Expires Next Week But Allows Large Credits for This Year
President Obama has signed legislation extending the per-gallon alternative fuel and alt fuel infrastructure credits that expired at the end of 2013 through the end of this year. The new law allows firms that sold fuel for natural gas vehicles, or biodiesel, or propane autogas for transportation, or that invested in infrastructure for AFVs, to file for significant tax credits for 2014. updated December 23 and December 29
Because the bill averts a tax bump for companies who took advantage of the credits in 2013, it is known as the Tax Increase Prevention Act of 2014.
The bill extends the 50¢-per-gallon gasoline gallon equivalent for natural gas and the $1.00 per gallon blender’s tax credit for biodiesel. It also extends the 30%/$30,000 investment tax credit for alternative vehicle fueling installations and the $1,000 tax credit for home fueling appliances.
The alt fuel credit alone is worth some $397 million.
“Passage of the alternative fuel tax and infrastructure credits help build the network to support NGVs,” NGVAmerica president Matthew Godlewski said in a release. “It also demonstrates continued support in the Congress for natural gas as a transportation fuel.”
“The fuel and infrastructure tax credits, which passed both Houses of Congress with significant bipartisan and industry-wide support, will be another catalyst in the adoption of clean, U.S.-produced natural gas as a transportation fuel,” said Clean Energy Fuels president and CEO Andrew Littlefair.
A Boost for Biodiesel, and for Propane Autogas
Clean Energy delivered more than 190 million gallon equivalents of natural gas fuels through September, putting it on track for 257 million gallons for the year, or a tax credit of more than $125 million.
Las Vegas-based Methes Energies International, which produces biodiesel, said it expects to get back approximately $1 million for fuel sold this year.
Texas-based Darling Ingredients, citing its Diamond Green Diesel joint venture with Valero, said its expects reinstatement of the federal biodiesel mixture excise tax credit for 2014 to be worth “approximately $65 million.”
And, “While propane autogas is a competitive transportation fuel without tax incentives,” said Alliance AutoGas president Stuart Weidie, “we are pleased that the more than 650 fleet customers of Alliance Autogas will realize the cost savings associated with the 50 cent per gallon credit in 2014.
“I maintain that it is in the national interest for the government to encourage the use of propane autogas,” Weidie told F&F – “a domestically produced, environmentally beneficial and cost effective transportation fuel.”
Now for that Excise Tax Issue
“The passing of H.R. 5771 is a boon for alternative fuel technology and companies that have implemented alternative fuels, like propane autogas,” said Roush CleanTech sales and marketing VP Todd Mouw. “With Congress showing its continued support, this legislation will help expand the usage of domestically produced transportation fuels across the United States,” he told F&F.
NGVAmerica notes that the law directs the Treasury Department to issue rules governing how firms will file for their tax credits, and that such likely will be due sometime in August.
A key target for 2015? Changing the current per-gallon excise basis that penalizes liquefied natural gas because of LNG’s lower energy content as compared with diesel. “Resetting the tax rate so that it is applied on an energy content basis is a common sense measure that would remove an artificial barrier from the market,” NGVAmerica says.
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Source: NGVAmerica, Methes Energies with Fleets & Fuels follow-up