The Renewable Fuels Association (RFA) recently praised the bipartisan Renewable Fuels Reinvestment Act (RFRA) introduced by Reps. Earl Pomeroy (D-ND) and John Shimkus (R-IL). The bill, HR 4940, would extend the 45¢ Volumetric Ethanol Excise Tax Credit (VEETC), commonly called the blenders’ credit, and the secondary tariff on imported ethanol until Dec. 31, 2015. It would also extend the Small Producers Tax Credit and the Cellulosic Ethanol Production Tax Credit to Jan. 1, 2016.

“Allowing the tax incentives for ethanol to expire is simply not an option,” says RFA President Bob Dinneen. “Failure to extend these incentives would force 112,000 Americans out of their jobs and shutter nearly two out of every five ethanol plants operating today. Long-term extensions of these important incentives are good policy that encourages investment in current and next generation ethanol technologies."

Congressman Pomeroy adds: “At a time when our economy is struggling, we cannot afford to let these tax incentives expire and stymie the growth we have seen in our ethanol industry. This is a bipartisan bill that will promote not only economic growth, but also the transformation of our energy industry from one that is reliant on foreign oil to one that is based on energy that's grown in farm fields in the heartland of America,” he says.

“I have been a long-time supporter of renewable fuels,” Congressman Shimkus says. “Extending the ethanol and cellulosic tax credits helps give much needed certainty to the industry and will continue to help our nation’s energy security.”

Adds Dinneen, “Representatives Pomeroy, Shimkus and their fellow cosponsors are showing tremendous leadership and foresight. I urge all members of Congress to take this opportunity to learn the real facts about American ethanol production and, ultimately, pass this bill as soon as possible.”

Extending the tax incentives for all ethanol is the top legislative priority of RFA members. Specifically, the RFRA would:

Last week, the RFA released a study detailing the damaged that would be inflicted upon the domestic ethanol industry if the tax credits were allowed to expire. Specifically, the report noted that the expiration of the tax incentive would have the following results:

Noting that the tax incentives and the Renewable Fuels Standard (RFS) requiring the use of ethanol are complimentary policies necessary to encourage a domestic industry, RFA’s Dinneen says:

“The question is not whether ethanol will be used – the RFA requires it. The question is, from where will the ethanol come? Extending the tax incentives ensures that both the grain-based as well as cellulosic sources of ethanol needed to meet the RFS are produced domestically. Without tax incentives to support domestic production, the RFS by itself will simply allow increased US dependence on imported biofuels – a result that will undermine the US ethanol industry and contribute to additional job losses.”

A Senate companion bill is expected soon.