U.S. Senate Finance Committee Addresses Energy Tax Credits; Biodiesel Tax Credit Bill is Introduced
The U.S. Senate Finance Committee last week advanced a $260 billion package reforming and consolidating energy tax credits. The Clean Energy for America Act, which advanced on a party-line vote, would consolidate a variety of federal incentives into technology-neutral investment or production tax credits.
The bill also increases benefits for EVs, adding a separate $2,500 credit on top of the existing $7,500 credit if the vehicle was manufactured at a union or domestic facility.
In addition, the bill creates a ten percent bonus above the production / investment tax credit for technologies with less than three percent market penetration, which would include sustainable aviation fuel and clean hydrogen. Read more here.
Committee Republicans criticized the bill for removing deductions for oil and gas investments, though Committee Chairman Ron Wyden (D-OR) countered that “drillers and individuals could still claim deductions over a longer period of time.”
Senators Chuck Grassley (R-IA) and Maria Cantwell (D-WA) introduced legislation this week to extend the current federal biodiesel tax credit program through 2025.
“The biodiesel tax credit has proven to work by reducing our dependence on foreign oil and lowering greenhouse gas emissions,” Grassley said in a statement. Reps. Cindy Axne (D-IA) and Mike Kelly (R-PA) also introduced companion legislation to extend the $1.00 per gallon biodiesel blenders’ tax credit for 3 years.