CEOs urge Congress to extend cellulosic tax incentives

Source: Amanda Peterka • Posted: Monday, March 5, 2012

CEOs of advanced biofuels companies asked Congress today to extend two tax incentives due to expire at year’s end.

The cellulosic biofuels tax credit and depreciation allowance for new ethanol plants are “vital” to the development of the still-fledgling advanced biofuels market, the more than 30 executives said in a letter to leaders of the two tax-writing committees, House Ways and Means and Senate Finance.

“It will be much more difficult for our companies to develop projects in the United States if current depreciation allowances expire and taxes on our industry increase in 2013,” says the letter signed by chiefs of Abengoa Bioenergy Corp., Fiberight LLC, Gevo Inc., INEOS Bio, Novozymes North America, Poet LLC and other companies.

Many of the companies are working to develop commercial-scale production of cellulosic ethanol.

The Cellulosic Biofuel Producer Tax Credit provides up to $1.01 per gallon of cellulosic fuel, and the Accelerated Depreciation Allowance for Cellulosic Biofuel Plant Property provides a 50 percent depreciation deduction to cover part of the cost of new cellulosic ethanol plants.

Last year, the ethanol industry did not oppose the ending of a controversial $6-billion-a-year blenders’ tax incentive.

But for the cellulosic industry, even a temporary expiration of the incentives at the end of the year would be devastating, the companies said. Trade groups for the biofuels industry yesterday echoed their concerns.

“Companies that are innovating need stable policy to bring commercial-scale alternatives to the market,” said Jim Greenwood, president and CEO of the Biotechnology Industry Organization.