ACE asks conference committee to extend biofuel tax credits

By Erin Voegele | December 19, 2017

Brian Jennings, CEO of the American Coalition for Ethanol, recently sent a letter to Rep. Kevin Bradey, R-Texas, and Sen. Orrin Hatch, R-Utah, asking the conference committee negotiating changes to House and Senate tax bills to extend the cellulosic biofuel tax credit and biodiesel tax credit as part of the Tax Cuts and Jobs Act. Brady serves as chairman of the House Committee on Ways and Means, while Hatch serves as chairman of the Senate Committee on Finance.

“Extension of these provisions is critically important and consistent with the stated purposes of the tax bill of ‘growing our economy, bringing jobs back to our local communities, increasing paychecks for our workers, and making sure Americans are able to keep more of the money they earn,’” Jennings wrote.

In the letter, Jennings notes that the U.S. biofuel sector generates $184.5 billion in annual output and supports 852,000 jobs. The industry also pays $49 billion in wages, remits $14.5 billion in taxes and saves taxpayers approximately $10 million per year by reducing the need for farm program payments. “Thanks to the Renewable Fuel Standard (RFS), thousands of high-skill, high-wage jobs have been created across rural America and farmers have a vital market for their crops,” Jennings continued.

According to Jennings, growth in cellulosic and advanced biofuels will be constrained under the 2018 RFS blending volumes. He also said tax treatment between biofuel and fossil fuel incentives is heavily skewed toward oil, further hindering the production and use of cellulosic and advanced biofuels. “Oil companies continue to benefit from taxpayer subsidies that often exceed $4 billion per year, with certain oil tax benefits perpetually set in the tax code since 1913,” Jennings wrote. “In comparison, incentives for renewable fuels have been left to expire time and again. The on-again, off-again nature of renewable fuel tax incentives has not only needlessly slowed the expansion of biofuel production, it impedes growth, job creation, and economic prosperity in rural communities.”