Legislation introduced in the House by California Representative Scott Peters addresses one of the tax incentives the Renewable Fuels Association calls extremely important to the growth and development of the U.S. biofuel industry. RFA President Bob Dinneen wrote the leaders of the Senate Finance and House Ways and Means Committees to urge the extension of the Second Generation Biofuel Producer Tax Credit, the Second Generation Biofuel Plant Depreciation Allowance and the Alternative Fuel Vehicle Refueling Property Credit. According to Dinneen – the U.S. advanced biofuel and cellulosic ethanol industry is at a critical stage. After years of struggle to attract financing – he says the industry is operating commercial-scale second generation plants in several states across the country and has dozens of projects at the final stages of development. Dinneen says many of the facilities coming on line were financed with the expectation the Producer Tax Credit would be available. Losing that credit now – he says – would be a devastating blow.
Dinneen says the accelerated depreciation allowance will also cause significant damage and delay to efforts to use new inputs such as agricultural waste and other advanced feedstocks in producing ethanol. He notes just as facilities are beginning to produce their first gallons of second generation biofuel or are on the cusp of production – the incentives designed to help them will expire without prompt Congressional action.
An extension of the Alternative Fuel Vehicle Refueling Property Credit is also important – Dineen says – because it provides fuel retailers with a tax credit for investments made to upgrade their fuel delivery systems to allow for the sale of alternative fuels. He calls the credit’s extension essential to the successful commercialization of new technologies. He says it would help retailers make the necessary investments in their infrastructure to provide consumers with more fuel choices at the pump and allow the goals of the Renewable Fuel Standard to be met.