The Senate Finance Committee Tuesday approved a two-year extension of various tax credits that expired at the end of 2014, including those for biodiesel, cellulosic ethanol, and wind energy.
The bill contains a two-year extension of the Second Generation Biofuel Producer Tax Credit, the Special Depreciation Allowance for Second Generation Biofuel Plant Property, and the Alternative Fuel Mixture Excise Tax Credit.
Renewable Fuels Association president and CEO Bob Dinneen commended the committee’s leadership for recognizing how important these tax credits are for the continued growth and innovation of the U.S. biofuels industry. “Stability in the marketplace is crucial to encouraging development in second-generation biofuels, like cellulosic ethanol,” said Dinneen. “By extending these incentives, the Committee has helped to provide that needed stability. We look forward to working with the Senate Finance Committee specifically and Congress generally on comprehensive tax reform.”
Dinneen says passage of the tax credit extensions, which will be retroactive, still has a long way to go. “Still needs to get through the floor of the Senate and be conferenced with a bill from the House side,” said Dinneen. “But it’s progress.”
Last year Congress passed retroactive tax credits for 2014 in December, two weeks before they expired again.
Listen to Dinneen’s comments here: RFA CEO Bob Dinneen comments on tax credits progress
Thirty-six U.S. senators from both sides of the political aisle urged the Obama administration to strengthen biodiesel volumes in a pending Renewable Fuel Standard (RFS) proposal from the EPA. The National Biodiesel Board welcomed the call.
“While the proposal is a positive step for biodiesel, we remain concerned that the proposed biodiesel volumes for 2016 and 2017 fail to adequately recognize the domestic biodiesel industry’s production capacity and its ability to increase production,” the senators wrote in a letter to EPA Administrator Gina McCarthy and other administration officials. “Biodiesel is the first EPA-designated advanced biofuel under the RFS to reach commercial scale production nationwide. It is exceeding the goals that Congress envisioned when it created the RFS with bipartisan support in 2005, while creating jobs, generating tax revenues, reducing pollution, and improving energy security. We urge you to support continued growth in the domestic biodiesel industry by making reasonable and sustainable increases in the biodiesel volumes for 2016 and 2017 in the final rule.”
Sens. Chuck Grassley (R-Iowa), Patty Murray (D-Wash.), Roy Blunt (R-Mo.), and Heidi Heitkamp (D-N.D.) led the letter, which was signed by Democrats and Republicans from 24 states.
“We want to thank Sens. Grassley, Murray, Blunt and Heitkamp for their leadership on this effort, as well as all of the senators who supported it,” said Anne Steckel, vice president of federal affairs. “It’s not every day that you have Republicans and Democrats from such a diverse group of states uniting around an issue like this. We hope the EPA and the White House will listen and improve this proposal before it is finalized later this year.”
The current RFS proposal calls for a gradual rise in biodiesel volumes by about 100 million gallons per year to a standard of 1.9 billion gallons in 2017. NBB had requested more aggressive growth to a biodiesel standard of 2.7 billion gallons by 2017, along with additional growth in the overall Advanced Biofuel category.
A Senate committee will consider a package of tax credits for wind, biodiesel and cellulosic ethanol. Sen. Chuck Grassley of Iowa included the tax incentives in the bipartisan tax extenders bill the Finance Committee will consider today.
“Certainty and predictability in tax policy are both important for retaining and creating jobs,” Grassley said. “The Finance Committee leaders deserve credit for getting an early start on extending tax provisions. The energy items not only help support jobs. They also support the renewable energy that consumers want for a cleaner environment and energy independence. The higher education deduction helps families and students afford college.”
The inclusion of the wind energy provision comes after Grassley urged the committee chairman to include it, noting it deserves a fair shake compared to many long-standing tax provisions benefiting non-renewable energy sources. Grassley authored and won enactment of the first-ever wind energy production tax credit in 1992. The incentive was designed to give wind energy the ability to compete against coal-fired and nuclear energy and helped to launch the wind energy industry. He has worked to extend the credit ever since.
Renewable production tax credit. Under the provision, taxpayers can claim a 2.3 cent per kilowatt hour tax credit for wind and other renewable electricity produced for a 10-year period from a facility that has commenced construction by the end of 2014 (the production tax credit). They can also elect to take a 30 percent investment tax credit instead of the production tax credit. The bill extends these credits through December 31, 2016.
Cellulosic biofuels producer tax credit. Under the provision, facilities producing cellulosic biofuels can claim a $1.01 per gallon production tax credit on fuel produced before the end of 2014. The bill would extend this production tax credit for two additional years, for cellulosic biofuels produced through 2016.
Incentives for biodiesel and renewable diesel. The bill extends for two years, through 2016, the $1.00 per gallon tax credit for biodiesel, as well as the small agri-biodiesel producer credit of 10 cents per gallon. The bill also extends through 2016 the $1.00 per gallon tax credit for diesel fuel created from biomass.
The Senate Finance Committee is set to vote Tuesday on a two-year extension of tax benefits, including the production tax credit for wind power, and credits for biodiesel and cellulosic biofuels production.
“This markup will give the Committee a timely opportunity to act on extending a number of expired provisions in the tax code that help families, individuals and small businesses,” Hatch said. “This is the first time in 20 years where a new Congress has started with extenders legislation having already expired, and given that these provisions are meant to be incentives, we need to advance a package as soon as possible.”
“The tax code should work for, not against, Americans,” Wyden said. “We need to extend these tax provisions now in order to provide greater certainty and predictability for middle class families and businesses alike. However as we look beyond next week, it’s critical we all recognize and take action to end this stop and go approach to tax policy through extenders.”
A group of biofuel trade organizations have sent a letter to Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) encouraging extension of the critical advanced biofuel tax incentives. The incentives include 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. Groups supporting the extensions are the Advanced Ethanol Council, Advanced Biofuels Association, Algae Biomass Organization, Biotechnology Industry Organization, Growth Energy, National Biodiesel Board, and Renewable Fuels Association.
Speaking to members of the National Corn Growers Association (NCGA) meeting in Washington DC this week, Environmental Protection Agency Administrator Gina McCarthy defended her agency’s proposed volume obligations under the Renewable Fuel Standard (RFS) while at the same time thanking farmers for their strong voice on the issue.
“I know RFS matters deeply to corn growers,” said McCarthy. “You know we held a hearing in Kansas and I know you knew it because you showed up. Last month you were there in force. And I want to thank you for being out there.”
McCarthy told the farmers that “EPA is deeply committed to the RFS” and to the industry. “You might have heard that we are trying to shrink or kill this program, but the truth is we are committed to growing it,” she said. “The volumes we’ve proposed for 2015 and 2016 are designed to bust through any blend wall – even if you don’t believe it exists!”
McCarthy was invited to address the summer Corn Congress session by NCGA President Chip Bowling, a farmer from Newburg, Maryland. “I invited her to Corn Congress because I wanted farmers to hear from her directly,” said Bowling. “To her credit, she had the courage to show up and talk to farmers face to face.”
In her address, McCarthy also talked about the EPA’s Waters of the United States (WOTUS) rule, which is also a major issue of concern for corn farmers. EPA Administrator Gina McCarthy at NCGA Corn Congress
A group representing ethanol and air quality interests says the government’s emissions model regarding ethanol is flawed. The Urban Air Initiative filed documents with the U.S District Court in Washington, D.C., that show the model used by the Environmental Protection Agency (EPA) to measure tailpipe emissions inaccurately blames ethanol for increased air pollution, jeopardizing any hope for ethanol expansion.
The written arguments were filed as part of an ongoing legal challenge by the Urban Air Initiative, Energy Future Coalition, the State of Kansas and the State of Nebraska. These groups are asking that the EPA suspend its use of the Motor Vehicle Emissions Simulator (MOVES) model based on faulty and incomplete data. States are required to use this model to demonstrate compliance with federal air quality standards and would effectively be prohibited from using more ethanol under this model.
The Urban Air Initiative hired a certified fuels modeling consulting firm to run the MOVES model by adding various levels of ethanol to gasoline. But due to faulty fuel blending in the model, ethanol blends are shown to increase most of the pollutants regulated under the Clean Air Act, when in fact the opposite is true when using fuels currently marketed to consumers.
“The consultant confirmed our fears, which was that this model is biased against ethanol and blocks the goal of Urban Air Initiative to reduce toxic emissions and promote a cleaner fuel for today and future generations,” said UAI President Dave VanderGriend. “We have clear data to support that when simply adding ethanol to gasoline, a better fuel is created with fewer toxic emissions. However, the calculations in the MOVES model were primarily directed by oil interests and do not reflect what happens in the real world.”
The new data submitted to the court follows a series of steps the plaintiffs have taken during the past year, including a direct appeal to EPA Administrator Gina McCarthy to suspend the model.
The number of acres corn planted is down this year. But the National Corn Growers Association (NCGA) says there’s plenty of the crop for ethanol and all the other uses from the grain. Citing the U.S. Department of Agriculture’s (USDA) Acreage report, NCGA says total corn planting in the United States totals 88.9 million acres, the lowest planted acreage since 2010 but the sixth-largest U.S. corn acreage planted since 1944.
“Corn farmers produced an abundance in 2014 that resulted in a large carry over into this year,” National Corn Growers Association President Chip Bowling said. “While planted acreage has decreased as farmers in many parts of the country face unrelentingly wet conditions, U.S. farmers have steadily increased our ability to grow more corn on every acre. Americans can rest assured that we will be able to meet all needs, be they for food, fuel or fiber, for years to come.”
USDA projects 13.5 billion acres of corn to be harvested this fall.
Dr. Franklin Orr, Under Secretary for Science and Energy, U.S. Department of Energy, provided the keynote address at the recent BioEnergy 2015 Conference which took place in Washington, D.C. In his role, Dr. Orr is the principal advisor to the Secretary and Deputy Secretary on clean energy technologies and science and energy research initiatives.
“If there is any technology that we are working on that illustrates the facets of innovation that we are trying to foster, it’s bioenergy. It goes from the fundamental science side of the house, to development, to demonstration and deployment. And we have lots of activities going on in all these areas.”
Dr. Orr said he truly believes that biofuels are a very important part of America’s energy and economic future. He added that this is clear when you look at the global context of energy.
He mentioned a few examples which indicate broader global challenges that we are going to face. “Energy security is one of those, creating good paying jobs in the United States is very important for us and of course reducing the emissions that lead to climate change.” Dr. Orr admits these are all big challenges, but stresses that biofuels can help in each of these measures.
Listen to Dr. Franklin Orr’s complete remarks to learn more about the future role of biofuels when it comes to science and energy across the United States: Franklin Orr's Remarks
View the 2015 BioEnergy 2015 photo album.
The governors of Iowa and Missouri both spoke out in bipartisan support of the Renewable Fuel Standard (RFS) during a hearing and rally Thursday in Kansas City.
Iowa Republican Governor Terry Branstad drew applause several times during his testimony at the public hearing on EPA’s proposed volume obligations under the RFS. “We are pleased to be here and get outside the Beltway where Big Oil’s army of well-paid lobbyists seem to have so much undue influence,” said Branstad to applause. While Branstad acknowledged the positive changes EPA made in the proposal for biodiesel, when it comes to ethanol “the agency seems to have bought Big Oil’s faulty arguments hook, line, and sinker.”
“By setting the RFS below the Congressional targets, the EPA caps the amount that will be produced,” said Missouri Democrat Governor Jay Nixon. “It is counter intuitive for the agency charged with enforcing the clean air laws to impose a defacto limit on ethanol, a product which so clearly emits fewer greenhouse gases in the atmosphere.”
“Quite frankly, I’m not seeing how it’s going to hurt our economy to produce cheaper, better, cleaner fuel, and it’s certainly not going to hurt our environment,” said Nixon.
Both governors went from the hearing across the street to a Rally for Rural America to support the RFS and both had their state agriculture directors with them as well. Listen to or download their testimony and rally speeches below.
Iowa and Missouri Governors at EPA Hearing
IA and MO governors and ag directors at RFS rally
EPA RFS Public Hearing photo album
Coverage of EPA RFS Hearing is sponsored by
Minnesota’s governor has signed into law a measure that will help fuel retailers sell the 15 percent blend of ethanol, E15. This news release from the Minnesota Bio-Fuels Association says the new law kicks in on July 1 and will provide funds for the retailers to convert their pumps to handle the higher blend.
The Minnesota Bio-Fuels Association played a key role in getting the E15 Dispenser Bill included in the Agriculture and Environment bill and generated support for it from members of the Minnesota Senate and House of Representatives.
Under the bill, $500,000 in grants will be disbursed over a two-year period to help fuel retailers make simple upgrades to their fuel dispensers so that they can offer E15.
These upgrades include simple calibrations, meters, valve assembles, seals, hanging hardware and in some limited cases, a new dispenser.
The measure is part of a larger piece of legislation that has the state setting a goal to reduce GHG emissions to 30 percent below 2005 levels by 2025. E15 produces fewer GHG emissions and could save the state 358,000 metric tons of carbon dioxide emissions each year, the equivalent of removing 75,368 cars from the road.