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Bill extends ethanol’s tax credits

By Staff | Dec 17, 2010

Tom BuisCEO of Growth Energy, a Washington, D.C.-based coalition of ethanol supporters.

Christmas has come early for renewable fuels supporters, since a compromise on expiring Bush-era tax cuts includes an extension of the tax credit for ethanol use.

“Since the Dec. 31 deadline was looming, getting this extension provides the industry with some certainty,” said Tom Buis, CEO of Growth Energy, a Washington, D.C.-based coalition of ethanol supporters committed to growing America’s economy through cleaner, greener energy.

On Dec. 13, the U.S. Senate cleared a critical procedural hurdle, opening the way for a vote before the end of the week to extend all ethanol tax policies for another year, including the Volumetric Ethanol Excise Tax Credit at 45 cents a gallon, the small producer’s tax credit and the alternative fuels mixture tax credit.

“With this vote, the Senate took a critical step toward reducing our dependence on foreign oil,” Buis said. “While we would have preferred a multi-year extension, the one-year extension allows the ethanol industry time to reframe ethanol policy to better address challenges.”

The massive shakeup resulting from the Nov. 2 elections offers new opportunities in 2011 to educate lawmakers about the benefits of ethanol, Buis added.

“The issues that face our industry aren’t partisan – they are geographic. That’s why we’re reaching out to policymakers, especially those from the East and West Coasts, who may not understand the value of ethanol.

“We’ll win with the facts, including ethanol’s ability to create jobs in the U.S., improve our environment and strengthen our national security.”

In response to the Senate invoking cloture on the compromise tax bill and the likelihood of its passage, Renewable Fuels Association President and CEO Bob Dinneen issued the following statement:

“The Senate has taken an important step to keep America on the path toward greater energy self-reliance. We encourage the Senate to move as swiftly as possible to pass this measure. By extending key tax incentives for ethanol production and use, new and existing ethanol technologies can continue to develop and evolve with some confidence.

“This one-year extension will provide the industry and lawmakers breathing room to think through responsible reform of ethanol tax policy and all energy tax policy more specifically.”

Iowa Soybean Association CEO Kirk Leeds said, “This is an important step in what we expect will ultimately be a positive successful passage of the biodiesel tax credit.

“It’s been a long road to this point. It’s unfortunate that a policy that makes economic sense has been caught up in divisive politics in Washington, D.C.

“Successful passage will create more certainty for both biodiesel manufacturers and customers in 2011.”

Fueling Freedom plan

Extending the current ethanol incentives will also open the door to implementing long-term energy solutions like Growth Energy’s Fueling Freedom Plan, Buis said. This plan calls for phasing out current ethanol supports over time by redirecting a portion of those funds to build the infrastructure for the distribution and use of ethanol.

The plan’s primary elements include:

  • Installing more blender pumps. Funds currently going to the oil industry as an incentive for blending ethanol into gasoline (the VEETC) would be redirected to provide backing for the build-out of distribution infrastructure for ethanol.

This would include tax credits for retailers to install 200,000 blender pumps and federal backing of ethanol pipelines. This will provide Americans the access to choose ethanol in an open and free market and would allow for the elimination of the tax supports over time in exchange for that level playing field, Buis said.

  • Requiring that all automobiles sold in the U.S. to be flex-fuel vehicles. This provision could include as many as 120 million vehicles, according to Growth Energy, which notes that this requires no additional cost to taxpayers and a minimal cost (about $120 per vehicle) to vehicle manufacturers.

Growth Energy’s Fueling Freedom plan, once implemented, would build out the U.S.’ infrastructure to create a path that leads to an open market that is free of government supports, Buis said. Redirecting funds currently paid to oil companies to blend ethanol into gasoline toward infrastructure improvements would enable consumers to choose between gasoline and ethanol.

“All this gives the power to the consumer, who can select fuel based on price and performance,” Buis said. “Going forward, our industry will continue to work together to reform energy tax policies while supporting our domestic ethanol industry.”

You can contact Darcy Dougherty Maulsby by e-mail at yettergirl@yahoo.com.

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