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President Obama signs tax law, extends biofuels incentives for another year

The tax policy package signed by President Barack Obama today extends ethanol and biodiesel tax incentives for at least another year. Biofuels supporters welcome the news while others call the ethanol tax incentive an unnecessary subsidy.

 

The tax policy package signed by President Barack Obama today extends ethanol and biodiesel tax incentives for at least another year.

This news was welcomed by organizations such as the Renewable Fuels Association and the National Biodiesel Board. But, it was scorned by a coalition of several other organizations, including the American Meat Institute, the Grocery Manufacturers Association, and the Milk Producers Council.

“The taxpayers will spend billions of dollars on a totally unnecessary subsidy to a mature industry,” BusinessWire.com reported the coalition as stating. For a list of organizations in the coalition, visit www.businesswire.com.

Bob Dinneen, president and CEO, Renewable Fuels Association, said that an extension of the tax incentives for domestic ethanol production and consumption will provide market stability and the “necessary opportunity to put forth responsible approaches to reform current biofuel tax policy.” He added, “Such reforms must allow for the maturation of current ethanol technologies while simultaneously accelerating commercialization of cellulosic and advanced ethanol technologies.” 

Joe Jobe, CEO, National Biodiesel Board, added that retroactive reinstatement and extension of the biodiesel tax incentive through 2011 “is expected to increase U.S. biodiesel production and, in the process, displace foreign petroleum with a domestic advanced biofuel.”

The lapse of the tax incentive on December 31, 2009, had a detrimental impact on the domestic biodiesel industry.

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