Advanced BioFuels USA

by Jim Lane (Biofuels Digest)  The $1.4 trillion spending package includes appropriation for Fiscal Year 2021, the COVID stimulus package, extensions of popular tax credits that otherwise expired on December 31st, and the Energy Act of 2020, a $35B version of a larger energy bill that has been drifting around in Congress since 2016.

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As Fuels America noted, “the new omnibus appropriations and COVID-19 relief package extends key tax provisions for low-carbon biofuels and explicitly authorizes the USDA to deliver on long-awaited aid for biofuel producers.” One Hill observer added, “The bill is a classic end-of-year compromise: everybody got something, and nobody got everything.”

Key Tax provisions

The Renewable Fuels Association noted that the bill “extends key tax provisions that support innovation and expansion in the renewable fuels industry, including the Second Generation Biofuel Producer Tax Credit, Alternative Fuel Refueling Property Credit, and the Section 45Q tax credit for carbon sequestration, allowing the 45Q credit to be claimed by facilities that begin construction by the end of 2025.

The bill extended the $1.01 per gallon nonrefundable income tax credit for second-generation biofuel sales through 2021, and the tax credit for the installation of alternative fuel vehicle refueling property, including property that dispenses ethanol, biodiesel, natural gas, hydrogen, and electricity, capped at $30,000 per location.

And the legislation appropriates $13B to address COVID-related impacts on agriculture, $13 billion to support nutrition programs and $7 billion for broadband funding. The $13B in agricultural funding can  be used for “payments to producers of advanced biofuel, biomass-based diesel, cellulosic biofuel, conventional biofuel, or renewable fuel…produced in the United States, for unexpected market losses as a result of COVID–19.”

COVID Relief

Makes biofuel producers eligible for direct payments from USDA to recoup losses due to COVID; top-line funding for the direct aid account is $11.1875 billion. There is no specific spend required for biofuel producers, USDA has wide discretion on how to use these funds.

EPA actions

• Directs EPA to finalize a rule permitting the production, transfer, and use of biointermediates within 90 days. EPA is also required to brief Congress on its plans for action within 60 days.
• Directs EPA to report to Congress within 180 days on agency and stakeholder engagement to create markets for low-grade and low-value wood (i.e. slash and precommercial thinnings) as a feedstock for alternative fuels.
• Directs EPA to process applications for eRINs within 90 days. Notes the backlog of pathway applications at EPA.
• Reminds EPA that it is able to grant additional SRE relief regardless of the recommendations from the Department of Energy (holdover language from last year championed by Senate EPW Chairman Barrasso)

US Department of Energy actions

• Overall, flat funding for the Bioenergy Technologies Office; there are specific carveouts for feedstock technologies, algal systems, and RNG. The DOE Bioenergy Technologies Office was reauthorized through 2023
• Encourages DOE to focus on sustainable aviation fuel cost reduction, considering relevant global supply chains and coordinating with Federal agencies, national labs, universities, and the aviation industry.
• Directs DOE to conduct a study evaluating pathways to reducing emissions from home heating using advanced biofuels and biofuel blends within 1 year.
• Provides $5 million for research on direct injection, engine technology, and the use of dimethyl etheras a fuel. Encourages R&D in advanced combustion and vehicle engine technology efficiency in propane engines for light and medium-duty applications.
• Reforms the DOE’s Loan Program Office.

US Department of Transportation Actions

• Supports sustainable aviation fuels through $31 million for the NextGen Environmental Research Aircraft Technologies and Fuels program, of which $3 million is designated for the CLEEN program and $15 million is for the center of excellence.
• Directs FAA to certify fuels for safe use in commercial aviation and for inclusion under CORSIA, encourages utilization of the aviation sustainability center (ASCENT) researchers to address the entire sustainable aviation fuels supply chain to identify and enable industry to overcome key barriers to entry such as fuel costs. READ MORE

Covid Aid Bill Provides Ag Funding for Sectors Left Out of CFAP (AgWeb)

Ethanol Blog: Congress Authorizes USDA to Provide Relief to Biofuels Producers (DTN Progresssive Farmer)

AG GROUPS PRAISE $33B IN FARM-RELATED PANDEMIC RELIEF AID (Successful Farming/Iowa Capital Dispatch)

COVID Relief Bill Passes with Aid for Biofuels Producers (Energy.AgWired.com)

ACE CEO SAYS USDA HAS REFERENCE POINTS WHEN DETERMINING COVID RELIEF FOR BIOFUELS (Brownfield Ag News)

Sen. Thune on Aid for Agriculture and Biofuels in COVID Relief Bill (Ag NewsWire; includes AUDIO)

GROWTH ENERGY AMONG BIOFUELS GROUPS WELCOMING RELIEF IN COVID AID PACKAGE (Brownfield Ag News)

RENEWABLE FUELS ASSOCIATION WELCOMES TAX EXTENDERS IN OMNIBUS COVID PACKAGE (Brownfield Ag News; includes AUDIO)

Congress Extends Tax Credits for Biofuels, Fuel Cells and Alternative Fuels (NGT News)

LONG JOURNEY TO GET AID TO STRUGGLING BIOFUEL PRODUCERS (Brownfield Ag News)

Trump signs stimulus and government spending bill into law, averting shutdown (Washington Post)

What Renewable Energy and Energy Storage Did, and Didn’t, Get from Congress This Week –Yes on tax incentives, R&D funds and opening public lands. No on storage ITC, direct pay and a clean energy standard. (GreenTechMedia)

Congress Extends Tax Credits for Alternative Fuels (NGT News)

Trump signs COVID-19 relief, tax extenders package (Ethanol Producer Magazine)

LONG JOURNEY TO GET AID TO STRUGGLING BIOFUEL PRODUCERS (Brownfield Ag News)

Biofuel groups urge USDA to provide COVID direct payments (Agri-Pulse)

Excerpt from Brownfield Ag News: “In the March bill there was roughly $24 billion, and (Ag Secretary Perdue) kept telling us he didn’t have the authority to do it, and we said yes you do. But he didn’t agree. So this (bill) makes very clear he has the authority to do it.”

He says thanks to the latest coronavirus relief package, Ag Secretary Perdue now has the discretion to use some of the $13 billion in ag assistance to provide aid to ethanol plants.

“Does it guarantee that there will be any help? Maybe not under a Perdue, but I’ll bet there will be under a Vilsack.”

Grassley (Senator Chuck Grassley (R-IA) says he and Senator (Joni) Ernst have been arguing with Secretary Perdue for the past six months about whether USDA had the authority to assist the biofuels industry.  READ MORE