Ethanol Industry Wants Cellulosic Incentives Continued

Cindy Zimmerman

Advanced biofuel producers are calling on Congress to take action now to ensure that tax incentives for cellulosic ethanol continue past 2012.

RFA AECIn a letter to Congressional leaders, the Advanced Ethanol Council (AEC) asked for a multi-year extension of the Cellulosic Biofuels Producer Tax Credit (PTC) and the Special Depreciation Allowance for Cellulosic Biofuel Plant Property, both of which are set to expire December 31, 2012.

AEC Executive Director Brooke Coleman noted in the letter that the incentives “are vital to the ongoing development of the domestic advanced ethanol industry. To ensure stability in the marketplace, and prevent unnecessary job losses, Congress should provide long‐term extensions of these provisions (5+ years).”

As new ethanol biorefineries are beginning construction, the AEC emphasized the importance of consistent federal policy to this kind of multi-billion dollar investment.

“The advanced and cellulosic biofuels industry is now in the process of building new plants, innovating existing production facilities with emerging technologies, and introducing new product streams that will allow the renewable fuels sector to become more profitable, diversified and efficient,” wrote Coleman. “Several billion dollars have been invested in advanced biofuels development with the expectation that Congress will stay the course with regard to its commitment to the industry. A tax increase on advanced biofuels at this time would curtail investment and undercut an industry just starting to close deals and break ground on first commercial plants.”

The AEC is asking Congress to extend these important tax incentives this year as part of a final tax extenders package as they are set to expire next year. “As Congress considers the extension of a number of tax provisions for the clean energy sector, we would also like to highlight the importance of timing. The mere prospect of the expiration of the PTC and Special Depreciation Allowance for cellulosic biofuels in 2012 will start to affect projects that take 18 months to build, and could drive our industry into a series of ‘fits and starts’ that has dampened investment in other domestic clean energy sectors for decades.”

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