In Santa’s Stocking: 3 big wins for renewable fuels, feedstocks

$1 biodiesel tax credit extended through 2016, and much more.

In Washington, lawmakers in the U.S. House and Senate passed legislation for retroactive reinstatement of the $1 per gallon biodiesel mixture excise tax credit from January 1, 2015 through December 31, 2016. Despite efforts of the US biodiesel industry to reform it to more directly benefit the American economy, the incentive will stay in its current form.

The legislation now goes to the White House, where President Obama is expected to sign it into law in the coming days.

REG CEO Dan Oh issued the following statement after U.S. House and Senate passage of tax extenders legislation which contained

“We are pleased and thankful that Congress has approved a retroactive reinstatement and extension of the biodiesel tax credit. With the President’s signature, this worthwhile incentive, combined with higher RFS2 biomass-based diesel volumes, will reinforce our company’s continuing growth by encouraging higher blends and usage of advanced biofuels throughout North America. It provides multiple benefits through enhancing our environment, energy and food security and local economies.”

Grant Kimberley, executive director of the Iowa Biodiesel Board, said: “We’re grateful that the bill reinstates the biodiesel tax credit, and extends it into the next 12 months for the first time in many years. Our state’s biodiesel producers will have some degree of business clarity in the 2016 landscape, rather than gambling on whether it will be reinstated retroactively. That’s a major step forward in creating stability for this truly American energy industry. We’re glad Congress recognized its importance.

Permanent Section 179 Tax Break 

Congress also approved tax legislation extending the $500,000 Section 179 capital assets depreciation limit and enhanced bonus depreciation. This legislation allows farmers and small businesses to immediately write off the full price of up to $500,000 in capital assets purchases (including farm and construction equipment) instead of depreciating it over time.

The Section 179 tax deduction is good on new and used equipment and is combined with bonus depreciation for even bigger tax savings on new equipment.To take advantage of this tax break in the 2015 tax year, equipment must be purchased, financed, or leased and put in service by midnight on December 31, 2015.

$90 million for algae

The appropriations bill also includes several components that will accelerate the development of advanced algae technologies that can help address some of the nation’s most pressing challenges. The bill includes a provision for $30 million for algae research and development at the Department of Energy’s Bioenergy Technologies Office and $10 million for carbon use and reuse at the Department’s Office of Fossil Energy. This support increases the potential funds available for algae research and commercialization by 50 percent over 2015 levels. The legislaton also makes up to $45 million available to the Department of Defense for the construction of biorefineries for the production of advanced drop-in biofuels from algae and other sources.

“Programs at the Departments of Energy and Defense are making vital investments in an algae technology platform that offers an economically sustainable solution to carbon emissions, provides Americans with a new source of domestically produced fuels, and opens the door for an industry that can provide jobs across the nation.” said Matt Carr, executive director of the Algae Biomass Organization. “Extending the production tax credit for second generation biofuels through 2016 also sends a vital signal to investors that algae-based and other advanced biofuels have the full support of Congress. We thank members of the House and Senate for their leadership and vision.”