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US renews incentives for non-food biofuel producers

(SeeNews) - Jan 3, 2013 - The US President and Congress on January 1 agreed to renew a non-food biofuel producer credit for one more year until January 1, 2014 along with other incentives for the sector.

The subsidy represents a tax credit of USD 1.01 (EUR 0.768) per gallon for second-generation biofuel sold or used after the American Taxpayer Relief Act of 2012 came into effect.

The agreement also renews a USD-1-per-gallon tax credit for producers and blenders of biodiesel and renewable diesel that previously expired on December 31, 2011. In addition, a special allowance for second-generation biofuel plant property has been extended until the end of 2013. The allowance is for accelerated depreciation for newly built facilities in 2013 and enables a taxpayer to "take a depreciation deduction of 50% of the adjusted basis of a new biofuel plant in the year it is put in service".

The Act also includes an amendment under which algae is added as qualified feedstock for biofuels for the first time. As a result, producers of fuels based on algae, cyanobacteria or lemna will be eligible for the biofuel producer credit which was in the past only available to cellulosic feedstocks.

(USD 1.0 = EUR 0.761)

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