BREAKING NEWS: Obama signs tax pact; ethanol, biodiesel, renewable diesel credits restored

In Washington, President Barack Obama today signed H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.

Last night, the US House of Representatives voted by a 277 to 148 margin to approve the Obama tax deal, which extends the ethanol tax credit through 2011, and retroactively extends the biodiesel tax incentive and the renewable diesel incentive through 2011. The bill also renewed the 54-cent tariff on Brazilian ethanol through 2011.

Growth Energy CEO Tom Buis was invited to the signing ceremony for the Tax Relief Unemployment Extension Bill. At the ceremony, Buis presented the President with a letter on behalf of the American ethanol industry and its supporters, thanking him for delivering a common-sense ethanol tax policy.

In the letter, he wrote, “Every year, our addiction to foreign oil drains $1,000 for every man, woman and child out of our economy. That is money we should invest in Des Moines, not Abu Dhabi – Columbus, and not Caracas.  …by signing into law a one-year extension of the Volumetric Ethanol Excise Tax Credit, your leadership has set the table for comprehensive, long-term energy policy, including reform of the American transportation fuels market, as proposed by Growth Energy’s Fueling Freedom proposal. Our plan to reform the market would encourage the installation of blender pumps and make every auto sold in the U.S. a Flex Fuel Vehicle, ultimately giving American consumers the power to choose their fuel at the pump, instead of having that choice made for them.”

Joy from US ethanol and biodiesel interests was tempered by a call by UNICA for Brazil to lodge a complaint with the World Trade Organization over the ethanol tariff.

At the same time, Senate Democrats abandoned a plan for a $1.3 trillion omnibus spending bill that would have slashed funds for USDA loan guarantees and would have zeroed out funds for the Biomass Crop Assistance Program established under the 2008 Farm Bill. According to the Associated Press, “The 1,924-page bill collapsed of its own weight after an outcry from conservatives who complained it was stuffed with more than $8 billion in homestate pet projects known as earmarks.”

Reaction from industry included:

Mary Rosenthal, Executive Director, Algal Biomass Organization, said, “Congress’s decision to extend the incentives for the production and use of domestic renewable fuels is an essential step for the development of America’s biofuels industry. While long overdue, the extension of these important programs sends a strong signal of support for the importance of renewable, domestic fuels to our energy security, economy and environment.”

Joe Jobe, CEO, National Biodiesel Board, added, “Experience has shown that the biodiesel tax incentive is an effective tool to encourage the displacement of foreign petroleum with a superior, domestically produced Advanced Biofuel. Reinstatement of this proven incentive helps provide the policy framework needed to meet the nation’s renewable goals, and the NBB sincerely appreciates the bipartisan cooperation and support that made extension of this worthwhile incentive possible.

Randy Olson, Executive Director of the Iowa Biodiesel Board, added, “We are extremely pleased that the biodiesel tax credit extension has now been passed with strong bipartisan support in both the Senate and the House. Biodiesel has long been a bright spot in our state’s economy, supporting green jobs and generating economic activity on the farm and beyond. It’s also a vital component of our national energy security. Iowa’s biodiesel producers are looking forward to ramping back up to full-scale production of America’s first Advanced Biofuel and bringing jobs back to Iowa while helping our nation meet its commitment to Renewable Fuels.”

Much more industry reaction in our round-up that followed last night’s House of Representatives vote, here.