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Mike Thompson, D-Calif., Chair of the House Ways and Means Subcommittee on Selected Revenue Measures, announced the introduction of the Growing Renewable Energy and Efficiency Act (GREEN) on Feb.5, which includes several tax enhancers that benefit the company would biofuel and bioenergy industries.
The law would extend the PTC Section 45 tax credit for electricity from certain renewable resources. For plants that generate electricity from landfill gas, garbage, qualified hydropower or marine and hydrokinetics, the credit would be extended to 2026.
It would also expand and modify the Section 48 Investment Tax Credit (ITC), which allows taxpayers to apply for credit for up to 30 percent of the cost of qualifying energy real estate. In most cases, the provision would extend the loan to full value for properties that start construction in late 2026 and then expire over two years. For biogas real estate, the bill would extend the ITC by 30 percent until the end of 2026. It would then decrease to 26 percent in 2027 and to 22 percent in 2028.
The GREEN Act would also extend the 45Q carbon sequestration credit to facilities starting construction before the end of 2026.
Additionally, the bill contains a provision that would allow taxpayers to elect to have made a tax payment equal to 85 percent of the value of the loan for which they would otherwise be eligible under the ITC, PTC, or Section 45Q credits would be eligible for carbon capture and sequestration. Rather than opting to carry forward credits for years when their credits exceed their tax liability, taxpayers can take a reduced credit and request a refund for the resulting overpayment of taxes. A fact sheet released by the subcommittee suggests that identifying companies with little or no tax liability could expedite the use of these loans.
For renewable fuels, the bill would extend the income and excise tax credits for biodiesel and biodiesel blends to $ 1.00 per gallon by 2022, with the credit to 75 cents per gallon by 2023, 50 cents per gallon in 2024, and 33 cents per gallon in 2024 Gallon Reduced The loan would expire in late 2025. The legislation would also extend credit for small agro-diesel producers from 10 cents per gallon through the end of 2025.
Further provisions of the bill aim to extend the tax credit for second generation biofuels and the credit for refueling real estate with alternative fuels until 2026.
A statement released by Thompson says the American Biogas Council and Biomass Power Association are among the groups supporting the GREEN Act.
The Carbon Capture Coalition has also spoken out in favor of the bill. Brad Crabtree, director of the CCC, said the direct payment option and extension of the 45Q loan included in the GREEN Act reaffirms the critical role that capture, removal, transportation, use and storage of carbon in fulfilling the U.S. Climate protection obligations have to play. “Direct Pay is an important tool that developers can use to receive the 45Q Tax Credit as an estimated payment on their tax return. This allows them to finance carbon capture, direct air capture, and carbon recovery projects without being subject to the onerous financial conditions and onerous transaction costs for tax-sharing financing, thereby promoting more technological innovations, jobs, and emissions reductions at no additional cost to the federal government, “he added .
Visit the Thompson website for more information, including a full copy of the invoice.