A renewal of the ethanol blenders tax credit, reinstatement of biodiesel incentives and help for wind and solar companies have all reportedly made it into the Senate compromise that extends both unemployment benefits and expiring tax cuts.
According to the Renewable Fuels Association, the compromise legislation would extend the current Volumetric Ethanol Excise Tax Credit (VEETC) just through 2011 at the current rate of 45 cents per gallon. Additionally, the package with also extend the offsetting tariff on imported ethanol through 2011. Both policies are set to expire at year’s end.
“Ethanol producers greatly appreciate the determination of those members of Congress who worked tirelessly to continue America’s investment in ethanol production,” said Chuck Woodside, RFA Chairman and CEO of KAAPA Ethanol in Minden, Nebraska. “As a farmer-owned ethanol producer, extending tax incentives for ethanol use is a critical step allowing ethanol to compete with a heavily subsidized oil industry. We are committed to the process of responsible reform of ethanol tax policy, but such a process would have been infinitely more difficult in the absence of the existing tax policy.”
Listen to or download Woodside’s full statement here: Chuck Woodside
Growth Energy CEO Tom Buis says the action means more time for the industry. “An extension of the credit will give the industry certainty, and Congress the opportunity, to move forward with reforms that will remove the infrastructure barriers to the fuels market, such as our Fueling Freedom plan, next year,” Buis said in a statement.
The law will also reinstate the $1 a gallon biodiesel tax credit, retroactively for 2010 and through 2011, according to Sen. Charles Grassley (D-IA). “Our country spends more than $730 million a day on imported petroleum,” Grassley said in a statement. “Letting these items lapse would be a textbook case of penny-wise, pound-foolish legislating.” In addition, Bloomberg reports that a tax-grant program for wind and solar-energy companies will be extended for one year under the deal.
A first test vote on the package has been scheduled for Monday afternoon. Summary of the tax deal can be found here.