Wind, biodiesel push for subsidy extensions

WASHINGTON — With subsidies for corn ethanol set to disappear at the end of the month, the rest of the renewable energy industry is lobbying lawmakers to keep their government incentives going.

The $1-a-gallon tax credit that undergirds the production of biodiesel also is due to expire Dec. 31, while tax incentives that support wind power and advanced forms of ethanol made from non-food feedstocks are due to end a year from now.

The companies that could be affected include Molded Fiber Glass, a manufacturer of wind turbine blades that has a plant in Aberdeen and biofuel giant Poet of Sioux Falls, which is working to commercialize ethanol made from cornfield residue.

The industries hope that Congress will include extensions of those subsidies in legislation that is needed to continue a variety of popular tax breaks that are expiring, including one that protects middle-income taxpayers from paying higher taxes under the alternative minimum tax, or AMT.

All incentives for renewable energy are facing tougher opposition in Congress, especially among Republicans. The GOP-controlled House hasn’t voted specifically on the renewable energy subsidies. But in a sign of how the politics of renewable energy have changed, the House voted overwhelmingly earlier this year to block an increase in the amount of ethanol that can be added to gasoline.

“It’s very difficult for me to predict as easily now as it was two years ago” what will happen to the subsidies, said Sen. Chuck Grassley, R-Iowa.

Renewable energy industries eventually might have to except a reduction in their subsidies in return for multi-year extensions, said Sen. John Thune, R-S.D.

“I don’t think a straight extension of many of these things is going to be doable in the current budgetary environment,” Thune said, referring to the massive deficits that have prompted calls for spending cuts.

Thune and Grassley are both members of the Senate Finance Committee, which writes tax policy.

The ethanol industry has been resigned to losing its 45-cent-per gallon tax credit on Dec. 31 after losing a key test vote this spring when the Democratic-controlled Senate voted by a wide margin to abolish the subsidy.

source: argusleader