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Back You are here: Home Politics Funding & Incentives Tax credits extended for U.S. biofuel

Funding & Incentives

Tax credits extended for U.S. biofuel

The wind power is not the only renewable sector that is benefitting from the Obama administration’s passing of an act to avert a coming “fiscal cliff.”

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The American Taxpayer Relief Act of 2012, signed into law last week, included the long-awaited extension of tax credits for wind energy (see related story), as well as the tax credits for biofuels.

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The Act renewed a $1.01 per gallon tax credit for biofuel producers and accelerated depreciation for newly constructed facilities during 2013. It also extended a $1-per-gallon biodiesel tax incentive which had been expired in 2012, allowing it to run through 2013.

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The extensions and modifications made to the Second Generation Biofuel Producer Credit and the Special Allowance for Second Generation Biofuel Plant Property in the act will incentivize investments in both cellulosic and algae biofuel production, according to the Biotechnology Industry Organization.

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“Private investment is critical to ensuring that advanced biofuels reach commercial scale and become cost-competitive,” noted Brent Erickson, executive vice president of BIO’s Industrial and Environmental Section.

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The passage of these legislations is especially welcomed by the algae biofuel sector, as it marks the first time that algae is classified as a qualified feedstock for the $1.01 per gallon tax credit.

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“Achieving tax parity with other biofuels has been a key legislative priority for ABO since our founding in 2008,” said Mary Rosenthal, executive director of the Algae Biomass Organization, the trade association of the U.S. algae industry.

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In a statement, the organization noted that this new classification comes at a critical time for the industry, as several algae fuel companies seek to move toward commercial production. – EcoSeed Staff

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