Iowa Rep. Cindy Axne has introduced legislation to make the second-generation biofuel producer tax credit permanent.
The legislation will renew a $1.01 per gallon tax credit for producers, which expired at the end of 2017.
“Supporting advanced biofuel production is a smart and profitable investment for our farmers, our rural communities and our renewable fuel future,” said Axne, a Democrat. “I urge my colleagues in the House and Senate to pass this tax credit, which should have never expired in the first place.”
Iowa Republican Sen. Chuck Grassley, together with Sen. Ron Wyden, D-Oregon, introduced S. 617 in the Senate on Feb. 28 to extend the second-generation biofuel producer tax credit.
Second-generation biofuels, also known as advanced biofuels, are fuels that can be manufactured from various types of biomass, including plant materials and animal waste.
The National Biodiesel Board is urging House leaders to make a multiyear extension of the biodiesel and renewable diesel tax incentive a priority.
In February 2018, Congress retroactively extended the tax incentive for 2017, leaving it expired for 2018 and beyond.
“The future of the credit has been unclear for more than 14 months,” reads a letter the NBB delivered to House leaders. “That uncertainty is curtailing investments in new plants and capital projects to upgrade existing plants. It is beginning to force some producers, blenders and distributors to cut back purchases of raw materials and deliveries of renewable fuel to consumers, which will have impacts across the economy.”
The U.S. biodiesel and renewable diesel market grew from about 100 million gallons in 2005, when the incentive was implemented, to more than 2.6 billion gallons annually since 2016.
“The biodiesel industry has long advocated for a multiyear extension of the tax incentive,” said Kurt Kovarik, Vice President of Federal Affairs with NBB. “But because the incentive has been expired for 15 months – the longest period of uncertainty for this policy since its start – it is urgent that Congress act immediately to provide the biodiesel industry certainty for 2018 and 2019.”