The much discussed “fiscal cliff” was narrowly averted when the U.S. Congress passed The American Taxpayer Relief Act of 2012 in early January. What didn’t make big headlines is the news that several incentives that benefit the alternative fuels industry were included in the legislation. The credits, many of which had expired at the end of 2011, will be in effect through the end of 2013, and a few new provisions were added. These credits are intended to help lower the price of alternative fuels and make them more competitive with fossil fuels, as well as help start-ups grow their businesses.
Here’s a quick rundown of what’s included:
Biofuel producers receive a $1.01 per gallon credit.
Biodiesel and renewable diesel producers receive a $1 per gallon credit.
Fuels produced from algae qualify for a tax credit for the first time.
Cellulosic biofuel facilities can expense 50 percent of capital costs in their first year of service.
Buyers of two- and three-wheeled plug-in electric vehicles that can go at least 45 miles per hour are eligible for a federal income tax credit up to 10 percent, with a limit of $2,500.
Alternative fueling stations receive a 30 percent credit, up to $30,000.
Compressed natural gas and liquefied natural gas producers receive a $.50 per gallon tax credit.
As America works towards reducing the nation’s dependence on oil, incentives like these are helping to support the research and development needed to create viable alternative fuel sources.