Federal tax package includes key biofuels provisions

The omnibus tax legislation, H.R. 4853 (Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010) approved by both the U.S. House and U.S. Senate and signed by President Obama last week, contained a number of critical provisions related to the biofuels industry. Two of the most noteworthy provisions include:

  • an extension of the Volumetric Ethanol Excise Tax Credit through 2011 at the current rate of $0.45 per gallon; and
  • the retroactive reinstatement of the $1.01 biodiesel tax incentive through 2011 (the tax incentive had lapsed on 31 December 2009).

Also last week, an omnibus appropriations bill was introduced in the Senate that would have made significant funding cuts to U.S. Department of Agriculture energy programs, including the Biomass Crop Assistance Program (BCAP) and the Biorefinery Assistance Program. However, Senate leadership announced that the omnibus appropriations bill will not come up for a vote in its current form and that major spending decisions have been postponed until the new Congress is seated in 2011.