Biofuels backers probably have a little spring in their step today as provisions have now been tucked into the tax package worked out between President Obama and Republican congressional leaders which would extend ethanol and biodiesel incentives.
Here's where things stand as the Senate launches into consideration of the package:
Ethanol: The volumetric ethanol excise tax credit (VEETC) or blenders' credit, would also known as the blenders’ credit – will continue at its current level of 45 cents through Dec. 31, 2011. The tariff on imported ethanol will continue at its current level of 54 cents. The "Section 1603" grant program, a program from the 2009 economic stimulus law which allows companies to claim a grant instead of an existing investment tax credit, would be extended for a year.
The VEETC and the import duty had been scheduled expire at the end of 2010.
Biodiesel: The $1 per gallon biodiesel tax credit would be made retroactive to Jan. 1, 2010, and would continue through 2011. The plan would also continue the small agri-biodiesel producer credit of 10 cents per gallon. The bill also extends through 2011 the $1.00 per gallon production tax credit for diesel fuel created from biomass.
The biodiesel tax credit lapsed at the end of 2009 and lawmakers could not agree on a plan during 2010 to revive it.
Alternative fuels credit. The bill would extend the $0.50 per gallon alternative fuel tax credit through 2011. The bill does not extend this credit any liquid fuel derived from a pulp or paper manufacturing process (i.e., black liquor).