Triple Win for Biofuels on Capitol Hill; $$$ for Military Biofuels; Tax Extenders Package; Algae wins tax credit parity
Advanced biofuels make a stunning comeback in Washington with three quick committee-level touchdowns on military biofuels, tax credits and algae parity; full Senate vote, conference with House by September?
In Washington, the US Senate Committee on Appropriations and the Senate Finance Committee handed the advanced biofuels industry three of its most significant wins on Capitol Hill this year.
The Senate Appropriations Committee, in approving the 2013 Defense budget, appropriated $70M for the Navy biofuels program, and added $100 million to the Defense Production Act “to build production capacity for critical defense-related initiatives,” which reflects potential funding for the Navy’s proposed military biofuels program.
The House bill did not fund the $70 million requested by the Administration for the Navy biofuels project, but did add an appropriation $50M in general funds for defense-related initiatives. The differences between the House and Senate versions will be worked out in conference.
In Washington, the Senate Committee on Appropriations today approved the fiscal year 2013 Defense bill by a vote of 30-0; and the Legislative Branch bill by a vote of 22-8. Both measures will now be reported to the full Senate for its consideration. The defense measures had been supported by a coalition of stakeholder organizations including Airlines for America, the American Farm Bureau Federation, the Advanced Biofuels Association, Biotechnology Industry Organization, National Farmers Union and Operation Free.
Meanwhile, the Senate Finance Committee marked up the Family and Business Tax Cut Certainty Act of 2012, which included key energy efficiency and biofuels tax credit provisions. Included in the bill: the Cellulosic Biofuels Producer Tax Credit (PTC), the Accelerated Depreciation Allowance for Cellulosic Biofuel Plant Property, clean fuel vehicle refueling property credits, a two-year extension of the R&D tax credit, and an extension of the $1 per gallon biodiesel blender’s credit. The committee also added parity for algal biofuels in the tax extenders package.
Both the Appropriations and Finance Committee measures now move to the full Senate for consideration, and to conference with the House of Representatives to reconcile differences between Senate and House Appropriations. Votes are expected on the appropriations bills in September.
Mike McAdams, President, Advanced Biofuels Association
“The domestic advanced biofuel industry can play a huge part in promoting energy security, which is critical for military readiness and national security. Ensuring the reliability and affordability of fuel supplies through diversification to advanced drop-in alternative fuels is essential to sustain the U.S. military’s readiness, since oil price volatility has already negatively impacted military readiness.
“Private companies have made substantial investments and rapid progress in researching and developing advanced biofuels. Building new advanced biofuel biorefineries requires large capital investments at a time when capital formation has been hampered by the recent economic downturn. The military’s ability to use its Defense Production Act authority can help attract private investment to construct biorefineries and meet the military’s need for energy security.”
“The Senate Finance Committee’s work is a strong show of continued bipartisan support for our industry. Today’s vote is a signal to the marketplace that the federal government is commited to tax support for this industry. Our members believe that extending these tax credits are a good value for every taxpayer and energy customer in the United States.”
BIO President and CEO Jim Greenwood
“Tax policy should be focused on driving innovation to reduce our dependence on foreign oil, lower gas prices, and create high quality U.S. based career opportunities. Perhaps more than any other investment, biorefineries can help achieve these objectives by leveraging U.S. biotech innovation and agricultural productivity to revitalize domestic manufacturing.
“Advanced biofuel and renewable chemicals tax credits drive innovation while leveling the playing field for U.S. companies and ensuring these American-born technology innovations are deployed here at home.
“U.S. tax policy should support the full range of biorefinery opportunities – biofuels, biobased products, and renewable chemicals – and extending the tax credits helps to do just that. Producing affordable domestic alternatives to all products that come from foreign oil is vital to renewed economic growth and energy security. These tax credits give companies that are innovating a stable policy to bring commercial-scale alternatives to the market.
“By extending the cellulosic biofuels producer tax credit and accelerated depreciation allowance for cellulosic biofuel plant property, and by adding algae-based biofuels to these two sections of the code, this proposal sends an important signal to investors that Congress continues to support the key role these technologies must play in securing our energy future.
Brooke Coleman, Executive Director, Advanced Ethanol Council
“The advanced biofuels industry commends the Senate Finance Committee for recognizing the need to provide continuity in the advanced biofuels marketplace while Congress tackles the bigger issue of comprehensive tax reform.”
“Congress is right to take a hard look at all tax incentives for all energy industries, including fossil fuels. And we look forward to the day when we can restore parity to the tax code when it comes to energy development. But until that day comes, it is critical to maintain stability in the marketplace for emerging industries. This strong, bipartisan vote sends a strong signal to the marketplace that Congress understands the urgent need to address these expiring credits, and we look forward to getting these incentives extended as soon as possible.”
John Plaza, CEO of Imperium Renewables
We are very pleased that the Senate Finance Committee has approved the bipartisan tax extenders package that includes the $1 per gallon biodiesel blender’s credit. We want to recognize the efforts of Committee leaders, Chairman MaxBaucus (D-MT) and Ranking Member Orrin Hatch, (R-UT), and especially Senator Maria Cantwell (D-WA) for supporting this credit which is critical to our industry.
With the passage of the Tax Extenders Package out of the Senate Finance Committee, a strong message of bi-partisan support from the Senate leaders highlights the importance of a healthy, domestic biodiesel industry for the nation, and hopefully sets the tone for quick and successful passage in the Senate and the House.
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