The Path Forward for Federal Biofuel Incentives
(25 x’25) The belief that the ethanol industry is entering a new era is nearly universal. As Renewable Fuels Association (RFA) President Bob Dinneen put it this week, “new challenges to ethanol policies will be mounted from within the new 112th Congress,” including those who would seek “a return to the status quo before ethanol.” Though most agree that the current tax benefits currently utilized by the ethanol industry will undergo change, there is optimism that the incentives can be restructured in a way that maintains the industry’s viability while allowing it to make even greater contributions to the nation’s economy, environment and energy security.
Ethanol is critical to the nation’s energy strategy and continues to provide the bridge to sustainable, next-generation biofuels.
one idea being advanced by the Union of Concerned Scientists is the creation of a new biofuels performance tax credit that would reward biofuel producers for emissions performance over what is already required by the federal Renewable Fuels Standard. The greater the emission performance of the biofuel, the greater the incentive payment biofuel producers would quality to receive. The credit would also encourage advanced and cellulosic ethanol producers to design their facilities with the cleanest technology from the start.
Another proposal worth considering is the creation of a revenue safety net for biofuel producers in a market that fluctuates with the price of oil. READ MORE