US Senators Chuck Grassley (R-Iowa) and Kent Conrad (D-North Dakota) introduced a bill—the Domestic Energy Promotion Act of 2011— that would extend, through 2016, at descending levels, the volumetric ethanol excise tax credit, or VEETC, which is also known as the blenders’ credit. It also would extend, through 2016, the alternative fuel refueling property credit; the cellulosic producers’ tax credit; and the special depreciation allowance for cellulosic biofuel plant property.
The bill also has the original co-sponsorship of Senators Mike Johanns of Nebraska, Amy Klobuchar of Minnesota, Al Franken of Minnesota, Tom Harkin of Iowa, Tim Johnson of South Dakota, and Ben Nelson of Nebraska.
Ethanol already represents nearly 10% of the US fuel supply. The Senators said they introduced their legislation because it would provide the certainty that’s necessary for the additional private investment and job creation that will help further develop ethanol.
The Biotechnology Industry Organization (BIO) applauded the bill for its extension of the availability of the cellulosic biofuel tax credit.
We commend Senator Grassley for recognizing the need for long-term, stable tax policies in helping to attract investment the construction of new advanced biofuel biorefineries and for his efforts to extend the current cellulosic biofuel production tax credit. Few advanced biofuel companies have been able to make use of this credit to date. A more comprehensive federal policy that mitigates the risks of investment in new, innovative technologies could help achieve the national goals of reducing reliance on foreign oil, increasing energy security, creating domestic jobs, and improving the environment. Such a policy would provide flexibility for next generation biorefineries through a choice of investment or production tax credits and increase eligibility for emerging, cutting-edge technologies such as algae, renewable chemicals and biobased products. Tax incentives would then help to build a robust, sustainable renewable industry.—Brent Erickson, executive vice president of BIO’s Industrial and Environmental Section