first commercial-scale production facilities. It will take several more years for companies to plan, finance and build the next wave of advanced biofuel facilities. Stable policy in the form of a multiyear extension of these advanced biofuel tax credits is necessary to help companies secure capital for these projects.”
Anne Steckel, Vice President of Federal Affairs at the National Biodiesel Board, said, “Biodiesel producers across the country are ready to expand production and hire new workers, but they can’t do it when they don’t know what their tax liability will be in nine months. We need to end this cycle of on-again, off-again incentives and replace it with stable, long-term policy for clean fuels that encourages economic growth and innovation.”
Source: Biotechnology Industry Organization
Date: Apr 5, 2016