Corn prices have surged but, as Biofuels Digest reports, the culprit this time is a poor harvest and shutdown of grain exports from Russia.
U.S. ethanol production remains sluggish as low gas prices and a lack of investment capital have held back plans for new plants. In addition, Congress’ inability to extend biofuel subsidies that expired that the end of 2009 means that China has surged ahead of the rest of the G20 both in energy consumption and in clean energy investment.
After the House and Senate passed bills including an extension of the alternative fuel mixture and biodiesel tax credit program, alternative fuel producers assumed that Congress would act quickly to put the legislation into a form that could be signed by the President.
It has been more than two weeks now, however, and still Congress has not reconciled the two bills.
House Ways and Means Committee Chairman Sander Levin (D-Mich.) is quoted by BNA Daily Tax Reports (March 23) to say that if lawmakers must hold a formal conference committee to settle differences on legislation extending expired and expiring tax cuts, it could be a long time before a compromise is reached.
Levin’s comments came the day after he told the House Rules Committee that it is “uncertain” when the House will consider the $31 billion extenders package (H.R. 4213), telling that panel the Senate-passed legislation has “many other provisions in it we need to consider within the committee and I’m thinking we’re going to have a conference committee and if we do I think the likely result is it will take considerable time to complete it.”
According to Levin, the House and the Senate used different offsets to pay for AFM and biodiesel tax cuts that expired December 31, 2009.
Until the bills are reconciled and signed by the President, the AFM and biodiesel tax credit remain in abeyance and the alternative fuel industry remains in limbo.
The Senate voted yesterday to move forward with Senator Reid’s stripped-down version of the Hiring Incentives to Restore Employment Act. The bill could be voted upon by the Senate by the end of the week. Reid’s version of the bill, however, omits the extension of the alternative fuel mixture and biodiesel tax credits that were included in the earlier (Baucus/Grassley) version of the bill.
Iowa Senator Charles Grassley, one of the sponsor of the Biodiesel Tax Credit Reform and Extension Act, is continuing to push for the Senate to act on the bill before the end of the year. Existing tax credit programs for biofuels expire at the end of 2009 unless Congress acts.
Grassley has said that the bill, along with other matters, is being pushed back as the Senate’s time is absorbed with the debate over health care. Grassley said that he opposed simply extending the tax for another year because that could create a “legislative deadlock.”
Our weekly compendium of renewable energy news and information from around the Web.
Trony Solar IPO
Chinese PV manufacturer Trony Solar is looking to raise $241 million in its planned initial public offering. J.P. Morgan and Credit Suisse are said to be the lead underwriters in the offering.
Atlanta Foodservice Runs on Biodiesel
The Atlanta division of U.S. Foodservice is now running on biodiesel. The Atlanta division’s 185 tractors began using biodiesel fuel early in November following the first 7,500-gallon delivery of B5. In addition to using biodiesel blends in the tractors, the fuel will power the four-cylinder, Thermo King Engines in its 210 refrigerated trailers.
Atlanta joins the U.S. Foodservice division in Plymouth, Minn., which uses B5, and the Streator, Ill., division which uses B11 in all but the winter months. The Minnesota facility has used biodiesel blends for years, the company stated, starting with B3 and switching to the state-mandated B5. “The division has had no performance or engine longevity issues,” a company spokesman said. U.S. Foodservice Minnesota is exploring a switch to B10 ahead of a state-mandate increase that takes effect in 2012.
U.S. Foodservice-Atlanta is active with and has a leadership role in several local, regional and state efforts to promote and protect the environment including the Georgia DNR Project, Partnership for a Sustainable Georgia and the Atlanta Zero Waste Zone.
Danish Ethanol
Inbicon unveiled a 1.4 MGY cellulosic ethanol demonstration plant in Denmark, using wheatstraw as its initial feedstock. Inbicon has been working in partnership with Danish governmental energy authorities and the unveiling was timed to coincide with the climate change conference in Copenhagen.
Portable Solar
The BBC ran a lengthy article on applications for portable solar power. Portable solar can be an efficient solution for devices that would ordinarily run on batteries or that would require new powers lines to connect to the grid, including street lights and signs.
Push for Extension of Biofuel Tax Credit
The National Biodiesel Board voiced its support for two bills pending in Congress that would extend the biofuel tax credit program that expires at the end of 2009. (H.R. 4070 and S.B. 1589). During visits with lawmakers, biodiesel industry leaders expressed strong support for S. 1589, the Biodiesel Tax Incentive Reform and Extension of Act, introduced by Senators Maria Cantwell (D-WA) and Charles Grassley (R-IA), and H.R. 4070, companion legislation introduced yesterday by Representatives Earl Pomeroy (D-ND) and John Shimkus (R-IL). This legislation would reform the biodiesel tax incentive by changing the current blenders excise tax credit to a production excise tax credit. This will improve administration of the incentive, eliminate potential abuses and improve tax compliance. The proposals would also extend the biodiesel tax incentive for five years, providing the certainty entrepreneurs need to create jobs and expand the use of biodiesel.
Comings Events in Renewable Energy
The Renewable Fuels Association is hosting its 15th Annual Ethanol Conference in Orland, Fla. on February 15-17, 2010. Panels will cover the indirect land use charges debate and the path forward for commercialization of biofuels. Registration before January 22 will get members a discounted entrace for $550 ($750 for non-members).
Registration is still open for the Canadian Biofuels Summit to be held in Vancouver, BC November 30 to December 2, 2009.
50 Hottest Companies in Bioenergy
Ballots are due today for the Biofuels Digest “50 Hottest Companies” competition.
Write to Us!
We’d love to hear from if you have an idea for a story or would simply like your renewable energy company covered. Write to us at “editor at renewableenergymemo dot com”.
A California congressman has introduced a bill (H.R. 4070) that aims to extend the biodiesel tax credit program another five years. North Dakota Representative Early Pomeroy introduced the legislation on November 16, 2009 after which it was referred to the House Ways and Means Committee. The bill is a companion to S.B. 1589, introduced by Maria Cantwell and Charles Grassley two months ago.
A provision in the health care bill passed by the House of Representatives over the past weekend (H.R. 3962) would cut the tax credits currently benefitting cellulosic ethanol and other biofuel tax producers.
Section 555 of the bill excludes from the cellulosic biofuel producer credit (under Section 40(b)(6) of the Internal Revenue Code) any fuel that (a) consists of more than 4% water and sediment or (b) consists of more than 1% ash.
In an attempt to generate revenues to pay for the costs of expanded health care, the House bill eliminated tax credit provisions that are expected to return $24 billion to the U.S. Treasury over the next 10 years. Members of the House from Midwestern and other farm states who voted in favor of the bill have already staked out positions in favor of eliminating the tax credit cut in the final version of the health care bill.
Our weekly compilation of renewable energy news and information from around the Web.
Qualified Advanced Energy Project Tax Credits
We covered the DOE’s guidance on QAEP (or Section 48C) tax credits and the application process now under way. (Refer to our white paper for details on the application process). We’re working on a free webinar on the topic on September 2, 2009.
Solar Loses Some Shine
The Wall Street Journal reported on slumping sales at a number of solar companies due to the global recession. It reported that the expiration of an incentive program in Spain also accounted for a dramatic drop-off in solar sales in that country. In 2008, the WSJ reported, “Spain accounted for more than 40% of all new solar panel installation globally, installing 2.7 gigawatts — five times the 2007 figure — out of a global total of 5.6 gigawatts. According to Spain’s photovoltaic industry association, Asif, the country’s market was worth €16.38 billion ($23.24 billion). This year, with cuts to aid and a more complicated application process, there has been no new installation in Spain.”
The slump in global sales, however, has not reduced the marketing emphasis given to solar efforts, however, in the U.S. with Baker Roofing, Inc., one of the largest roofing companies in the U.S., announcing its formation of a “green” subsidiary that will focus on roof-top gardens and roof-top solar. The company, based in Raleigh, NC, has completed a number of installations in 2009 and has a glitzy, separate website devoted to its green efforts.
Pending Legislation
When Congress returns from its Summer recess on September 8th it has alot of work to do. There are at least three bills of keen interest to the renewable energy community, including:
* The Biodiesel Tax Incentive Reform and Extension Act;
* The American Renewable Energy Act; and
* The Cleaner, Secure, Affordable Thermal Energy Act.
The Biodiesel Tax Incentive Reform and Extension Act is an attempt to circumvent the “black liquor” controversy by converting the existing blender’s tax credit into a $1/gallon ethanol producer’s credit. As previously reported, however, the bill would do nothing to extend the existing non-biodiesel alternative fuel producer’s credit that expires at the end of 2009.
The American Renewable Energy Act would require 25% of all U.S. electric production to come from renewable sources by the year 2025, while the Cleaner, Secure, Affordable Thermal Energy Act would create tax credit incentives for both residential taxpayers and business taxpayers who converted heating oil furnaces into natural gas or biomass-burning furnacts. You can follow pending legislation in the renewable energy space here.
Lowering Costs for Cellulosic Ethanol
Corn-based ethanol producers are finding the times tough. A relatively low-priced oil market has kept gasoline below $3/gallon and margins are thin. Cellulosic ethanol producers have found it hard to attract the capital needed to build production-scale plants.
A new producer in Connecticut is planning a 15 MgY plant at a production cost of less than $1 per gallon.
Connecticut-based American Energy Enterprises Inc. plans to construct a commercial-scale ethanol production facility in New Milford, Conn., and according to company chairman Christopher Brown, will use wood waste to produce ethanol at a cost of 80 to 85 cents per gallon. The plant is expected to begin production in mid-2010 and will initially produce up to 15 MMgy. Once production commences, units will be added monthly to increase capacity until the plant reaches its full capacity of 80 MMgy to 100 MMgy.
A contributing factor to the company’s low production cost is its plan to acquire feedstock at no cost or, in some cases, at a profit. Brown said that tipping fees for wood waste at landfills and wood chip companies in the region range up to $60 per ton. American Energy will offer lower fees or take the wood waste for free. “We’re in good shape with the municipalities, the local tree groomers and handlers of that material, and some of the waste companies,” he said, adding that contracts are in place to supply the plant with triple its need for feedstock for the first five years. Brown said the option to ship feedstock by rail to the facility from over 100 miles away is available, but so far, the 1 million tons of feedstock required annually can be acquired from within a 15-mile radius of the plant.
Meanwhile, another struggling cellulosic ethanol project in Pike County, Kentucky, believes its one step closer to its $200 million target to break ground on a waste-to-ethanol plant there under the guidance of Agresti Biofuels. Project sponsors are now said to be looking for private financing to fill out the needed funding.
Senate Finance Committee member Sen. Maria Cantwell (D-WA) and ranking Republican Charles Grassley (R-IA) yesterday introduced a bill that would modify and extend the existing tax credit program for biodiesel.
The Biodiesel Tax Incentive Reform and Extension Act of 2009 would:
• Change the incentive from a blender credit to a production tax credit. Producers of biodiesel would qualify for the entire $1/gallon credit without the need to blend their fuels with taxable (petroleum) fuels.
• Provide the $1 per gallon tax credit for the production of biodiesel, renewable diesel and aviation jet fuel that complies with fuel standards and Clean Air Act requirements that define qualified fuels under current law.
• For small producers, those with an annual production capacity of less than 60 million gallons, the credit increases from $1 to $1.10 for the first 15 million gallons of biodiesel produced.
• Simplify the definition of “biodiesel” to encourage production from any biomass-based feedstock or recycled oils and fats.
• Simplify the coordination between the income tax credit and the excise tax liability to tighten compliance and reduce administrative burdens on taxpayers.
• Extend this tax credit for five years, eliminating the uncertainty from the pending expiration at the end of 2009.
The bill is not yet available for download from Thomas but a pre-publication copy is available here.
Powered by WordPress