Ag Policy Blog

No Tax Extenders Will Affect Biofuels and Wind Production

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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If "tax extender" business isn't dealt with in the lame-duck session of Congress, several major biofuel and renewable energy incentives will sunset and have to wait for a tax-reform bill to see if they will be renewed. (DTN photo by Elaine Shein)

With a strong belief among GOP lawmakers that 2017 will mark the year of major tax reform, Republican leaders have indicated that some key business "tax extenders" won't get consideration in the lame-duck session of Congress.

This means several major biofuel and renewable energy incentives will sunset and have to wait for a tax-reform bill to see if they will be renewed.

House Majority Leader Kevin McCarthy, R-Calif., said Tuesday he did not see a pathway for a tax-extender package, according to Informa Economics. Politico reported a similar comment from Senate Majority Whip John Cornyn, R-Texas.

The push for reform comes with President-elect Donald Trump's tax plan from his election campaign, which was crafted, in part, by Wall Street financier Steven Mnuchin, who was named Wednesday as Trump's nominee for Treasury Secretary.

Given the push in the incoming Trump administration for expanded fossil-fuel production, biofuel and wind tax credits will take some significant support to keep advancing those energy options.

Among the expiring biodiesel, cellulosic and wind tax credits are:

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The Biodiesel Blender Credit: $1.00 per gallon for biodiesel mixed with diesel fuel.

The Small Agri-Biodiesel Producer Credit: 10 cents per gallon for up to 15 million gallons when agro-biodiesel production capacity does not exceed 60 million gallons per year.

The Biodiesel Excise Tax Credit that can be taken against the taxpayer’s fuel tax liability. The credit is $1.00 per gallon through 2016.

Second Generation Biofuel Producer Tax Credit: $1.01 per gallon for cellulosic biomass from agricultural residue, wood or waste.

Alternative Fuel Vehicle Property: A 30% credit for up to $30,000 for installing blender pumps that would sell fuels up to E85 and 20% biodiesel.

Wind Production Tax Credit: 2.3 cents per kilowatt-hour credit for electricity produced from close-loop biomass. The credit for open-loop biomass is 1.2 cent per kilowatt-hour. The credit is generally available for 10 years after a facility begins production.

Distributed Wind Investment Tax Credit: Provides a 30% investment tax credit for installing electrical power generation. This includes distributed wind projects as well as some wind farms are community-owned incorporating local financial participation and control.

Small Wind Investment Tax Credit: provides an investment tax credit worth 30% of the installed cost of the system for small generators to produce power for individual homes, farms and small businesses.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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