All Eyes on Extension of Biodiesel Tax Credit

Renewable Energy Sectors Push for Extension Before Time Runs Out

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Will biodiesel companies and accounting firms get their holiday wish?  As the urgency increases for Congress to extend the expired biodiesel tax incentive before the end of the year, the impact for potentially more policy uncertainty is continuing to strain America’s producers and communities which are already suffering from a battered ag economy.

How Extension Could Help a Strained Ag Economy

A decision to create a tax extension would be welcome news for national trade organizations and producers alike, as it would certainly ease some of the economic strain and hardships surrounding the biodiesel industry.  In an effort to make this happen, executives from 11 national trade associations recently pleaded with House and Senate leaders for this extension by citing the benefits and broad bipartisan support in favor of these important tax credits.

The Biodiesel tax credit benefits multiple renewable energy sectors such as biodiesel and renewable diesel.  K·Coe’s Donna Funk underscores the urgency, “Many of these companies are newer and were started with the tax credit built into their business model, therefore it’s critical for their successful entry into the marketplace.”

Funk adds that there are a host of ways the credit could be re-instated and create certainty for businesses, such as:

  • re-instate it for 2019 (if not retroactive to 2018) and extend it for 5-10 years with a certain expiration at that point,
  • limit the gallons any one company can claim the credit against similar to how the “old” small producer ethanol credit worked and was wildly successfully,
  • limit the eligibility to domestically produced products,
  • do not give the credit to imported products.

K·Coe’s biofuels team will keep you updated on any policy changes as they happen.  Should you have questions regarding tax credits and planning, reach out to our advisory team.

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