Congressional Efforts Needed to Secure Future

Business News/Analysis, Federal Legislation, Opinions, Policy

September 25, 2013

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by Brian Kuehl (Ethanol Producer Magazine) … Two tax provisions are critical to continued development of the U.S. cellulosic industry. First, the tax code currently provides a Second Generation Production Tax Credit that gives ethanol plants a tax credit of $1.01 per gallon of cellulosic ethanol produced. Second, the code provides for an Accelerated Depreciation Allowance for Cellulosic Biomass Properties, which allows producers of cellulosic biofuel to take a 50 percent depreciation in the first year for property used to produce cellulosic ethanol.
Another important provision to the ethanol industry is the Assets for Independence tax credit, which allows a retailer to claim 30 percent of the cost of installing alternative fuel infrastructure (up to $30,000). This program has been useful in encouraging installation of E85 pumps and will be critical in the future as E85 grows in importance as a compliance strategy for the renewable fuel standard.
To meaningfully incentivize market behavior, these provisions cannot be extended on a year-to-year basis. All three provisions are set to expire at the end of 2013. To support continued development of the U.S. ethanol industry, Congress should extend these provisions for at least five years to allow market participants to make sensible financing decisions. READ MORE

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