Loss of Federal Incentives Could Hurt Cellulosic Ethanol Development

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December 14, 2011

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by Robert Pore (The Independent) …Nebraska’s ethanol industry could be adversely impacted if Congress doesn’t extend key tax incentives, especially those for cellulosic ethanol, a Nebraska Ethanol Board official said.

The incentives that the Advanced Ethanol Council (AEC) and other groups are seeking to extend are designed to help the cellulosic ethanol industry, especially the Cellulosic Biofuels Producer Tax Credit and the Special Depreciation Allowance for Cellulosic Biofuel Plant Property. They are set to expire on Dec. 31.

Steve Sorum, ethanol project manager for the Nebraska Ethanol Board, said if the tax incentive for cellulosic ethanol expires at the end of the month, “it has the potential to stop alternative ethanol production in its tracks.”

He said cellulosic ethanol hasn’t developed at a rate that will allow it to be competitive at this point.

“While people still talk confidently about it, it is a ways off, and without some sort of buffer to help them get past the price situation, it will be impossible to get money to build the facilities,” Sorum said.

…”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,”(Advanced Ethanol Council Executive Director Brooke) Coleman said.

He said 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,” he said. READ MORE and MORE (DomesticFuel.com) and MORE (Advanced Ethanol Council)

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