Déjà Vu for Bioenergy Tax Extenders

Rolling Analysis, Omnibust 2020Déjà Vu for Bioenergy Tax ExtendersBioenergy tax extenders tacked onto a budget-busting omnibus

Energy & Natural Resources,  | Analysis
Dec 19, 2019  | 1 min read | Print Article

It’s déjà vu all over again. Just like in 2015 and 2018, Congress has handed the biofuels and biomass industries an expensive Christmas gift – bioenergy tax extenders tacked onto a budget-busting omnibus. In Dec. 2015, $27 billion in tax extenders were lopped onto the taxibus; in Feb. 2018, they took a ride on the Bipartisan Budget Act.

This year is more of the same with extra stocking stuffers for biodiesel. Under the $39.2 billion tax extenders package, biodiesel would receive a massive subsidy for the next three years in addition to retroactive tax credit extensions for 2018 and 2019. Coming in at an estimated $15.2 billion, the 5-year extension of the $1/gallon biodiesel tax credit is by far the most expensive tax extender. Other tax credits for ethanol blender pumps, cellulosic biofuels, biomass power, and other alternative fuels would receive shorter 3-year extensions (retroactive for 2018 and 2019 and prospectively for 2020). Even if these special interest giveaways achieved certain goals in taxpayers’ interest (which they don’t), much of the tax credits’ cost will be for business decisions that have already made.

Coupled with the fact that federal bioenergy tax credits do not require any minimum criteria be met in exchange for generous subsidies, the tax extender package will waste taxpayer dollars on subsidies working at cross-purposes with other federal programs aimed at clean air and water.

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