Bill aims for long-term extension of renewable energy tax credits

By Erin Voegele | January 06, 2016

In mid-December, Sen. Bernie Sanders, I-Vt., who is seeking the democratic presidential nomination, introduced legislation that aims to enact long-term extensions of several clean energy tax credits that benefit the bioenergy and biofuel sectors.

The bill, titled the “American Clean Energy Investment Act of 2015,” or S. 2391, would permanently extend the production tax credit for renewable electricity generated from certain sources, including wind, open- and closed-loop biomass, geothermal, solar and marine and hydrokinetic energy. For onshore wind facilities, starting in 2022, the credit would be gradually reduced to a rate of 1.1 cents per kWHr for facilities that commence construction starting in 2025.

The bill would also extend the $1.01-per-gallon second generation biofuel producer credit for advanced biofuels derived from cellulosic or algae-based feedstocks through the end of 2022. Similarly, the $1-per-gallon tax credit for biodiesel and renewable diesel would be converted from a blenders credit to a producer credit and extended through the end of 2022. The special allowance for second generation biofuel plant property that enables a tax payer to deduct 50 percent of the cost of plant property associated with the production of second-generation biofuels derived from cellulosic or algae-based feedstocks in the year that property is placed into service would also be extended through 2022. In addition, the alternative fuel vehicle refueling property credit, which allows a tax credit of up to 30 percent for the installation cost of certain alternative fuel infrastructure, up to $100,000, would be extended through 2022 and expanded to include ethanol blender pumps capable of delivering ethanol blends of E50 or higher. Biodiesel blenders pumps capable of delivering B50 blends or higher would also be eligible, along with Type II and Type III electric charging stations for electric vehicles.

The bill was introduced by Sanders on Dec. 10 and referred to the Senate Committee on Finance. To date, Sens. Edward Markey, D-Mass., and Jeff Merkley, D-Ore., have signed on to sponsor the measure.

On Dec. 18, President Obama signed a bill into law that included short-term extensions of many of the same biofuel and bioenergy tax credits targeted by Sanders’ bill. Those extensions generally extend through the end of this year.

Additional information on S. 2391 can be downloaded on Sanders’ website.