Budget bill retroactively extends biofuel tax credits for 2017

By Erin Voegele | February 09, 2018

On Feb. 9, President Donald Trump signed the Bipartisan Budget Act of 2018 into law. The two-year funding bill ends a brief government shutdown and includes retroactive tax extenders for several biofuel-related tax incentives.

The bill, H.R. 1892, retroactively extends the second-generation biofuel producer credit, the blenders tax credit for biodiesel and renewable diesel, the tax credit for alternative fuel vehicle refueling property and the special allowance for second generation biofuel plant property through the end of 2017. The credits were not extended through 2018.

The American Coalition for Ethanol expressed gratitude for the extension but stressed the Congress needs to take action to renew the credits before they expire. “We are grateful that the budget deal includes retroactive extensions of key tax credits which will benefit renewable fuel producers and retailers offering higher ethanol blends to consumers,” said Brian Jennings, CEO of ACE. “Nevertheless, Congress clearly needs to prioritize extending these important renewable fuel tax credits before they expire.  It’s patently unfair when renewable fuel tax credits are allowed to expire but the oil industry enjoys a host of permanent tax subsidies.”

Growth Energy also expressed disappointment that the credits were not extended through the current year. We’re happy that the second generation producer and biodiesel tax credits were extended for 2017, but we would have liked an extension for this year as well,” said Chris Hogan, vice president of communications and public affairs at Growth Energy. “This inconsistent tax policy makes investment decision tough for biofuels producers.”

The Iowa Renewable Fuels Association called the one-year extension of the biodiesel credit good, but not good enough. “While we are pleased the credit was restored for 2017, in 25-plus years of monitoring federal legislation, this is the most ridiculous outcome I’ve ever seen,” said Monte Shaw, executive director of the IRFA. “We will continue to work for a quick extension for 2018 and ultimately a common-sense long-term extension. When you consider that petroleum is in its 105th consecutive year of federal tax preferences, it is ridiculous that U.S. House members objected to the two-year extension. Today, just as yesterday, the industry has to produce and market biodiesel with no certainty over what the final financial situation will be. That is not any way to run a business.”

A full copy of the bill can be downloaded from the Congress.gov website