Reuters: IRA tax credits could help ethanol industry
A major expansion in tax credits for companies that capture and store carbon emissions under the Inflation Reduction Act could be a boon to the ethanol industry as it seeks to meet its mid-century climate goals, Reuters reported.
When President Biden signed the law on Tuesday, Emily Skor, CEO of Growth Energy, a company that builds and runs ethanol plants, praised Biden in a news release and listed the tax credits that will apply to the biofuels industry.
“We applaud President Biden and Congressional leaders for advancing our nation’s investment in low-carbon biofuels for a cleaner future,” said Skor. “Biofuels are critical to meeting climate goals, and this law will help maximize our industry’s contributions to a cleaner future by expanding the volume of low-carbon biofuels available across the entire transportation sector – on the ground, in the air, and at sea. This initiative will help jumpstart climate progress, while delivering more savings at the pump, greater long-term energy security, and a welcome economic boon to rural communities.”
Skor said included in the Inflation Reduction Act are several key priorities for the biofuels industry:
▪ 45Q tax credits for carbon oxide sequestration and utilization extended through 2032 with adjusted rates of $85/ton for sequestration and $60/ton for utilization.
▪ Clean Fuel Production Credit starting in 2025 and expiring at the end of 2027 for the production of low-carbon fuels.
▪ Five years of Sustainable Aviation Fuel credits: A stand-alone credit for SAF then as part of the Clean Fuel Production Credit for three years.
▪ $500 million for biofuels infrastructure through the end of 2031.
▪ Extension of Biomass-Based Diesel Blenders Credit and the Second-Generation Biofuels Producer Credit for two years.
▪ $300 million grant program to increase domestic production and deployment of SAF and low-emission aviation technologies.
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