Senate Bill Extends Tax Credit for Biodiesel, Liquid Coal

The US Senate passed a bill this week that would give much-needed relief to the country’s biodiesel industry. However, it also includes two other misguided elements with environmental and budget consequences. 

The American Workers, State and Business Relief Act, included H.R.
4213, the Extenders Package which contains the extension of the $1-per-gallon biodiesel production tax credit.

The biodiesel blenders’ tax credit expired at the end of 2009, adding to difficulties the industry faced from lower oil prices and European tariffs. 

The bill calls for the tax
credit to be retroactive to January 1, which would give the industry a big boost. The extension runs out on December 31, 2010. 

The bill also extends liquid-coal tax credits and weakens window efficiency standards, according to the Natural Resources Defense Council.

Liquid coal emits nearly twice the global warming pollution as conventional fuel. Even if some of the production emissions are captured and stored, liquid coal may still be no cleaner than conventional fuel. Restoring the liquid coal credits could force taxpayers to heavily subsidize carbon-intensive technologies that harm the environment.

This provision should be removed from the legislation, NRDC says.

Meanwhile, another provision would allow less efficient windows to qualify for a tax credit. This could raise program costs by more than $145 million.

“These provisions would lead to decreased consumer savings and increased costs to taxpayers, while rolling back energy efficiency standards and increasing subsidies for dirty sources of energy. These two items need to be removed from the bigger bill, which has many provisions," Scott Slesinger, legislative director at the Natural Resources Defense Council said. "The House should call for a conference on this legislation and remove these provisions, rather than simply approving what the Senate voted on today.” 

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