January 2, 2013, Houston, TX — U.S. lawmakers temporarily extended tax credits for cellulosic biofuels and biodiesel yesterday as part of a legislative package negotiated with the White House to avoid the so-called fiscal cliff.
January 2, 2013 By Argus Media
The American Taxpayer Relief Act of 2012 extends a series of tax breaks for wind power, energy efficiency programs, coal production on Indian lands and alternative fuel infrastructure that the Congressional Budget Office (CBO) estimates will cost federal coffers $4.7bn this year and $18.1bn over 10 years.
The bill, which President Barack Obama is poised to sign, extends until the end of this year a $1.01/USG cellulosic biofuel producer tax credit. And the bill broadens the credit to include fuel that uses cultivated algae.
The bill also resurrects – and extends until 31 December – a tax credit for service station operators that install equipment to dispense alternative fuels. That tax credit had expired a year ago. The legislation reinstates the tax credit retroactively. Renewable Fuels Association president Bob Dinneen said the extension of the credit will help accelerate use of gasoline made with up to 15pc ethanol (E15) in the market.
The legislation also renews the $1/USG tax credits for biodiesel and renewable diesel. Anne Steckel, the National Biodiesel Board's vice-president of public affairs, pointed to a recent study which suggested the industry would have produced an additional 300mn USG of biodiesel last year if the tax incentive had been in place for all of 2012. “It has been a long year with a lot of missed opportunity and lost jobs in the biodiesel industry,” Steckel said.
Biodiesel is an advanced biofuel made from recycled cooking oil, soybean oil and animal fats.
In response to this change in biodiesel production profitability, Argus altered its formula for the heating oil/soybean oil spread to include the $1/USG credit. The spread will now be assessed as: (Concurrent month Nymex Heating Oil in USD/USG +$1/USG) – (Concurrent month CME Soybean Oil in USD/lb * 7.50).
The bill also includes a one-year extension of the production tax credit for wind and investment tax credit for offshore wind.
Please visit ArgusMedia.com or more information.
Copyright © 2012 Argus Media Ltd. All rights reserved. By reading this article, you agree that you will not copy or reproduce any part of its contents (including, but not limited to single prices or any other individual items of data) in any form or for any purpose whatsoever without prior consent of the publisher.
Print this page