Alternative Fuel and Advanced
Vehicle
Vehicle Technology Incentives: A
Summary of Federal
Programs
Lynn J. Cunningham
Information Research Specialist
Beth A. Roberts
Information Research Specialist
Bill Canis
Specialist in Industrial Organization and Business
Brent D. Yacobucci
Section Research Manager
January 10, 2013
Congressional Research Service
7-5700
www.crs.gov
R42566
CRS Report for Congress
Prepared for Members and Committees of Congress
Alternative Fuel and Advanced Vehicle Technology Incentives
Summary
A wide array of federal incentives supports the development and deployment of alternatives to
conventional fuels and engines in transportation. These incentives include tax deductions and
credits for vehicle purchases and the installation of refueling systems, federal grants for
conversion of older vehicles to newer technologies, mandates for the use of biofuels, and
incentives for manufacturers to produce alternative fuel vehicles. The current array of incentives
for alternative fuels and related technologies does not reflect a single, comprehensive strategy, but
rather an aggregative approach to a range of discreet public policy issues, including goals of
reducing petroleum consumption and import dependence, improving environmental quality,
expanding domestic manufacturing, and promoting agriculture and rural development.
Summary of Federal Programs
June 2, 2015
(R42566)
Summary
A wide array of federal incentives supports the development and deployment of alternatives to conventional fuels and engines in transportation. These incentives include tax deductions and credits for vehicle purchases and the installation of refueling systems, federal grants for conversion of older vehicles to newer technologies, mandates for the use of biofuels, and incentives for manufacturers to produce alternative fuel vehicles. The current array of incentives for alternative fuels and related technologies does not reflect a single, comprehensive strategy, but rather an aggregative approach to a range of discreet public policy issues, including goals of reducing petroleum consumption and import dependence, improving environmental quality, expanding domestic manufacturing, and promoting agriculture and rural development.
Current federal programs are administered by five key agencies: Department of the Treasury
,
, Department of Energy
, , Department of Transportation
, , Environmental Protection Agency, and the
U.S. Department of Agriculture. The incentives and programs described in this report are
organized by the responsible agency.
•
Treasury (through the Internal Revenue Service, IRS) administers tax credits and
deductions for alternative fuel and advanced technology vehicle purchases,
expansion of alternative fuel refueling infrastructure, and incentives for the
production and/or distribution of alternative fuels. Many of these incentives have
expired in recent years although some were extended by the
American Taxpayer
Relief Act of 2012 (P.L. 112-240).
•
Tax Increase Prevention Act of 2014 (P.L. 113-295).
DOE (mainly through the Office of Energy Efficiency and Renewable Energy,
EERE) administers research and development (R&D) programs for advanced
fuels and transportation technology, grant programs to deploy alternative fuels
and vehicles, and a loan program to promote domestic manufacturing of
highefficiency vehicles.
•
high-efficiency vehicles.
DOT (mainly through the Federal Highway Administration, FHWA, and Federal
Transit Administration, FTA) administers grant programs to deploy
“"clean fuel
”
" buses and other alternative fuel vehicles. DOT (through the National Highway
Traffic Safety Administration, NHTSA) also administers federal Corporate
Average Fuel Economy (CAFE) standards, which include incentives for
production of alternative fuel vehicles.
•
EPA (mainly through the Office of Transportation and Air Quality, OTAQ)
administers the Renewable Fuel Standard, which mandates the use of biofuels in
transportation. EPA also administers grant programs to replace older diesel
engines with newer technology.
•
USDA (mainly through the Rural Business-Cooperative Service, RBS)
administers grant, loan, and loan guarantee programs to expand agricultural
production of biofuel feedstocks, conduct R&D on biofuels and bioenergy, and
establish and expand facilities to produce biofuels, bioenergy, and bioproducts.
Congressional Research Service
Alternative Fuel and Advanced Vehicle Technology Incentives
Contents
Introduction...................................................................................................................................... 1
Factors Behind Alternative Fuels and Technologies Incentives ...................................................... 2
Developing Domestic Ethanol Production ................................................................................ 2
Establishing Other New Alternative Fuels ................................................................................ 3
Encouraging the Purchase of Non-Petroleum Vehicles ............................................................. 3
Reducing Fuel Consumption and Vehicle Emissions ................................................................ 3
Supporting U.S. Motor Vehicle Manufacturing ......................................................................... 4
Highway Funding and Fuels Taxes............................................................................................ 4
Structure and Content of the Report ................................................................................................ 4
Department of the Treasury ............................................................................................................. 5
Motor Fuels Excise Taxes.......................................................................................................... 5
Incentives for Alternative Fuel and Alternative Fuel Mixtures (other than Liquefied
Hydrogen)............................................................................................................................... 6
Alternative Motor Vehicle Credit .............................................................................................. 7
Plug-in Electric Drive Vehicle Credit ........................................................................................ 7
Plug-in Electric Vehicle Credit .................................................................................................. 8
Conversion Kits ......................................................................................................................... 9
Alternative Fuel Refueling Property Credit............................................................................... 9
Volumetric Ethanol Excise Tax Credit..................................................................................... 10
Small Ethanol Producer Credit ................................................................................................ 11
Biodiesel Tax Credit ................................................................................................................ 11
Small Agri-Biodiesel Producer Credit ..................................................................................... 12
Renewable Diesel Tax Credit .................................................................................................. 13
Credit for Production of Cellulosic and Algae-Based Biofuel ................................................ 13
Special Depreciation Allowance for Cellulosic and Algae-Based Biofuel Plant
Property ................................................................................................................................ 14
Department of Energy .................................................................................................................... 15
Advanced Technology Vehicle Manufacturing Loan Program ................................................ 15
Vehicle Technologies Program ................................................................................................ 16
Biomass and Biorefinery Systems Program ............................................................................ 17
Hydrogen and Fuel Cell Technologies Program ...................................................................... 17
Clean Cities Program............................................................................................................... 18
Department of Transportation ........................................................................................................ 19
Corporate Average Fuel Economy Program Alternative Fuel Vehicle Credits ........................ 19
Congestion Mitigation and Air Quality Improvement Program .............................................. 20
Clean Fuels Grant Program ..................................................................................................... 20
Environmental Protection Agency ................................................................................................. 21
National Clean Diesel Campaign ............................................................................................ 21
Renewable Fuel Standard ........................................................................................................ 22
Department of Agriculture ............................................................................................................. 23
Biorefinery Assistance ............................................................................................................. 23
Repowering Assistance ............................................................................................................ 23
Bioenergy Program for Advanced Biofuels............................................................................. 24
Biomass Crop Assistance Program .......................................................................................... 24
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Alternative Fuel and Advanced Vehicle Technology Incentives
Rural Energy for America Program ......................................................................................... 25
Biomass Research and Development ...................................................................................... 25
U.S. Customs and Border Protection—Import Duty on Fuel Ethanol ........................................... 26
Figures
Figure 1. Net Oil Imports................................................................................................................. 2
Tables
Table A-1. Federal Programs by Agency ....................................................................................... 28
Table A-2. Federal Taxes and Incentives for Alternative Fuels ..................................................... 35
Table A-3. Federal Incentives for Alternative Fuel and Advanced Technology Vehicles .............. 37
Appendixes
Appendix. Summary Tables ........................................................................................................... 27
Contacts
Author Contact Information........................................................................................................... 38
Congressional Research Service
Alternative Fuel and Advanced Vehicle Technology Incentives
Introduction
A wide array establish and expand facilities to produce biofuels, bioenergy, and bioproducts.
Alternative Fuel and Advanced Vehicle Technology Incentives: A Summary of Federal Programs
Introduction
A range of federal incentives supports the development and deployment of alternatives to
conventional fuels and engines in transportation. These incentives include tax deductions and
credits for vehicle purchases and the installation of refueling systems, federal grants for
conversion of older vehicles to newer technologies, mandates for the use of biofuels, and
incentives for manufacturers to produce alternative fuel vehicles.
Some of these incentives have expired in recent years when Congress chose not to extend them.
Many of the policy choices presented for alternative fuel and advanced vehicle technologies
originated as a response to the nation
’'s interest in reducing petroleum imports, a goal first
articulated at the time of the two OPEC oil embargoes in the 1970s. While President Richard
Nixon is often cited as the first President to call for
“"energy independence,
”" successive Presidents
and Congresses have made efforts to reduce petroleum imports as well.
As shown in Figure 1, since peaking in 2005, net U.S. oil imports have fallen by
one-third, and
now represent 45% of domestic consumption, down from 60% in 2005.160%. Factors in this reversal
have been include the recent recession
and the rise in petroleum prices in 2008, both of, which reduced
domestic demand, as well as a rise in the supply of U.S. oil and oil alternatives due to increased
private sector investment and federal incentives, some of which are cited in this report. In
addition, the United States has become a net exporter of petroleum products (while it remains a
net importer of crude oil).
In addition to concerns over petroleum dependence, other factors have also driven policy on
alternative fuels and advanced vehicle technologies. The current
array of incentives
doesdo not
reflect a single, comprehensive strategy but rather an aggregative approach to a range of discreet
public policy issues, including improving environmental quality, expanding domestic
manufacturing, and promoting agriculture and rural development.
1
CRS Report R42465, U.S. Oil Imports and Exports, by Robert Pirog.
Congressional Research Service
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Alternative Fuel and Advanced Vehicle Technology Incentives
Figure 1. Net Oil Imports
In millions
In thousands of barrels a day (Mb/d)
and as share of U.S. consumption
, annual average
Source:
EIA, Monthly Energy Review, March 2015, http://www.eia.gov/totalenergy/data/monthly/#petroleum.
Note:EIA, Petroleum & Other Liquid Fuels, February 28, 2012, http://www.eia.gov/petroleum/data.cfm.
Note: Net oil imports are gross imports minus exports.
Factors Behind Alternative Fuels and Technologies
Incentives
Incentives
While a reliance on foreign sources of petroleum has been an overriding concern for the past 40
years, other factors, such as rural development, promotion of domestic manufacturing, and
environmental concerns, have also shaped congressional interest in alternative fuels and
technologies. A variety of programs affecting alternative fuels and technologies have been
proposed and enacted, each with its own benefits and drawbacks. (This report does not evaluate
the effectiveness of alternative fuel programs and incentives
)..) Alternative fuels programs fall into
one of the following six categories: expanding domestic ethanol production; establishing other
alternative fuels; encouraging the purchase of non-petroleum vehicles; reducing fuel consumption
and greenhouse gas emissions; supporting U.S. vehicle manufacturing; and funding U.S.
highways.
Developing Domestic Ethanol Production
Ethanol has been seen as a homegrown alternative to imported oil and a number of programs
were put in place to encourage its domestic development (instead of importing from other ethanol
producers, such as Brazil). To spur establishment of this domestic industry, Congress has enacted
a number of laws, which are also beneficial to states that have a large concentration of corn
growers (corn being the raw material feedstock in most U.S. ethanol). Until recently, the
incentives for ethanol production have most often been included in farm-related legislation and
appropriations and hence have been administered by the U.S. Department of Agriculture (USDA),
or in tax provisions administered by the Internal Revenue Service (IRS). Notably, the volumetric
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Alternative Fuel and Advanced Vehicle Technology Incentives
ethanol excise tax credit (VEETC), which expired at the end of 2011, ethanol excise tax credit (VEETC) provided a tax credit to
gasoline suppliers who blend ethanol with gasoline
. The, and the small ethanol producer tax credit
provided a limited additional credit for small ethanol producers.
Both credits expired at the end of 2011.
Establishing Other New Alternative Fuels
In addition to ethanol, Congress has sought to spur development of other alternative fuels, such as
biodiesel, cellulosic biofuel, hydrogen, liquefied petroleum gas (LPG), compressed natural gas
(CNG), and liquefied natural gas (LNG). Some of these fuels have been supported through tax
credits2 credits (such as the biodiesel tax credit), federal mandates (mainly the Renewable Fuel Standard
(RFS)), and R&D programs (such as the Biomass Research and Development Initiative, which
provides grants for new technologies leading to the commercialization of biofuels).
Encouraging the Purchase of Non-Petroleum Vehicles
Congress has enacted laws that seek to boost consumer interest by providing tax credits for the
purchase of some vehicles that consume far less petroleum or do not consume petroleum at all.
These tax credit programs are generally limited in duration as a way to encourage early adopters
to take a risk on new kinds of vehicles. The assumption behind these laws is that once a
significant number of such new cars enter the mainstream, more and more car buyers would be
attracted to them, prices would fall, and the credits would no longer be needed. The credits have
been available for plug-in vehicles (pure battery-electric and plug-in hybrid), hybrid vehicles, and
those with fuel cells, advanced lean
burn3burn technology,
1 and certain alternative fuels technologies.
Congress has also enacted tax credits to spur the expansion of infrastructure to fuel such vehicles.
Reducing Fuel Consumption and Vehicle Emissions
Several agencies have been mandated by Congress and by the Obama Administration to address
concerns over fuel consumption and vehicle emissions through programs for alternative fuels,
including the Environmental Protection Agency (EPA) and the Department of Transportation
(DOT). The most significant and long-standing program to reduce vehicle fuel consumption is the
Corporate Average Fuel Economy (CAFE) program administered by DOT.
42 Under CAFE,
manufacturers can accrue credits for the production and sale of certain types of alternative fuel
vehicles. A
recent joint rulemaking process between DOT and EPA links future CAFE standards
with greenhouse gas (GHG) standards under the Clean Air Act. DOT also established the
Congestion Mitigation and Air Quality Improvement Program (CMAQ) to fund programs that
will reduce emissions in urban areas that may exceed certain air quality standards. At EPA, the
Diesel Emission Reduction Act (DERA) was implemented with a goal of reducing diesel
emissions by funding and implementing new technologies. In addition, EPA
’'s Renewable Fuel
Standard (RFS) mandates the scalable use of renewable fuels in gasoline between 2006 and
2
Several alternative fuel tax credits were extended or reinstated in P.L. 112-240.
In general these are advanced diesel vehicles.
4
For more information, see CRS Report R42721, Automobile and Truck Fuel Economy (CAFE) and Greenhouse Gas
Standards, by Brent D. Yacobucci, Bill Canis, and Richard K. Lattanzio.
3
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Alternative Fuel and Advanced Vehicle Technology Incentives
2022.5 2022.3 Under the RFS, GHG emission reduction requirements apply to biofuels from newer
refineries.
Supporting U.S. Motor Vehicle Manufacturing
The Department of Energy (DOE), in partnership with U.S. automakers and academic
institutions, has overseen research and development programs on vehicle electrification for nearly
40 years, in particular research focused on how to produce economical batteries that extend
electric vehicle range. These R&D programs were supplemented in the American Recovery and
Reinvestment Act (ARRA; P.L. 111-5) to include grants to build lithium-ion battery
manufacturing plants in a bid to boost the international competitiveness of this sector. The
Advanced Technology Vehicles Manufacturing (ATVM) loan program at DOE supports
manufacturing plant investments to enable the development of technologies to reduce petroleum
consumption, including the manufacture of electric and hybrid vehicles.
6
4
Highway Funding and Fuels Taxes
As described below (see
“"Motor Fuels Excise Taxes
”"), one of the earliest fuels-related federal
programs is the motor vehicle fuels excise tax first passed in the Highway Revenue Act of 1956
to fund construction and then maintenance of the interstate highway system.
75 Originally, only
gasoline and diesel were taxed, but as newer fuels became available (such as ethanol and
compressed natural gas), they were added to the federal revenue program, but often at lower tax
rates than gasoline or diesel. Lower tax burdens for some fuels or vehicles effectively incentivize
those choices over conventional options. However, lower tax burdens for these vehicles and fuels
could ultimately compromise federal highway revenue. The vehicles responsible for lower tax
revenues include traditional internal combustion engine vehicles with higher mileage per gallon
as well as new technology electric and hybrid cars.
Structure and Content of the Report
The federal tax incentives and programs discussed in this report aim to support the development
and deployment of alternative fuels. There is no central coordination of how these incentives
interact. In general, they are independently administered by separate federal agencies, including
five key agencies: Treasury, DOE, DOT, EPA, and USDA.
This report focuses strictly on those programs that directly support alternative fuels or advanced
vehicles, and does not address more general programs (e.g., general manufacturing loans, rural
5
CRS Report R40155, Renewable Fuel Standard (RFS): Overview and Issues, by Randy Schnepf and Brent D.
Yacobucci.
6
For more information, see CRS Report R42064, The Advanced Technology Vehicles Manufacturing (ATVM) Loan
Program: Status and Issues, by Brent D. Yacobucci and Bill Canis.
7
The gasoline tax was originally enacted in 1932 and dedicated solely to reducing a federal budget deficit. It remained
that way until the passage of the Federal Aid Highway Act of 1956 (P.L. 84-627) which established the Highway Trust
Fund; the Highway Revenue Act was Title II of P.L. 84-627. For more details about the role of the fuels tax in funding
the federal highway program, see CRS Report RL30304, The Federal Excise Tax on Gasoline and the Highway Trust
Fund: A Short History, by James M. Bickley.
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Alternative Fuel and Advanced Vehicle Technology Incentives
development loans.), or those that have been authorized but never funded. The programs are
presented by agency, starting with those that generally address these issues, followed by those
that are fuel- or technology-specific. Expired programs are included
in a separate section at the end of the report, because there may be
congressional interest in reinstating these programs
(as was done for several provisions in P.L.
112-240) or establishing similar programs in the future.
The Appendix
The Appendix contains
threefour tables:
1. A summary of the programs discussed in the body of the report, listed by agency
( (Table A-1
);
);
2. A listing of programs and incentives for alternative fuels, by fuel type (Table
A2); and
A-2);
3. A listing of programs and incentives for advanced technology vehicles, by
vehicle type (Table A-3
).
); and
4. A listing of expired programs (Table A-4 ).Department of the Treasury
Motor Fuels Excise Taxes
•
Administered by: Internal Revenue Service (IRS)
•
Original authorizing legislation and legislative history: Most motor fuels taxes
(some of which were initially enacted in 1932) were included in the Highway
Revenue Act of 1956 (P.L. 84-627) primarily to support the Highway Trust Fund,
except for the tax on compressed natural gas, which was enacted in 1993
(Omnibus Budget Reconciliation Act of 1993; P.L. 103-66). Taxes that support
the Highway Trust Fund have been extended numerous times, most recently
by
P.L. 112-141, which also extended spending authority out of the Highway Trust
Fund through September 30, 2014.8
•
through September 30, 2016, by the Moving Ahead for Progress in the 21st Century Act (MAP-21; P.L. 112-141.6
Joint Committee on Taxation (JCT) estimated tax expenditure for
FY2012: N/A.
•
FY2014-FY2018: N/A.7
Scheduled termination: 4.3 cents per gallon of the gasoline/diesel fuel tax is
permanent; the rest of the motor fuels taxes expire on September 30, 2016, when
major highway-related taxes expire.
•
Description: The motor fuels taxes that were included in the Highway Revenue
Act of 1956 (P.L. 84-627) were dedicated to supporting the Highway Trust Fund,
except for the tax on compressed natural gas, which was enacted in 1993. The
federal excise tax on most of these fuels was last raised by Congress in 1993.
Taxes vary by fuel: gasoline, 18.4 cents per gallon; diesel fuel, 24.4 cents per
gallon; biodiesel, 24.4 cents per gallon; ethanol, 18.4 cents per gallon; hydrogen,
18.4 cents per gallon equivalent; liquefied petroleum gas (LPG), 18.3 cents per
gallon; compressed natural gas (CNG), 18.3 cents per gallon equivalent; liquefied
natural gas (LNG), 24.3 cents per gallon
equivalent. Electricity for electric
vehicles is untaxed. Similarly, until recently other fuels (e.g., ethanol-blended
8
Taxes dedicated to the Highway Trust Fund (HTF), authority to place those taxes into the HTF and to spend funds out
of the HTF all have expiration dates which must be extended by Congress periodically.
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Alternative Fuel and Advanced Vehicle Technology Incentives
gasoline) were subject to exemptions from, or credits against, these taxes. These
exemptions/credits effectively incentivize selected fuels/vehicles relative to
conventional options.
•
Qualified applicant/Covered entity: Manufacturers who produce applicable fuel
types.
9
•
8
Applicable fuel/technology: Gasoline, diesel, hydrogen, liquefied petroleum gas,
liquefied natural gas, compressed natural gas, ethanol and methanol (electricity is
exempt).
•
For more information: See IRS publication 510, Excise Taxes
http://www.irs.gov/
publications/p510/index.html; and Federal Highway Administration, Financing
Federal-aid Highways, Appendix L http://www.fhwa.dot.gov/reports/
financingfederalaid/appl.htm
.
•
.
Related CRS Reports: CRS Report RL30304, The Federal Excise Tax on
Gasoline Motor Fuels and the Highway Trust Fund:
A ShortCurrent Law and Legislative History
, by [author name scrubbed], , by James M. Bickley,
and CRS Report R42877, Funding and Financing Highways and Public
Transportation, by Robert S. Kirk and William J. Mallett
Transportation, by [author name scrubbed] and [author name scrubbed].Incentives for Alternative Fuel and Alternative Fuel Mixtures
(other than Liquefied Hydrogen)
•
Administered by: IRS
•
.
Original authorizing legislation and legislative history: Established by the Safe,
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users
(SAFETEA-LU; P.L. 109-59); Section 5 of the Tax Technical Corrections Act of
2007 (P.L. 110-172) modified the rules for filing excise tax refund claims for
alternative fuel mixtures and the definition of alternative fuels relating to
hydrogen and carbon resources. The Emergency Economic Stabilization Act (P.L.
110-343 §204) extended through 2009 the excise tax credit for alternative fuel
and fuel mixtures. The Tax Relief, Unemployment Insurance Reauthorization,
and Job Creation Act of 2010 (§704 of P.L. 111-312) extended through 2011 the
excise tax credits and outlay payments for alternative fuel and alternative fuel
mixtures; further extended through 2013 (retroactive for 2012) by the American
Taxpayer Relief Act of 2012 (P.L. 112-240
§412) and retroactively through 2014 by the Tax Increase Prevention Act of 2014.
JCT estimated tax expenditure for FY2014-FY2018: N/A.
Scheduled termination: December 31, 2014.
Description: The Alternative Fuel Excise Tax Credit is §412).
•
JCT estimated tax expenditure for FY2012:10 $0
•
Scheduled termination: December 31, 2013.
•
Description: This provision established a 50-cents-per gallon excise tax credit for
certain alternative fuels used as fuel in a motor vehicle, motor boat, or airplane
and, and a related provision established a 50-cents-per gallon credit for alternative fuels mixed with a traditional fuel
(gasoline, diesel, or kerosene) for use as a fuel.
9
The tax is imposed on the producer of such fuels.
For JCT tax expenditure estimates, see U.S. Congress, Joint Committee on Taxation, Estimates of Federal Tax
Expenditures for Fiscal Years 2011-2015, 112th Cong., 1st sess., January 17, 2012, JCS-1-12 (Washington: GPO, 2012),
pp. 33-35.
10
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Alternative Fuel and Advanced Vehicle Technology Incentives
•
(gasoline, diesel, or kerosene) for use as a fuel.
Qualified applicant/Covered entity: Taxpayers who supplied or mixed qualifying
fuel types.
•
Applicable fuel/technology: Liquefied petroleum gas, P Series fuels, compressed
or liquefied natural gas, any liquefied fuel derived from coal or peat, liquefied
hydrocarbons derived from biomass. (Ethanol, methanol, and biodiesel do not
qualify for the alternative fuel or alternative fuel mixture credit).
•
For more information: See IRS Publication 510 and IRS Forms 637, 720, 4136,
and 8849, on the IRS website at http://www.irs.gov
.
•
.
Related CRS Reports: CRS Report R40168, Alternative Fuels and Advanced
Technology Vehicles: Issues in Congress
, by [author name scrubbed], and CRS , by Brent D. Yacobucci, and CRS
Report R41769, Energy Tax Policy: Issues in the
112th112th Congress
, by [author name scrubbed] and [author name scrubbed]., by Molly F.
Sherlock and Margot L. Crandall-Hollick
Alternative Motor Vehicle Credit
•
Administered by: IRS
•
Original authorizing legislation and legislative history: Established by the Energy
Policy Act of 2005 (P.L. 109-58 §1341(a))
, American Recovery and Reinvestment
Act of 2009 (P.L. 111-5, Div. B, §1141-1144).
•
JCT Estimated Tax Expenditure for
FY2012FY2014: Less than $50 million
•
.9
Scheduled termination: December 31, 2014, for fuel cell vehicles; expired
December 31, 2010, or earlier for all other vehicles.
•
Description: Enacted in the Energy Policy Act of 2005, the provision includes
separate credits for four distinct types of vehicles: using fuel cells, advanced lean
burn technologies, and qualified hybrid.
•
Qualified applicant/Covered entity: Taxpayers purchasing a qualified fuel or
technology.
•
Applicable fuel/technology: Hybrid gasoline-electric; diesel; battery-electric;
alternative fuel and fuel cell vehicles; and advanced lean-burn technology
vehicles.
•
For more information: See the IRS website for the Alternative Motor Vehicle
Credit at http://www.irs.gov/businesses/corporations/article/0,,id=
202341,00.html
.
•
.
Related CRS Reports: CRS Report R40913, Renewable Energy and Energy
Efficiency Incentives: A Summary of Federal Programs
, by [author name scrubbed] and [author name scrubbed], by Lynn J. Cunningham
and Beth A. Roberts, and CRS Report R41769, Energy Tax Policy: Issues in the
112th 112th Congress
, by [author name scrubbed] and [author name scrubbed]., by Molly F. Sherlock and Margot L. Crandall-Hollick
Plug-in Electric Drive Vehicle Credit
•
Administered by: IRS
•
.
Original authorizing legislation and legislative history: Established by the Energy
Improvement and Extension Act of 2008, 26 U.S.C. 38(b)(35), 30D,
P.L. 110-343P.L. 110-
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Alternative Fuel and Advanced Vehicle Technology Incentives
343, Div. B, Title II, §205(a). The American Recovery and Reinvestment Act of
2009 (P.L. 111-5, §141) amended Section 30D effective for vehicles acquired
after December 31, 2009.
•
JCT estimated tax expenditure for FY2012: $200 million
•
.
Scheduled termination: Phased out
separateseparately for each automaker when that
automaker has sold a total of 200,000 qualified vehicles.
•
Description: Purchasers of plug-in electric vehicles may file to obtain a tax credit
of up to $7,500 per vehicle, depending on battery capacity. The vehicle must be
acquired for use or lease and not for resale. Additionally, the original use of the
vehicle must commence with the taxpayer and the vehicle must be used
predominantly in the United States. For purposes of the 30D credit, a vehicle is
not considered acquired prior to the time when title to the vehicle passes to the
taxpayer under state law.
•
Qualified applicant/Covered entity: Purchasers of qualified vehicles.
•
Applicable fuel/technology: Plug-in electric vehicles.
•
For more information: See the IRS website at http://www.irs.gov/businesses/
article/0,,id=214841,00.html and The U.S. Department of Energy
’'s Alternative
Fuels & Advanced Vehicles Data Center website at http://www.afdc.energy.gov/
afdc/laws/law/US/409
.
•
.
Related CRS Reports: CRS Report
R41154, The U.S. Motor Vehicle Industry: A
Review of Recent Domestic and International Developments, by Bill Canis and
Brent D. Yacobucci, and CRS Report R41769,
Energy Tax Policy: Issues in the 112th Congress, by [author name scrubbed] and [author name scrubbed]Alternative Fuel Refueling Property CreditAdministered by: IRS.
Original authorizing legislation and legislative history: Established by the Energy Energy Tax Policy: Issues in the
112th Congress, by Molly F. Sherlock and Margot L. Crandall-Hollick
Plug-in Electric Vehicle Credit
•
Administered by: IRS
•
Original authorizing legislation and legislative history: American Recovery and
Reinvestment Act, P.L. 111-5, §1142; extended through 2013 (retroactive for
2012) by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §403).
•
JCT estimated tax expenditure for FY2012: Less than $50 million
•
Scheduled termination: For Plug-in Electric Vehicles (IRC 30 and 30D) vehicles
must have been acquired after February 17, 2009, and before January 1, 2014.
•
Description: Internal Revenue Code Section 30 and 30D provide a tax credit for
qualified plug-in electric vehicles. The credit is equal to 10% of the cost of a
qualified plug-in electric vehicle and limited to $2,500. Qualified vehicles
include low-speed vehicles or vehicles that have two or three wheels. The vehicle
must have been acquired for use or lease and not for resale. The original use of
the vehicle must commence with the taxpayer and the vehicle must be used
predominantly in the United States.
•
Qualified applicant/Covered entity: Taxpayers purchasing qualifying vehicles.
•
Applicable fuel/technology: Two- or three-wheeled plug-in electric vehicles or
certain low-speed vehicles.
Congressional Research Service
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Alternative Fuel and Advanced Vehicle Technology Incentives
•
For more information: See the IRS website at http://www.irs.gov/businesses/
article/0,,id=214841,00.html and http://www.irs.gov/irb/2009-30_IRB/ar07.html.
•
Related CRS Reports: CRS Report R41154, The U.S. Motor Vehicle Industry: A
Review of Recent Domestic and International Developments, by Bill Canis and
Brent D. Yacobucci, and CRS Report R41769, Energy Tax Policy: Issues in the
112th Congress, by Molly F. Sherlock and Margot L. Crandall-Hollick
Conversion Kits
•
Administered by: IRS
•
Original authorizing legislation and legislative history: American Recovery and
Reinvestment Act ( P.L. 111-5, §1143)
•
JCT estimated tax expenditure for FY2012: $0
•
Scheduled termination: Expired December 31, 2011.
•
Description: The credit was equal to 10% of the cost of converting a vehicle to a
qualified plug-in electric drive motor vehicle and placed in service after February
17, 2009. The maximum amount of the credit was $4,000. The credit does not
apply to conversions made after December 31, 2011. A taxpayer was able to
claim this credit even if the taxpayer claimed a hybrid vehicle credit for the same
vehicle in an earlier year.
•
Qualified applicant/Covered entity: Taxpayers who purchased the applicable
technology.
•
Applicable fuel/technology: Qualified plug-in electric vehicle kits.
•
For more information: See the IRS website at http://www.irs.gov/newsroom/
article/0,,id=206871,00.html/.
•
Related CRS Reports: CRS Report R41154, The U.S. Motor Vehicle Industry: A
Review of Recent Domestic and International Developments, by Bill Canis and
Brent D. Yacobucci, and CRS Report R41769, Energy Tax Policy: Issues in the
112th Congress, by Molly F. Sherlock and Margot L. Crandall-Hollick
Alternative Fuel Refueling Property Credit
•
Administered by: IRS
•
Original authorizing legislation and legislative history: Established by the Energy
Policy Act of 2005 ( P.L. 109-58), Title XIII, §1342(a), extended by the American
Recovery and Reinvestment Act (P.L. 111-5) and Tax Relief, Unemployment
Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312
). ).
Amended by: P.L. 109-135, Title IV, §402(k), 412(d) and P.L. 110-172, §6(b);
extended through 2013 (retroactive for 2012) by the American Taxpayer Relief
Act of 2012 (P.L. 112-240 §402).
•
JCT estimated tax expenditure for
FY2012FY2014: Less than $50 million
•
.
Scheduled termination: December 31, 2014, for hydrogen refueling property;
December 31, 2013, for all other fuels.
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Alternative Fuel and Advanced Vehicle Technology Incentives
•
Description: Consumers who install qualified residential non-hydrogen fueling
equipment receive a 30% tax credit of up to $1,000; businesses receive a credit
up to $30,000. Special rules in place for 2009 and 2010 increased the credit rate
to 50% for non-hydrogen property. Credit limits were also temporarily increased
to $2,000 for non-business property, $50,000 for business property. The credit
rate remained at 30% for hydrogen property in 2009 and 2010, but the maximum
credit for businesses was increased to $200,000.
•
Qualified applicant/Covered entity: Consumers or businesses who install
qualifying equipment/property.
•
Applicable fuel/technology: Natural gas, liquefied petroleum gas, hydrogen,
electricity, E85, or diesel fuel blends containing a minimum of 20% biodiesel.
•
For more information: See IRS Form 8911 at http://www.irs.gov/pub/irs-pdf/
f8911.pdf
.
•
.
Related CRS Reports: CRS Report R40168,
Alternative Fuels and Advanced Alternative Fuels and Advanced
Technology Vehicles: Issues in Congress, by Brent D. Yacobucci, and CRS
Report R41769, Energy Tax Policy: Issues in the 112th Congress, by Molly F.
Sherlock and Margot L. Crandall-Hollick
Volumetric Ethanol Excise Tax Credit
•
Administered by: IRS
•
Original authorizing legislation and legislative history: Established in 2005 by
the American Jobs Creation Act of 2004, §301 (P.L. 108-357); modified by the
Food, Conservation, and Energy Act of 2008, §15331 (P.L. 110-246); further
amended by the Energy Improvement and Extension Act of 2008 (P.L. 110-343,
Division B), §203; extended by the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010 (P.L. 111-312), §708.
•
JCT estimated tax expenditure for FY2012: Foregone revenue of approximately
$6 billion.11
•
Scheduled termination: Expired December 31, 2011.
•
Description: Gasoline suppliers who blend ethanol with gasoline were eligible for
a tax credit of 45 cents per gallon of ethanol. This credit replaced a long-standing
partial tax exemption for ethanol-blended gasoline.
•
Qualified applicant/Covered entity: Blenders of gasohol (i.e., gasoline suppliers
and marketers).
•
Applicable fuel/technology: Ethanol and other alcohol fuels.
•
For more information: see IRS Publication 510, Chapter 2: Fuel Tax Credits and
Refunds at http://www.irs.gov/publications/p510/ch02.html; or DOE’s web page
for Volumetric Ethanol Excise Tax Credit (VEETC) at
http://www.afdc.energy.gov/afdc/laws/law/US/399.
11
Because of the nature of the credit, the actual tax expenditure is $0, although tax receipts are reduced by
approximately $6 billion.
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Alternative Fuel and Advanced Vehicle Technology Incentives
•
Related CRS Reports: CRS Report R41227, Energy Tax Policy: Historical
Perspectives on and Current Status of Energy Tax Expenditures, by Molly F.
Sherlock, and CRS Report R41769, Energy Tax Policy: Issues in the 112th
Congress, by Molly F. Sherlock and Margot L. Crandall-Hollick
Small Ethanol Producer Credit
•
Administered by: IRS
•
Original authorizing legislation and legislative history: Established by the
Omnibus Budget Reconciliation Act of 1990, §11502 (P.L. 101-508); extended
by the American Jobs Creation Act of 2004, §301 (P.L. 108-357); expanded by
the Energy Policy Act of 2005, §1347 (P.L. 109-58); amended by the Energy
Improvement and Extension Act of 2008 (P.L. 110-343, Division B), §203;
extended by the Tax Relief, Unemployment Insurance Reauthorization, and Job
Creation Act of 2010 (P.L. 111-312), §708.
•
JCT estimated tax expenditure for FY2012: $100 million.
•
Scheduled termination: Expired December 31, 2011.
•
Description: The small ethanol producer credit was valued at 10 cents per gallon
of ethanol produced through the end of 2011. The credit was claimed on the first
15 million gallons of ethanol produced by a small producer in a given year.
•
Qualified applicant/Covered entity: Any ethanol producer with production
capacity below 60 million gallons per year.
•
Applicable fuel/technology: Ethanol.
•
For more information: see IRS Publication 510, Chapter 2: Fuel Tax Credits and
Refunds http://www.irs.gov/publications/p510/ch02.html; and the Alternative
Fuels and Advanced Vehicles Data Center’s (AFDC’s) web page for the Small
Ethanol Producer Credit at http://www.afdc.energy.gov/afdc/laws/law/US/352.
•
Related CRS Reports: CRS Report R40168, Alternative Fuels and Advanced
Technology Vehicles: Issues in Congress
, by [author name scrubbed], and , by Brent D. Yacobucci, and CRS
Report R41769, Energy Tax Policy: Issues in the 112th Congress, by Molly F.
Sherlock and Margot L. Crandall-Hollick
Biodiesel Tax Credit
•
Administered by: IRS
•
Original authorizing legislation and legislative history: Established in 2005 by
the American Jobs Creation Act of 2004, §302 (P.L. 108-357); extended by the
Energy Policy Act of 2005, §1344 (P.L. 109-58); amended by the Energy
Improvement and Extension Act of 2008 (P.L. 110-343, Division B), §202-203;
extended by the Tax Relief, Unemployment Insurance Reauthorization, and Job
Creation Act of 2010 (P.L. 111-312), §701; extended through 2013 (retroactive
for 2012) by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §405).
•
JCT estimated tax expenditure for FY2012: $0
•
Scheduled termination: December 31, 2013.
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Alternative Fuel and Advanced Vehicle Technology Incentives
•
Description: Biodiesel producers (or producers of diesel/biodiesel blends) may
claim a per-gallon tax credit through the end of 2013. The credit is valued at
$1.00 per gallon. Before amendment by P.L. 110-343, the credit was valued at
$1.00 per gallon of “agri-biodiesel” (biodiesel produced from virgin agricultural
products such as soybean oil or animal fats), or 50 cents per gallon of biodiesel
produced from previously used agricultural products (e.g., recycled fryer grease).
The tax credit expired at the end of 2009 and was not extended until the passage
of P.L. 111-312, which retroactively applied the extension to fuel produced in
2010. The tax credit also expired at the end of 2011 and was extended through
2013 by P.L. 112-240, which retroactively applied the extension to fuel produced
in 2012.
•
Qualified applicant/Covered entity: Biodiesel producers and blenders.
•
Applicable fuel/technology: Biodiesel.
•
For more information: see IRS Publication 510, Chapter 2: Fuel Tax Credits and
Refunds at http://www.irs.gov/publications/p510/ch02.html; and the Alternative
Fuels and Advanced Vehicles Data Center’s (AFDC’s) web page for the Biodiesel
Mixture Excise Tax Credit at http://www.afdc.energy.gov/afdc/laws/law/US/395.
•
Related CRS Reports: CRS Report R41631, The Market for Biomass-Based
Diesel Fuel in the Renewable Fuel Standard (RFS), by Brent D. Yacobucci, and
CRS Report R41769,
Energy Tax Policy: Issues in the 112th Congress, by [author name scrubbed] and [author name scrubbed].Department of Energy
Advanced Technology Vehicles Manufacturing Loan ProgramAdministered by: Loan Programs Office (LPO).
Original authorizing legislation and legislative history: Authorized by the Energy Energy Tax Policy: Issues in the 112th Congress, by Molly
F. Sherlock and Margot L. Crandall-Hollick
Small Agri-Biodiesel Producer Credit
•
Administered by: IRS
•
Original authorizing legislation and legislative history: Established in 2005 by
the Energy Policy Act of 2005, §1345 (P.L. 109-58); amended by the Energy
Improvement and Extension Act of 2008 (P.L. 110-343, Division B), §202-203;
extended by the Tax Relief, Unemployment Insurance Reauthorization, and Job
Creation Act of 2010 (P.L. 111-312), §701; extended through 2013 (retroactive
for 2012) by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §405).
•
JCT estimated tax expenditure for FY2012: $0
•
Scheduled termination: December 31, 2013.
•
Description: The small agri-biodiesel producer credit is valued at 10 cents per
gallon of “agri-biodiesel” (see Biodiesel Tax Credit, above) produced. The credit
may be claimed on the first 15 million gallons of ethanol produced by a small
producer in a given year through the end of 2013. The tax credit expired at the
end of 2009 and was not extended until the passage of P.L. 111-312, which
retroactively applied the extension to fuel produced in 2010. The credit also
expired at the end of 2011 and was extended through 2013 by P.L. 112-240,
which retroactively applied the extension to fuel produced in 2012.
•
Qualified applicant/Covered entity: Any agri-biodiesel producers with production
capacity less than 60 million gallons per year.
•
Applicable fuel/technology: Biodiesel.
Congressional Research Service
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Alternative Fuel and Advanced Vehicle Technology Incentives
•
For more information: see IRS Publication 510, Chapter 2: Fuel Tax Credits and
Refunds at http://www.irs.gov/publications/p510/ch02.html; and the Alternative
Fuels and Advanced Vehicles Data Center’s (AFDC’s) web page for the Biodiesel
Mixture Excise Tax Credit at http://www.afdc.energy.gov/afdc/laws/law/US/342.
•
Related CRS Reports: CRS Report R41631, The Market for Biomass-Based
Diesel Fuel in the Renewable Fuel Standard (RFS), by Brent D. Yacobucci, and
CRS Report R41769, Energy Tax Policy: Issues in the 112th Congress, by Molly
F. Sherlock and Margot L. Crandall-Hollick
Renewable Diesel Tax Credit
•
Administered by: IRS
•
Original authorizing legislation and legislative history: Established in 2005 by
the Energy Policy Act of 2005 (P.L. 109-58), §1346 ; amended by the Energy
Improvement and Extension Act of 2008 (P.L. 110-343, Division B), §202-203;
extended by the Tax Relief, Unemployment Insurance Reauthorization, and Job
Creation Act of 2010 (P.L. 111-312), §701; extended through 2013 (retroactive
for 2012) by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §405).
•
JCT estimated tax expenditure for FY2012: $0
•
Scheduled termination: December 31, 2013.
•
Description: Producers of biomass-based diesel fuel (or producers of
diesel/renewable biodiesel blends) may claim a $1.00 per gallon tax credit
through the end of 2013. Renewable diesel is similar to biodiesel, but it is
produced through different processes and thus was ineligible for the (above)
biodiesel credits. The tax credit expired at the end of 2009 and was not extended
until the passage of P.L. 111-312, which retroactively applied the extension to
fuel produced in 2010. The credit also expired at the end of 2011 and was
extended through 2013 by P.L. 112-240, which retroactively applied the
extension to fuel produced in 2012.
•
Qualified applicant/Covered entity: Renewable diesel producers and blenders.
•
Applicable fuel/technology: Renewable diesel.
•
For more information: see IRS Publication 510, Chapter 2: Fuel Tax Credits and
Refunds at http://www.irs.gov/publications/p510/ch02.html; and the Alternative
Fuels and Advanced Vehicles Data Center’s (AFDC’s) web page for the Biodiesel
Mixture Excise Tax Credit at http://www.afdc.energy.gov/afdc/laws/law/US/342.
•
Related CRS Reports: CRS Report R40168, Alternative Fuels and Advanced
Technology Vehicles: Issues in Congress, by Brent D. Yacobucci; CRS Report
R41631, The Market for Biomass-Based Diesel Fuel in the Renewable Fuel
Standard (RFS), by Brent D. Yacobucci; and CRS Report R41769, Energy Tax
Policy: Issues in the 112th Congress, by Molly F. Sherlock and Margot L.
Crandall-Hollick
Credit for Production of Cellulosic and Algae-Based Biofuel
•
Administered by: IRS
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Alternative Fuel and Advanced Vehicle Technology Incentives
•
Original authorizing legislation and legislative history: Established on January 1,
2009, by the Food, Conservation, and Energy Act of 2008, §15321 (P.L. 110246); amended by the Health Care and Education Reconciliation Act of 2010
(P.L. 111-152), §1408; amended by the Small Business Jobs Act of 2010 (P.L.
111-240), §2121; amended and extended through the end of 2013 by the
American Taxpayer Relief Act of 2012 (P.L. 112-240 §404).
•
JCT estimated tax expenditure for FY2012: $0
•
Scheduled termination: December 31, 2013.
•
Description: Producers of cellulosic biofuel may claim a tax credit of $1.01 per
gallon. For cellulosic ethanol producers, the value of the production tax credit is
reduced by the value of the volumetric ethanol excise tax credit and the small
ethanol producer credit—the credit is currently valued at $1.01 cents per gallon
(the offsetting tax credits have expired). P.L. 112-240 amended the credit to
include non-cellulosic fuel produced from algae feedstocks.
•
The credit applies to fuel produced after December 31, 2008.
•
Qualified applicant/Covered entity: Cellulosic biofuel producers and algae-based
biofuel producers.
•
Applicable fuel/technology: Cellulosic biofuels and algae-based biofuels.
•
For more information: see the Alternative Fuels and Advanced Vehicles Data
Center’s (AFDC’s) web page for the Cellulosic Biofuel Producer Tax Credit at
http://www.afdc.energy.gov/afdc/laws/law/US/413; and IRS Publication 510 and
IRS Forms 637 and 6478, which are available via the IRS website.
•
Related CRS Reports: CRS Report RL34738, Cellulosic Biofuels: Analysis of
Policy Issues for Congress, by Kelsi Bracmort et al.; CRS Report R41460,
Cellulosic Ethanol: Feedstocks, Conversion Technologies, Economics, and
Policy Options, by Randy Schnepf; CRS Report R42122, Algae’s Potential as a
Transportation Biofuel, by Kelsi Bracmort; and CRS Report R41769, Energy Tax
Policy: Issues in the 112th Congress, by Molly F. Sherlock and Margot L.
Crandall-Hollick
Special Depreciation Allowance for Cellulosic and Algae-Based
Biofuel Plant Property
•
Administered by: IRS
•
Original authorizing legislation and legislative history: Established in 2006 by
the Tax Relief and Health Care Act of 2006 (P.L. 109-432), §209; amended by
the Energy Improvement and Extension Act of 2008 (P.L. 110-343, Division B),
§201; modified by the Tax Relief, Unemployment Insurance Reauthorization, and
Job Creation Act of 2010 (P.L. 111-312), §401; amended and extended through
the end of 2013 by the American Taxpayer Relief Act of 2012 (P.L. 112-240
§410).
•
JCT estimated tax expenditure for FY2012: $0
•
Scheduled termination: December 31, 2013.
Congressional Research Service
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Alternative Fuel and Advanced Vehicle Technology Incentives
•
Description: A taxpayer may take a depreciation deduction of 50% of the
adjusted basis of a new cellulosic or algae-based biofuel plant in the year it is put
in service. Any portion of the cost financed through tax-exempt bonds is
exempted from the depreciation allowance. Before amendment by P.L. 110-343
the accelerated depreciation applied only to cellulosic ethanol plants that break
down cellulose through enzymatic processes—the amended provision applies to
all cellulosic biofuel plants. Before amendment by P.L. 112-240 the provision did
not apply to algae-based biofuel plants: the incentive for algae-based plants
applies to property placed in service in 2013.
•
Qualified applicant/Covered entity: Any cellulosic biofuel plant acquired after
December 20, 2006, and placed in service before January 1, 2014, and any algaebased biofuel plant placed in service in 2013. Any plant that had a binding
contract for acquisition before December 20, 2006, does not qualify.
•
Applicable fuel/technology: Cellulosic and algae-based biofuels
•
For more information: See Senate Finance Committee, Summary of HouseSenate Agreement on Tax, Trade, Health, and Other Provisions, December 7,
2006, at http://www.finance.senate.gov/newsroom/ranking/release/?id=
97221a88-8b93-4000-b51c-5b03bc06e6fb.
•
Related CRS Reports: CRS Report RL34738, Cellulosic Biofuels: Analysis of
Policy Issues for Congress, by Kelsi Bracmort et al.; CRS Report R42122,
Algae’s Potential as a Transportation Biofuel, by Kelsi Bracmort; and CRS
Report R41769, Energy Tax Policy: Issues in the 112th Congress, by Molly F.
Sherlock and Margot L. Crandall-Hollick
Department of Energy
Advanced Technology Vehicle Manufacturing Loan Program
•
Administered by: Loan Programs Office (LPO)
•
Original authorizing legislation and legislative history: Authorized by the Energy
Independence and Security Act of 2007 §136 (P.L. 110-140), funded by the
Consolidated Security, Disaster Assistance, and Continuing Appropriations Act
,
(P.L. 110-329
).
Annual Funding: $4 million for FY2015).
•
FY2012 appropriated funds: $6 million (for program administration)
•
.
Scheduled termination: Facilities funded must be placed in service by the end of
2020.
•
Description: Advanced Technology
VehicleVehicles Manufacturing (ATVM) was
established in 2007 to help automakers meet mandated vehicle fuel economy
standards and to encourage domestic production of more fuel-efficient cars and
light trucks. It provides up to $25 billion in revolving loans to qualified
automakers for investment in their manufacturing operations. In FY2008, $7.51
billion was appropriated for the direct loans—$7.5 billion for the loan subsidies
(available until expended) and $10 million for administration. Although
appropriations are provided annually for administration, Congress only approved
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Alternative Fuel and Advanced Vehicle Technology Incentives
the program loan subsidy authority one time. Currently, loans have been made to
five companies, using $8.4 billion of the $25 billion loan authority.
•
Qualified applicant/Covered entity: an automotive manufacturer satisfying
specified fuel economy requirements or a manufacturer of qualifying
components. To be financially eligible for an ATVM loan, an applicant must be
financially viable without the receipt of additional federal funding for the
proposed project.
•
Applicable fuel/technology: No limitations on specific technologies; rather, limits
are stipulated for vehicle emissions and fuel consumption.
•
For more information: DOE website, https://lpo.energy.gov/?page_id=43
.
•
.
Related CRS Reports: CRS Report R42064, The Advanced Technology Vehicles
Manufacturing (ATVM) Loan Program: Status and Issues
, by [author name scrubbed] and [author name scrubbed], by Brent D. Yacobucci
and Bill Canis; and CRS Report R40168, Alternative Fuels and Advanced
Technology Vehicles: Issues in Congress
, by [author name scrubbed]. by Brent D. Yacobucci
Vehicle Technologies Program
•
Administered by: Office of Energy Efficiency and Renewable Energy (EERE)
•
.
Original authorizing legislation and legislative history: Department of Energy
Organization Act of 1977 (P.L. 95-91); Energy Policy Act of 1992 (EPACT; P.L.
102-486); Energy Policy Act of 2005 (EPACT 2005; P.L. 109-58); Energy
Independence and Security Act of 2007 (EISA; P.L. 110-140); American
Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5
).
Annual Funding: $280 million for FY2015—of that $103.7).
•
FY2012 appropriated funds: $329 million—of that $118 million for Batteries and
Electric Drive Technology
•
programs.
Scheduled termination: None.
•
Description: Through research and development, VTP supports partnerships with
other public and private organizations that will enhance energy efficiency and
productivity, bring clean and affordable technologies to market, and enhance
advanced technology vehicle choices for consumers. VTP supports, and works
through, two major government-industry endeavors: the US DRIVE Partnership
and the
21st21st century Truck Partnership.
•
Qualified applicant/Covered entity: universities, vehicle and engine
manufacturers, material suppliers, nonprofit technology organizations, energy
suppliers, and national laboratories.
•
Applicable fuel/technology: Advanced batteries, power electronics and electric
motors, advanced combustion, lightweight materials, vehicle-to-grid interaction,
and fuel cell and hydrogen technologies.
•
For more information: See EERE
’'s Vehicle Technology Program website at
http://www1.eere.energy.gov/vehiclesandfuels; and Vehicle Technologies
Program Factsheet at http://www1.eere.energy.gov/vehiclesandfuels/pdfs/
vehicles_fs.pdf.
Congressional Research Service
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Alternative Fuel and Advanced Vehicle Technology Incentives
•
vehicles_fs.pdf.
Related CRS Reports: CRS Report R42064, The Advanced Technology Vehicles
Manufacturing (ATVM) Loan Program: Status and Issues
, by [author name scrubbed] and [author name scrubbed]., by Brent D. Yacobucci
and Bill Canis
Biomass and Biorefinery Systems Program
•
Administered by: EERE
•
.
Original authorizing legislation and legislative history: Federal Nonnuclear
Energy Research and Development Act of 1974 (P.L. 93-577); Energy Policy and
Conservation Act of 1975 (EPCA; P.L. 94-163); Energy Conservation and
Production Act of 1976 (ECPA; P.L. 94-385); Department of Energy
Organization Act of 1977 (P.L. 95-91); Energy Tax Act (P.L. 95-618); National
Energy Conservation Policy Act of 1978 (NECPA; P.L. 95-619); Powerplant and
Industrial Fuel Use Act of 1978 (P.L. 95-620); Energy Security Act of 1980 (P.L.
96-294); National Appliance Energy Conservation Act of 1987 (P.L. 100-12
); );
Federal Energy Management Improvement Act of 1988 (P.L. 100-615
); );
Renewable Energy and Energy Efficiency Technology Competitiveness Act of
1989 (P.L. 101-218); Clean Air Act Amendments of 1990 (P.L. 101-549); Solar,
Wind, Waste, and Geothermal Power Production Incentives Act of 1990 (P.L.
101-575); Energy Policy Act of 1992 (EPACT; P.L. 102-486); Biomass Research
and Development Act of 2000 (Title III of Agricultural Risk Protection Act of
2000; P.L. 106-224); Farm Security and Rural Investment Act of 2002 (P.L.
107171107-171); Healthy Forest Restoration Act of 2003 (P.L. 108-148); Energy Policy Act
of 2005 (EPACT 2005; P.L. 109-58); Energy Independence and Security Act of
2007 (EISA; P.L. 110-140); The Food, Conservation, and Energy Act of 2008
( (P.L. 110-234); American Recovery and Reinvestment Act of 2009 (ARRA; P.L.
111-5
).
Annual Funding: $225 million for FY2015.
).
•
FY2012 appropriated funds: $199 million
•
Scheduled termination: None.
•
Description: The Biomass Program primarily focuses on research, development,
demonstration, and deployment (RDD&D) to ensure that cellulosic ethanol is
commercially viable by 2012 and that biobased aviation fuel, diesel fuel, and
gasoline are price competitive by 2017. However, other non-transportation
applications for biomass and bioenergy systems are also studied under this
program.
•
Qualified applicant/Covered entity: universities and businesses.
•
Applicable fuel/technology: Biofuels.
•
For more information: See http://www1.eere.energy.gov/biomass/
.
•
.
Related CRS Reports: CRS Report R41985, Renewable Energy Programs and
the Farm Bill: Status and Issues
, by [author name scrubbed]., by Randy Schnepf
Hydrogen and Fuel Cell Technologies Program
•
Administered by: EERE
Congressional Research Service
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Alternative Fuel and Advanced Vehicle Technology Incentives
•
Administered by: EERE.
Original authorizing legislation and legislative history: Federal Energy
Administration Act of 1974 (P.L. 93-275); Federal Nonnuclear Energy Research
and Development Act of 1974 (P.L. 93-577); Energy Policy and Conservation Act
of 1975 (EPCA; P.L. 94-163); Electric and Hybrid Vehicle Research,
Development and Demonstration Act (P.L. 94-413); Department of Energy
Organization Act of 1977 (P.L. 95-91); Automotive Propulsion Research and
Development Act of 1978 (Title III of Department of Energy Act of
1978Civilian1978-Civilian Applications; P.L. 95-238); Methane Transportation Research,
Development and Demonstration Act of 1980 (P.L. 96-512); Energy Security Act
of 1980 (P.L. 96-294); Alternative Motor Fuels Act of 1988 (P.L. 100-494); Spark
M. Matsunaga Hydrogen Research, Development, and Demonstration Act of
1990 (P.L. 101-566); Energy Policy Act of 1992 (EPACT; P.L. 102-486
); );
Hydrogen Future Act of 1996 (P.L. 104-271); Energy Policy Act of 2005 (EPACT
2005; P.L. 109-58); Energy Independence and Security Act of 2007 (EISA; P.L.
110-140); American Recovery and Reinvestment Act of 2009 (ARRA;
P.L. 111-5).
Annual Funding: $97 million for FY2015.
P.L. 1115).
•
FY2012 appropriated funds: $104 million
•
Scheduled termination: None.
•
Description: This program works with industry, national laboratories,
universities, government agencies, and other partners to overcome barriers to the
use of hydrogen and fuel cells. It includes a research and development (R&D)
effort focused on advancing the performance and reducing the cost of these
technologies. R&D applies to both transportation and stationary applications.
•
Qualified applicant/Covered entity: Federal government; national laboratories;
colleges and universities; and for-profit organizations.
•
Applicable fuel/technology: Hydrogen, fuel cells.
•
For more information: See EERE
’'s Hydrogen and Fuel Cell Technologies
website at http://www1.eere.energy.gov/hydrogenandfuelcells/
.
•
.
Related CRS Reports: CRS Report R40168, Alternative Fuels and Advanced
Technology Vehicles: Issues in Congress
, by [author name scrubbed]. , by Brent D. Yacobucci
Clean Cities Program
•
Administered by: EERE and sponsored by the Vehicle Technologies Program.
•
Original authorizing legislation and legislative history: Established by the
Alternative Motor Fuels Act of 1988 (P.L. 100-494), and amended by the Energy
Policy Act of 1992 (P.L. 102-486
).
Annual Funding: $24 million for FY2015.
).
•
FY2012 appropriated funds: Approximately $30 million
•
Scheduled termination: None.
•
Description: Initially started in 1993 as a DOE program to promote alternative
fuel vehicles among the states, it is now a broader program to reduce petroleum
consumption in transportation, with 100 Clean Cities coalitions that focus on
deployment of alternative and renewable fuels, idle-reduction measures, fuel
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Alternative Fuel and Advanced Vehicle Technology Incentives
economy improvements, and emerging transportation technologies. Clean Cities
provides technical, informational, and financial assistance to communities.
•
Qualified applicant/Covered entity: Businesses, fuel providers, vehicle fleets,
state and local government agencies, and community organizations, led by nearly
100 Vehicle Technologies Program Clean Cities coordinators.
•
Applicable fuel/technology: Electricity, natural gas, propane, bio-methane,
ethanol, biodiesel, hydrogen.
•
For more information: See the DOE Clean Cities website at
http://www1.eere.energy.gov/cleancities/
.
•
.
Related CRS Reports: N/A
.Department of Transportation
Corporate Average Fuel Economy Program Alternative Fuel Vehicle
Credits
•
CreditsAdministered by: National Highway Traffic Safety Administration (NHTSA)
•
Original authorizing legislation and legislative history: Corporate Average Fuel
Economy (
CAFÉCAFE) program established in the Energy Policy and Conservation
Act (EPCA) of 1975 (P.L. 94-163); alternative fuels incentives established in the
Alternative Motor Fuels Act (P.L. 100-494); amended multiple times, most
recently by the Energy Independence and Security Act of 2007, §109 (P.L.
110140110-140), to extend the expiration date through model year 2019 for dual fueled
vehicles.
•
FY2012 appropriated funds: N/A
•
vehicles.
Annual Funding: N/A
Scheduled Termination: No expiration for dedicated vehicles; after model year
2019 for dual fueled vehicles.
•
Description: Automakers that sell passenger cars and light trucks in the United
States must comply with federal CAFE standards. Those standards set fuel
economy targets that automakers must meet, averaged across their car and light
truck fleets. Those targets vary by vehicle class and size. To promote the
production and sale of alternative fuel vehicles and provide flexibility in
compliance, automakers may accrue CAFE credits by selling alternative fuel
vehicles. For dedicated vehicles (i.e., vehicles that run solely on alternative fuel)
credits are unlimited. For dual fueled vehicles (i.e., that may run on conventional
or alternative fuel) credits are limited: The maximum fuel economy increase
allowed through the use of dual fueled vehicle credits is 1.2 miles per gallon
through model year (MY) 2014. After 2014 the credits are phased down and
completely eliminated after MY 2019.
•
Covered entity: Automakers that produce vehicles for sale in the United States
•
Applicable fuel/technology: Incentives apply to vehicles capable of operating on
methanol (at least 85%), ethanol (at least 85%), natural gas, liquefied petroleum
Congressional Research Service
19
Alternative Fuel and Advanced Vehicle Technology Incentives
gas, hydrogen, coal-derived liquid fuels, biologically-derived fuels, and
electricity.
•
For more information: See NHTSA
’'s CAFE website at http://www.nhtsa.gov/
fuel-economy
•
.
Related CRS Reports: CRS Report R42721, Automobile and Truck Fuel
Economy (CAFE) and Greenhouse Gas Standards
, by [author name scrubbed], [author name scrubbed], and [author name scrubbed], by Brent D. Yacobucci, Bill
Canis, and Richard K. Lattanzio
Congestion Mitigation and Air Quality Improvement Program
•
Administered by: Federal Highway Administration (FHWA) and Federal Transit
Administration (FTA)
•
.
Original authorizing legislation and legislative history: Established by the
Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 (P.L.
102240102-240); reauthorized multiple times, most recently by the Safe, Accountable,
Flexible, and Efficient Transportation Equity Act: A Legacy for Users
(SAFETEA-LU) of 2005 (P.L. 109-59); extended multiple times, most recently
by the Moving Ahead for Progress in the 21st Century Act (MAP-21, P.L. 112141).
•
FY2012 appropriated funds (estimated): $1.35 billion
•
Scheduled Termination: September 30, 2014.
•
by the Highway and Transportation Funding Act of 2014 (P.L. 113-159).
Annual Funding: $1.3 billion for FY2014; 1.35 billion enacted for FY2015.
Scheduled Termination: Extended through May 31, 2015.
Description: Congestion Mitigation and Air Quality Improvement (CMAQ)
provides funds to states for transportation projects designed to reduce traffic
congestion and improve air quality, particularly in areas of the country that do not
attain National Ambient Air Quality Standards. In particular, it authorizes funding
for programs and projects intended to reduce carbon monoxide, particulate
matter, and ozone. CMAQ funds are apportioned in accordance with a formula
based largely on a state
’'s population and pollution reduction needs.
•
Qualified applicant/Covered entity: State departments of transportation and
metropolitan planning organizations (MPOs).
•
Applicable fuel/technology: Any transportation project or technology that can
lead to reductions in congestion or help improve air quality.
•
For more information: See FHWA
’'s CMAQ website at http://www.fhwa.dot.gov/
environment/air_quality/cmaq/
•
.
Related CRS Reports: CRS Report R42445, Surface Transportation
Reauthorization Legislation in the
112th112th Congress: MAP-21, H.R. 7, and H.R.
4348—Major Provisions, coordinated by
Robert S. Kirk[author name scrubbed]; and CRS Report
R41512, Surface Transportation Program Reauthorization Issues for the
112th
Congress, coordinated by Robert S. Kirk
112th Congress, coordinated by [author name scrubbed].Clean Fuels Grant Program
•
Administered by: Federal Transit Administration (FTA)
Congressional Research Service
20
Alternative Fuel and Advanced Vehicle Technology Incentives
•
.
Original authorizing legislation and legislative history: Established by the
Surface Transportation and Uniform Relocation Assistance Act of 1987 (P.L.
100-17) §313; reauthorized and amended multiple times,
was most recently
repealed by MAP-21.
Annual Funding: $40 million for FY2013; $25 million for FY2014; $3 million enacted for FY2015.10
Scheduled termination: Once all unobligated funds are spent.
by the
Moving Ahead for Progress in the 21st Century Act (MAP-21, P.L. 112-141).
•
FY2012 appropriated funds: $51.5 million
•
Scheduled termination: September 30, 2014.
•
Description: The program provides grants for the purchase of alternative fuel and
advanced technology transit buses. Under conventional bus grants, FTA will fund
up to 80% of the cost of a bus; under the Clean Fuels Grant Program, FTA funds
90% of the incremental cost of a
“"clean fuel
”" bus. The incremental cost is the
difference between the cost of the clean fuel bus and a comparable conventional
bus.
•
bus.
Qualified applicant/Covered entity: Tribes, states, state departments of
transportation, and metropolitan planning organizations.
•
Applicable fuel/technology: buses run on compressed natural gas, liquefied
natural gas, biodiesel, battery electric, ethanol, methanol, fuel cells, and clean
diesel (clean diesel projects limited to 25% of total funding).
•
For more information: See FTA, Clean Fuels Grant Program website at
http://www.fta.dot.gov/grants/13094_3560.html
.
•
.
Related CRS Reports: CRS Report R42445, Surface Transportation
Reauthorization Legislation in the
112th112th Congress: MAP-21, H.R. 7, and H.R.
4348—Major Provisions, coordinated by
Robert S. Kirk
[author name scrubbed].Environmental Protection Agency
National Clean Diesel Campaign
•
Administered by: Office of Transportation and Air Quality (OTAQ)
•
.
Original authorizing legislation and legislative history: Established in 2005 by
the Energy Policy Act of 2005 (P.L. 109-58), §§791-797; amended in 2008 by
P.L. 110-255, §3; and amended in 2011 by the Diesel Emissions Reduction Act of
2010 (P.L. 111-364
), §2.
Annual Funding: $30 million for FY2015.
), §2.
•
FY2012 appropriated funds: $30 million
•
Scheduled termination: September 30, 2016.
•
Description: EPA
’'s National Clean Diesel Campaign (NCDC) promotes clean air
strategies by working with manufacturers, fleet operators, air quality
professionals, environmental and community organizations, and state and local
officials to reduce diesel emissions. States are allocated funds for their clean
diesel programs through the Diesel Emission Reduction Act (DERA).
•
Qualified applicant/Covered entity: Manufacturers, fleet operators, air quality
professionals, environmental and community organizations, and state and local
governments.
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21
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•
governments.
Applicable fuel/technology: Technologies that significantly reduce emissions
(EPA maintains a list of verified retrofit technologies and emerging technologies
at http://www.epa.gov/cleandiesel/verification/verif-list.htm
).
).
•
For more information: See EPA
’'s National Clean Diesel Campaign website at
http://www.epa.gov/cleandiesel/
.
•
.
Related CRS Reports: CRS Report R42520, Environmental Protection Agency
(EPA)
: Appropriations for FY2013
, coordinated by Robert Esworthy
: Debate During the 112th Congress, coordinated by [author name scrubbed].Renewable Fuel Standard
•
Administered by: Office of Transportation and Air Quality (OTAQ)
•
.
Original authorizing legislation and legislative history: Established in 2005 by
the Energy Policy Act of 2005, §1501 (P.L. 109-58); expanded by the Energy
Independence and Security Act of 2007, §202 (P.L. 110-140
)
•
FY2012 appropriated funds: N/A
•
).
Annual Funding: N/A.
Scheduled termination: None.
•
Description: The Energy Policy Act of 2005 established a renewable fuel
standard (RFS) for automotive fuels. The RFS was expanded by the Energy
Independence and Security Act of 2007. The RFS requires the use of renewable
fuels (including ethanol and biodiesel) in transportation fuel. In 2011, fuel
suppliers were required to include 13.95 billion gallons of renewable fuels in the
national transportation fuel supply; this requirement increases annually to 36
billion gallons in 2022. The expanded RFS also specifically mandates the use of
“ "advanced biofuels
”"—fuels produced from non-corn feedstocks and with 50%
lower lifecycle greenhouse gas emissions than petroleum fuel—starting in 2009.
Of the 36 billion gallons required in 2022, at least 21 billion gallons must be
advanced biofuels. There are also specific quotas for cellulosic biofuels and for
biomass-based diesel fuel. On May 1, 2007, EPA issued a final rule on the
original RFS program detailing compliance standards for fuel suppliers, as well
as a system to trade renewable fuel credits between suppliers. On March 26,
2010, EPA issued final rules for the expanded program (RFS2), including
lifecycle analysis methods necessary to categorize fuels as advanced biofuels,
and new rules for credit verification and trading. While this program is not a
direct subsidy for the construction of biofuels plants, the guaranteed market
created by the RFS is expected to stimulate growth of the biofuels industry and to
raise prices above where they would have been in the absence of the mandate.
•
Covered entity: Gasoline and diesel fuel suppliers—generally refiners, but other
entities may also be covered.
•
Applicable fuel: All biofuels (conventional ethanol, biodiesel, renewable diesel,
cellulosic biofuels, advanced biofuels).
•
For more information: EPA website, Renewable Fuel Standard (RFS)
http://www.epa.gov/otaq/fuels/renewablefuels/index.htm
.
•
.
Related CRS Reports: CRS Report R40155, Renewable Fuel Standard (RFS):
Overview and Issues
, by [author name scrubbed] and [author name scrubbed]; CRS Report R41106, The Renewable Fuel Standard (RFS): Cellulosic Biofuels, by [author name scrubbed]; and CRS Report R41631, , by Randy Schnepf and Brent D. Yacobucci; CRS Report
Congressional Research Service
22
Alternative Fuel and Advanced Vehicle Technology Incentives
R41106, Meeting the Renewable Fuel Standard (RFS) Mandate for Cellulosic
Biofuels: Questions and Answers, by Kelsi Bracmort; and CRS Report R41631,
The Market for Biomass-Based Diesel Fuel in the Renewable Fuel Standard
(RFS)
, by [author name scrubbed].Department of Agriculture11
Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program (formerly the Biorefinery Assistance Program)Administered by: Rural Development.
Original authorizing legislation and legislative history: Title IX of the Farm Security and Rural Investment Act of 2002 (FSRIA, P.L. 107-171) as amended by Title IX, Section 9001 of the Food, Conservation, and Energy Act of 2008 (P.L. 110-246) creating new Section 9003 under FSIRA.
Mandatory: Under the 2014 farm bill, mandatory Commodity Credit Corporation (CCC) funding12 of $100 million in FY2014 and $50 million each for FY2015 and FY2016 (to remain available until expended) was authorized for loan guarantees. Thus, there is no new baseline funding after FY2016. Funding for grants is eliminated. Also, P.L. 113-79 directs USDA to ensure diversity in types of projects approved, and it caps the funds used for loan guarantees to promote biobased product manufacturing at 15% of the total available mandatory funds.
Discretionary funds of $75 million annually are authorized to be appropriated for FY2014-FY2018. For FY2009-FY2013, $150 million was authorized to be appropriated annually. No discretionary funding has been appropriated for this program through FY2015.
Scheduled termination: Funding authorized through 2018.
Description: The purpose is to assist in the development of new and emerging technologies for the development of advanced biofuels, so as to increase the energy independence of the United States; promote resource conservation, public health, and the environment; diversify markets for agricultural and forestry products and agriculture waste material; and create jobs and enhance the economic development of the rural economy. Loan guarantees are made to fund the development, construction, and retrofitting of commercial-scale biorefineries using eligible technology. The maximum loan guarantee is $250 million.
Qualified applicant: Individuals, tribal entities, state government entities, local government entities, corporations, farm cooperatives, farmer cooperative organizations, associations of agricultural producers, national laboratories, institutions of higher education, rural electric cooperatives, public power entities, and consortia of any of the previous entities.
Qualified Technologies: Technologies being adopted in a viable commercial-scale operation of a biorefinery that produces an advanced biofuel; and technologies that have been demonstrated to have technical and economic potential for commercial application in a biorefinery that produces an advanced biofuel.
For more information: See the USDA program website; CFDA program number 10.865; CRS Report R43416, Energy Provisions in the 2014 Farm Bill (P.L. 113-79), by [author name scrubbed], and, by Brent D. Yacobucci
Department of Agriculture12
Biorefinery Assistance
•
Administered by: Rural Business-Cooperative Service (RBS)
•
Original authorizing legislation and legislative history: Established by the Food,
Conservation, and Energy Act of 2008, §9001 (P.L. 110-246); extended through
FY2013 by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §701(f)).
•
FY2012 appropriated funds: Mandatory funding of $74 million in FY2009 and
$245 million in FY2010 was authorized for loan guarantees; no discretionary
funding has been appropriated through FY2012
•
Scheduled termination: September 30, 2013.
•
Description: Grants to biorefineries that use renewable biomass to reduce or
eliminate fossil fuel use.
•
Qualified applicant: Biorefineries in existence at the date of enactment.
•
For more information: See RBS website at http://www.rurdev.usda.gov/rbs/busp/
baplg9003.htm.
•
Related CRS Reports: CRS Report R41985, Renewable Energy Programs and
the Farm Bill: Status and Issues
, by [author name scrubbed].Repowering Assistance ProgramAdministered by: Rural Development.
Original authorizing legislation and legislative history: Title IX, Section 9003 of the Farm Security and Rural Investment Act of 2002 (FSIRA, P.L. 107-171) as amended by Title IX, Section 9001 of the Food, , by Randy Schnepf
Repowering Assistance
•
Administered by: RBS
•
Original authorizing legislation and legislative history: Established by the Food,
Conservation, and Energy Act of 2008
, §9001 (P.L. 110-246); extended through
FY2013 by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §701(f)).
•
FY2012 appropriated funds: Discretionary funding of $15 million was
appropriated only in FY2010
•
Scheduled termination: September 30, 2013.
•
Description: Grants to biorefineries that use renewable biomass to reduce or
eliminate fossil fuel use. RBS issued a Notice of Funding Availability June 12,
2009, at http://www.rurdev.usda.gov/rbs/busp/9004%20FR%20NOFA.pdf.
•
Qualified applicant: Biorefineries in existence at the date of enactment.
12
For program details, see CRS Report R41985, Renewable Energy Programs and the Farm Bill: Status and Issues, by
Randy Schnepf.
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•
For more information: See the RBS website at http://www.rurdev.usda.gov/
BCP_RepoweringAssistance.html.
•
Related CRS Reports: (P.L. 110-246), creating new Section 9004 under FSIRA.
Mandatory: Under the 2014 farm bill, mandatory CCC funding of $12 million for FY2014 was authorized, to remain available until expended (i.e., no new baseline funding after FY2014). For FY2015, Congress reduced available funds by $8 million through the FY2015 agricultural appropriations act, P.L. 113-235. Under the agricultural appropriations act for FY2013 (P.L. 113-6), Congress directed that funds available for this program be reduced by $28 million. Under the 2008 farm bill (P.L. 113-79) mandatory funding of $35 million for FY2009 was authorized to remain available until expended.
Discretionary: The 2014 farm bill authorized discretionary funding of $10 million annually to be appropriated for FY2014-FY2018. Discretionary funding of $15 million annually for FY2009-FY2013 was authorized to be appropriated under the 2008 farm bill and the ATRA extension.
Scheduled termination: September 30, 2018.
Description: The Repowering Assistance Program (RAP) makes payments to eligible biorefineries to encourage the use of renewable biomass as a replacement for fossil fuels used to provide heat for processing or power in the operation of these eligible biorefineries. Not more than 5% of the funds shall be made available to eligible producers with a refining capacity exceeding 150 million gallons of advanced biofuel per year.
Qualified applicant: Eligible biorefinery. The biorefinery must have been in existence on or before June 18, 2008.
Qualified Technologies: Renewable Biomass.
For more information: See program number 10.866 on the CFDA website and the USDA program website; CRS Report R43416, Energy Provisions in the 2014 Farm Bill (P.L. 113-79), by [author name scrubbed], and CRS Report R41985, Renewable Energy Programs and
the Farm Bill: Status and Issues
, by [author name scrubbed]., by Randy Schnepf
Bioenergy Program for Advanced Biofuels
•
Administered by:
RBS
•
Rural Development.
Original authorizing legislation and legislative history:
Established by the Food,
Food, Conservation, and Energy Act of 2008
, §9001 (P.L. 110-246).
•
FY2012 appropriated funds: No discretionary funding has been appropriated
through FY2012; mandatory funding for FY2012 of $65 million
•
Scheduled termination: September 30, 2013; extended through FY2013 by the
American Taxpayer Relief Act of 2012 (P.L. 112-240 §701(f)).
•
Description: Provides payments to producers to support and expand production
of advanced biofuels refined from sources other than corn kernal starch. RBS
issued a Notice of Contract Proposal June 12, 2009, at
http://www.rurdev.usda.gov/rbs/busp/NOCP%20FR%209005.pdf.
•
Qualified applicant: Producers of advanced biofuels.
•
For more information: See RBS website at http://www.rurdev.usda.gov/rbs/busp/
9005Biofuels.htm.
•
Related CRS Reports: (P.L. 110-234), Title IX, Section 9001, Subsection 9005.
Mandatory: The 2014 farm bill (P.L. 113-79) authorized mandatory CCC funding of $15 million annually for FY2014-FY2018 to remain available until expended. Congress then lowered funding authority for FY2014 by $8 million through the Consolidated Appropriations Act of 2014 (P.L. 113-76). The 2008 farm bill (P.L. 110-246) authorized mandatory CCC funding of $55 million for FY2009; $55 million for FY2010; $85 million for FY2011; and $105 million for FY2012 to remain available until expended. P.L. 112-55 limited mandatory spending to $65 million for FY2012. With the expiration of mandatory funding, the program effectively ceased to operate after FY2012. It subsequently was reauthorized in the 2014 farm bill (P.L. 113-79).
Discretionary: Discretionary funding of $20 million annually for FY2014-FY2018 was authorized to be appropriated under the 2014 farm bill, whereas under the 2008 farm bill $25 million annually was authorized to be appropriated for FY2009-FY2013, however, no discretionary funding has been appropriated for the Bioenergy Program for Advanced Biofuels FY2015.
Scheduled termination: Mandatory funding authorized through FY2018.
Description: To support and ensure an expanding production of advanced biofuels by providing payments to eligible advanced biofuel producers.
Qualified applicant: Producers of advanced biofuels.
Qualified technologies: Payments will be made to eligible advanced biofuel producers for the production of fuel derived from renewable biomass, other than corn kernel starch, to include biofuel derived from cellulose, hemicellulose, or lignin; biofuel derived from sugar and starch (other than ethanol derived from corn kernel starch); biofuel derived from waste material, including crop residue, other vegetative waste material, animal waste, food waste, and yard waste; diesel-equivalent fuel derived from renewable biomass, including vegetable oil and animal fat; biogas (including landfill gas and sewage waste treatment gas) produced through the conversion of organic matter from renewable biomass; butanol or other alcohols produced through the conversion of organic matter from renewable biomass; and other fuel derived from cellulosic biomass
For more information: See program number 10.867 on the CFDA website (https://www.cfda.gov/programs/10.867); USDA program website (http://www.rurdev.usda.gov/rbs/busp/9005Biofuels.htm); CRS Report R43416, Energy Provisions in the 2014 Farm Bill (P.L. 113-79), by [author name scrubbed], and CRS Report R41985, Renewable Energy Programs and
the Farm Bill: Status and Issues
, by [author name scrubbed]Biomass Crop Assistance Program (BCAP; §9011)
, by Randy Schnepf
Biomass Crop Assistance Program
•
Administered by: Farm Service Agency (FSA)
•
Original authorizing legislation and legislative history:
Established by the Food,
Title IX of the Farm Security and Rural Investment Act of 2002 (FSRIA; P.L. 107-171) as amended by Title IX, Section 9001 of the Food, Conservation, and Energy Act of 2008
, §9001 (P.L. 110-246); extended through
FY2013 by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §701(f)).
•
FY2012 appropriated funds: Mandatory Commodity Credit Corporation (CCC)
funds of such sums as necessary are made available for each of FY2008-FY2012.
In FY2012, Biomass Crop Assistance Program (BCAP) mandatory spending was
limited to $17 million
•
Scheduled termination: September 30, 2013.
•
Description: Two separate payment programs for the establishment and supply of
advanced biofuel feedstocks: (1) Establishment and annual payments, including a
one-time payment of up to 75% of the cost of establishment for perennial crops,
and annual payments for up to five or 15 years depending on the type of crop;
and (2) dollar-for-dollar matching payments for collection, harvesting, storage,
and transportation (CHST) of biomass to qualified biofuel production facilities
(as well as bioenergy or biobased products), up to $45 per ton.
Congressional Research Service
24
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•
Qualified applicant: Individuals who establish and produce qualified perennial
biomass feedstock crops; individuals who deliver eligible biomass to a qualified
facility.
•
(P.L. 110-246), creating new Section 9011 under FSIRA.
Mandatory: The 2014 farm bill authorized mandatory CCC funding of $25 million annually from FY2014 through FY2018. For FY2015, the Consolidated and Further Appropriations Act, 2015 (P.L. 113-235) limits funding to not more than $23 million. Under the 2008 farm bill, P.L. 110-246, Congress provided a mandatory funding authorization of "such sums as necessary" (SSAN) for FY2009-FY2012. The Supplemental Appropriations Act of 2010 (P.L. 111-212) limited mandatory spending on BCAP by allowing no more than $552 million in FY2010 and $432 million in FY2011. The Department of Defense and Full-Year Continuing Appropriations Act, 2011 (P.L. 112-10), further reduced BCAP funding for FY2011 to $112 million. The agriculture appropriations act for FY2012 (P.L. 112-55) limited BCAP mandatory spending to $17 million. No new mandatory funding was included for BCAP under ATRA.
Discretionary: Under ATRA discretionary funding of $20 million was authorized to be appropriated for FY2013, but Congress appropriated no discretionary funds. No other discretionary funding has been authorized.
For more on these changes in mandatory program spending, see CRS Report R41245, Reductions in Mandatory Agriculture Program Spending, by [author name scrubbed] and [author name scrubbed]. For more information on the 2010 supplemental, see CRS Report R41255, FY2010 Supplemental Appropriations for Agriculture, by [author name scrubbed].
Scheduled termination: Funding authorized through FY2018
Description: BCAP provides assistance to support the production of eligible biomass crops on land within approved BCAP project areas. In exchange for growing eligible crops, the FSA will provide annual payments through 5- to 15-year contracts. Under these contracts up to 50% of establishment costs may also be provided. FSA will also provide matching payments to eligible material owners at a rate of $1 for each $1 per dry ton paid by a qualified biomass conversion facility. Payments may not exceed $20 per ton for a two-year period, and matching payments are available for no more than two years per participant.
Qualified applicant: Eligible biomass material owners and eligible biomass producers.
Qualified technologies: Eligible material for a matching payment is renewable biomass, as defined by the 2008 farm bill, with several important exclusions including harvested grains, fiber, or other commodities eligible to receive payments under the Commodity Title (Title I) of the 2008 farm bill (the residues of these commodities, however, are eligible and may qualify for payment); animal waste and animal waste by-products including fats, oils, greases, and manure; food waste, and yard waste; and algae. Eligible crops include renewable biomass, with the exception of crops eligible to receive a payment under Title I of the 2008 farm bill and plants that are invasive or noxious, or have the potential to become invasive or noxious. Algae is as an eligible crop, but not an eligible material; thus, algae may qualify for annual and/or establishment payments but not matching payments.
For more information:
See the USDA BCAP website (See FSA website at http://www.fsa.usda.gov/FSA/
webapp?area=home&subject=ener&topic=bcap
.
•
Related CRS Reports:); CRS Report R43416, Energy Provisions in the 2014 Farm Bill (P.L. 113-79), by [author name scrubbed]; CRS Report R41985, Renewable Energy Programs and
the Farm Bill: Status and Issues
, by [author name scrubbed]; and CRS Report R41296, Biomass Crop Assistance Program (BCAP): Status and Issues, by [author name scrubbed].Rural Energy for America Program (REAP) Grants and LoansAdministered by: Rural Development.
, by Randy Schnepf
Rural Energy for America Program
•
Administered by: RBS
•
Original authorizing legislation and legislative history:
Established in 2002 by
Title IX, Section 9006 of the Farm Security and Rural Investment Act of 2002 (
FSIRA, P.L. 107-171
), §9007;
amended in 2008 by) as amended by Title IX, Section 9001 of the Food Conservation, and Energy Act of 2008 (
P.L. 110-246), creating new Section 9007 under FSIRAP.L. 110246), §9007. The new
§Section 9007 converted the federal Renewable Energy Systems
and Energy Efficiency Improvements Program into the Rural Energy for America
Program (REAP). Extended through FY2013 by the American Taxpayer Relief
Act of 2012 (P.L. 112-240 §701(f)).
•
FY2012 appropriated funds: $25 million ($22 million in mandatory funds are
available and $3 million in discretionary funds).
•
Scheduled termination: September 30, 2013.
•
Description: Provides grants and loans for a variety of rural energy projects,
including efficiency improvements and renewable energy projects. Although
REAP is not exclusively aimed at biofuels projects, the program could be a
significant source of loan funds for such projects.
•
Qualified applicant/Covered entity: Rural small businesses and agricultural
producers.
•
Applicable fuel/technology: Biofuels (see description above), among other
technologies.
•
For more information: See the program website at http://www.rurdev.usda.gov/
rbs/farmbill/.
•
Related CRS Reports: CRS Report R41985, Renewable Energy Programs and
the Farm Bill: Status and Issues, by Randy Schnepf
Biomass Research and Development
•
Administered by: National Institute of Food and Agriculture (NIFA)
•
Original authorizing legislation and legislative history: Established by the
Program (REAP).
Mandatory: Under the 2014 farm bill, mandatory CCC funds of $50 million are authorized for FY2014 and each fiscal year thereafter (thus REAP's mandatory funding authority does not expire with the 2014 farm bill). Mandatory funds are to remain available until expended. Under the 2008 farm bill, Congress authorized mandatory funds of $55million in FY2009, $60 million in FY2010, and $70 million each in FY2011 and FY2012. The FY2012 Agriculture Appropriations Act (P.L. 112-55) limited REAP mandatory spending to $22 million. The 112th Congress was unable to complete action on any of the regular FY2013 appropriations bills during 2012. Instead, Congress passed continuing resolutions for the first half of FY2013 (P.L. 112-175)13 and then again for the second half of FY2013 (P.L. 113-6).14 The REAP program was the only Title IX bioenergy program that received an appropriation of discretionary funds ($3.4 million) in the FY2013 continuing resolutions.
Discretionary: Under the 2014 farm bill, discretionary funding of $20 million annually was authorized to be appropriated for FY2014-FY2018. Under the 2008 farm bill, $25 million was authorized to be appropriated annually for FY2009-FY2013. Actual discretionary appropriations have been $5 million in FY2009, $39.3 million in FY2010, $5 million in FY2011, $3.4 million in FY2012 and in FY2013; $3.5 million in FY2014; and $1.35 million in FY2015.
Scheduled termination: Authorized with no expiration.
Description: REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. The 2014 farm bill added new funding and a three-tiered application process, with separate application processes for grants and loan guarantees for RES and EEI projects based on the project cost. It also excluded the use of REAP funds for installing retail energy dispensing equipment, such as blender pumps.
Qualified applicant/Covered entity: Rural small business and agricultural producers.
Applicable fuel/technology: Biofuels (see description above), among other technologies.
For more information: See the program website and CRS Report R43416, Energy Provisions in the 2014 Farm Bill (P.L. 113-79), by [author name scrubbed].Biomass Research and Development (BRDI)Administered by: National Institute of Food and Agriculture (NIFA).
Original authorizing legislation and legislative history: Established by the Biomass Research and Development Act of 2000, §307 (P.L. 106-224); program
extended and mandatory appropriations provided by the Farm Security and Rural
Investment Act of 2002, §9008 (P.L. 107-171); program extended and funding
authorization expanded by the Energy Policy Act of 2005, §941 (P.L. 109-58
); );
significantly modified by the Food, Conservation and Energy Act of 2008, §9008
Congressional Research Service
25
Alternative Fuel and Advanced Vehicle Technology Incentives
( (P.L. 110-246); extended through FY2013 by the American Taxpayer Relief Act
of 2012 (P.L. 112-240
§701(f)).
The 2014 farm bill authorizes mandatory funding (to remain available until expended) of $3 million for four fiscal years—FY2014-FY2017—that is, baseline funding authority expires after FY2017.
Discretionary funding of $20 million is authorized to be appropriated annually for FY2014-FY2018. However, no discretionary funding has ever been appropriated for BRDI through FY2013.
Under ATRA, no new mandatory funding was included for BRDI; however, discretionary funding of $35 million was authorized to be appropriated for FY2013.
Scheduled termination: Authorized through FY2018.
§701(f)).
•
FY2012 appropriated funds: $40 million in mandatory funding
•
Scheduled termination: September 30, 2013.
•
Description: Grants are provided for biomass research, development, and
demonstration projects. Eligible projects include ethanol and biodiesel
demonstration plants.
•
Qualified applicant: Wide range of possible applicants.
•
For more information: See http://www.brdisolutions.com/default.aspx.
•
Related CRS Reports: CRS Report R41985, Renewable Energy Programs and
the Farm Bill: Status and Issues, by Randy Schnepf
U.S. Customs and Border Protection—Import Duty
on Fuel Ethanol
•
Administered by: U.S. Customs and Border Protection
•
Original authorizing legislation and legislative history: Established in 1980 by
For more information: See CRS Report R43416, Energy Provisions in the 2014 Farm Bill (P.L. 113-79), by [author name scrubbed].Appendix. Expired Programs
Biodiesel Income Tax Credit
- Administered by: IRS
- Original authorizing legislation and legislative history: Established in 2005 by the American Jobs Creation Act of 2004, §302 (P.L. 108-357); extended by the Energy Policy Act of 2005, §1344 (P.L. 109-58); amended by the Energy Improvement and Extension Act of 2008 (P.L. 110-343, Division B), §202-203; extended by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312), §701; extended through 2013 (retroactive for 2012) by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §405).
- JCT estimated tax expenditure for FY2013-FY2017: Less than $50 million total.
- Termination Date: December 31, 2013.
- Description: Biodiesel producers (or producers of diesel/biodiesel blends) could claim a per-gallon tax credit through the end of 2013. The credit was valued at $1.00 per gallon. Before amendment by P.L. 110-343, the credit was valued at $1.00 per gallon of "agri-biodiesel" (biodiesel produced from virgin agricultural products such as soybean oil or animal fats), or 50 cents per gallon of biodiesel produced from previously used agricultural products (e.g., recycled fryer grease). The tax credit expired at the end of 2009 and was not extended until the passage of P.L. 111-312, which retroactively applied the extension to fuel produced in 2010. The tax credit also expired at the end of 2011 and was extended through 2013 by P.L. 112-240, which retroactively applied the extension to fuel produced in 2012.
- Qualified applicant/Covered entity: Biodiesel producers and blenders.
- Applicable fuel/technology: Biodiesel.
- For more information: see IRS Publication 510, Chapter 2: Fuel Tax Credits and Refunds at http://www.irs.gov/publications/p510/ch02.html; and the Alternative Fuels and Advanced Vehicles Data Center's (AFDC's) web page for the Biodiesel Mixture Excise Tax Credit at http://www.afdc.energy.gov/afdc/laws/law/US/395.
- Related CRS Reports: CRS Report R41631, The Market for Biomass-Based Diesel Fuel in the Renewable Fuel Standard (RFS), by [author name scrubbed], and CRS Report R41769, Energy Tax Policy: Issues in the 112th Congress, by [author name scrubbed] and [author name scrubbed].
Conversion Kits
Administered by: IRS.
Original authorizing legislation and legislative history: American Recovery and Reinvestment Act (P.L. 111-5, §1143).
JCT estimated tax expenditure for FY2012: $0.
Termination Date: Expired December 31, 2011.
Description: The credit was equal to 10% of the cost of converting a vehicle to a qualified plug-in electric drive motor vehicle and placed in service after February 17, 2009. The maximum amount of the credit was $4,000. The credit does not apply to conversions made after December 31, 2011. A taxpayer was able to claim this credit even if the taxpayer claimed a hybrid vehicle credit for the same vehicle in an earlier year.
Qualified applicant/Covered entity: Taxpayers who purchased the applicable technology.
Applicable fuel/technology: Qualified plug-in electric vehicle kits.
For more information: See the IRS website at http://www.irs.gov/newsroom/article/0,,id=206871,00.html/.
Related CRS Reports: CRS Report R41769, Energy Tax Policy: Issues in the 112th Congress, by [author name scrubbed] and [author name scrubbed].Credit for Production of Cellulosic and Algae-Based Biofuel
- Administered by: IRS.
- Original authorizing legislation and legislative history: Established on January 1, 2009, by the Food, Conservation, and Energy Act of 2008, §15321 (P.L. 110-246); amended by the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152), §1408; amended by the Small Business Jobs Act of 2010 (P.L. 111-240), §2121; amended and extended through the end of 2013 by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §404).
- JCT estimated tax expenditure for FY2013-FY2017: Less than $50 million total.
- Termination Date: December 31, 2013.
- Description: Producers of cellulosic biofuel could claim a tax credit of $1.01 per gallon. For cellulosic ethanol producers, the value of the production tax credit was reduced by the value of the volumetric ethanol excise tax credit and the small ethanol producer credit—the credit was last valued at $1.01 cents per gallon (the offsetting tax credits have expired). P.L. 112-240 amended the credit to include non-cellulosic fuel produced from algae feedstocks.
- The credit applied to fuel produced after December 31, 2008.
- Qualified applicant/Covered entity: Cellulosic biofuel producers and algae-based biofuel producers.
- Applicable fuel/technology: Cellulosic biofuels and algae-based biofuels.
- For more information: see the Alternative Fuels and Advanced Vehicles Data Center's (AFDC's) web page for the Cellulosic Biofuel Producer Tax Credit at http://www.afdc.energy.gov/afdc/laws/law/US/413; and IRS Publication 510 and IRS Forms 637 and 6478, which are available via the IRS website.
- Related CRS Reports: CRS Report RL34738, Cellulosic Biofuels: Analysis of Policy Issues for Congress, by [author name scrubbed] et al.; CRS Report R41460, Cellulosic Ethanol: Feedstocks, Conversion Technologies, Economics, and Policy Options, by [author name scrubbed]; CRS Report R42122, Algae's Potential as a Transportation Biofuel, by [author name scrubbed]; and CRS Report R41769, Energy Tax Policy: Issues in the 112th Congress, by [author name scrubbed] and [author name scrubbed].
Plug-in Electric Vehicle Credit
- Administered by: IRS.
- Original authorizing legislation and legislative history: American Recovery and Reinvestment Act, P.L. 111-5, §1142; extended through 2013 (retroactive for 2012) by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §403).
- JCT estimated tax expenditure for FY2015: Less than $50 million.
- Termination Date: For Plug-in Electric Vehicles (IRC 30 and 30D) vehicles must have been acquired after February 17, 2009, and before January 1, 2014.
- Description: Internal Revenue Code Section 30 and 30D provided a tax credit for qualified plug-in electric vehicles. The credit was equal to 10% of the cost of a qualified plug-in electric vehicle and limited to $2,500. Qualified vehicles included low-speed vehicles or vehicles that have two or three wheels. The vehicle must have been acquired for use or lease and not for resale. The original use of the vehicle had to commence with the taxpayer and the vehicle had to be used predominantly in the United States.
- Qualified applicant/Covered entity: Taxpayers purchasing qualifying vehicles.
- Applicable fuel/technology: Two- or three-wheeled plug-in electric vehicles or certain low-speed vehicles.
- For more information: See the IRS website at http://www.irs.gov/businesses/article/0,,id=214841,00.html and http://www.irs.gov/irb/2009-30_IRB/ar07.html.
- Related CRS Reports: CRS Report R41769, Energy Tax Policy: Issues in the 112th Congress, by [author name scrubbed] and [author name scrubbed].
Renewable Diesel Tax Credit
- Administered by: IRS.
- Original authorizing legislation and legislative history: Established in 2005 by the Energy Policy Act of 2005 (P.L. 109-58), §1346; amended by the Energy Improvement and Extension Act of 2008 (P.L. 110-343, Division B), §202-203; extended by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312), §701; extended through 2013 (retroactive for 2012) by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §405).
- JCT estimated tax expenditure for FY2013-FY2017: Less than $50 million total.
- Termination Date: December 31, 2013.
- Description: Producers of biomass-based diesel fuel (or producers of diesel/renewable biodiesel blends) could claim a $1.00 per gallon tax credit through the end of 2013. Renewable diesel is similar to biodiesel, but it is produced through different processes and thus was ineligible for the (above) biodiesel credits. The tax credit expired at the end of 2009 and was not extended until the passage of P.L. 111-312, which retroactively applied the extension to fuel produced in 2010. The credit also expired at the end of 2011 and was extended through 2013 by P.L. 112-240, which retroactively applied the extension to fuel produced in 2012.
- Qualified applicant/Covered entity: Renewable diesel producers and blenders.
- Applicable fuel/technology: Renewable diesel.
- For more information: see IRS Publication 510, Chapter 2: Fuel Tax Credits and Refunds at http://www.irs.gov/publications/p510/ch02.html; and the Alternative Fuels and Advanced Vehicles Data Center's (AFDC's) web page for the Biodiesel Mixture Excise Tax Credit at http://www.afdc.energy.gov/afdc/laws/law/US/342.
- Related CRS Reports: CRS Report R40168, Alternative Fuels and Advanced Technology Vehicles: Issues in Congress, by [author name scrubbed]; CRS Report R41631, The Market for Biomass-Based Diesel Fuel in the Renewable Fuel Standard (RFS), by [author name scrubbed]; and CRS Report R41769, Energy Tax Policy: Issues in the 112th Congress, by [author name scrubbed] and [author name scrubbed].
Small Agri-Biodiesel Producer Credit
- Administered by: IRS.
- Original authorizing legislation and legislative history: Established in 2005 by the Energy Policy Act of 2005, §1345 (P.L. 109-58); amended by the Energy Improvement and Extension Act of 2008 (P.L. 110-343, Division B), §202-203; extended by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312), §701; extended through 2013 (retroactive for 2012) by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §405).
- JCT estimated tax expenditure for FY2013-2017: Less than $50 million total.
- Termination Date: December 31, 2013.
- Description: The small agri-biodiesel producer credit was valued at 10 cents per gallon of "agri-biodiesel" (see Biodiesel Tax Credit, above) produced. The credit could be claimed on the first 15 million gallons of ethanol produced by a small producer in a given year through the end of 2013. The tax credit expired at the end of 2009 and was not extended until the passage of P.L. 111-312, which retroactively applied the extension to fuel produced in 2010. The credit also expired at the end of 2011 and was extended through 2013 by P.L. 112-240, which retroactively applied the extension to fuel produced in 2012.
- Qualified applicant/Covered entity: Any agri-biodiesel producers with production capacity less than 60 million gallons per year.
- Applicable fuel/technology: Biodiesel.
- For more information: see IRS Publication 510, Chapter 2: Fuel Tax Credits and Refunds at http://www.irs.gov/publications/p510/ch02.html; and the Alternative Fuels and Advanced Vehicles Data Center's (AFDC's) web page for the Biodiesel Mixture Excise Tax Credit at http://www.afdc.energy.gov/afdc/laws/law/US/342.
- Related CRS Reports: CRS Report R41631, The Market for Biomass-Based Diesel Fuel in the Renewable Fuel Standard (RFS), by [author name scrubbed], and CRS Report R41769, Energy Tax Policy: Issues in the 112th Congress, by [author name scrubbed] and [author name scrubbed].
Small Ethanol Producer Tax Credit
- Administered by: IRS.
- Original authorizing legislation and legislative history: Established by the Omnibus Budget Reconciliation Act of 1990, §11502 (P.L. 101-508); extended by the American Jobs Creation Act of 2004, §301 (P.L. 108-357); expanded by the Energy Policy Act of 2005, §1347 (P.L. 109-58); amended by the Energy Improvement and Extension Act of 2008 (P.L. 110-343, Division B), §203; extended by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312), §708.
- JCT estimated tax expenditure for FY2013-FY2017: Less than $50 million total.
- Termination Date: Expired December 31, 2011.
- Description: The small ethanol producer credit was valued at 10 cents per gallon of ethanol produced through the end of 2011. The credit was claimed on the first 15 million gallons of ethanol produced by a small producer in a given year.
- Qualified applicant/Covered entity: Any ethanol producer with production capacity below 60 million gallons per year.
- Applicable fuel/technology: Ethanol.
- For more information: see IRS Publication 510, Chapter 2: Fuel Tax Credits and Refunds http://www.irs.gov/publications/p510/ch02.html; and the Alternative Fuels and Advanced Vehicles Data Center's (AFDC's) web page for the Small Ethanol Producer Credit at http://www.afdc.energy.gov/afdc/laws/law/US/352.
- Related CRS Reports: CRS Report R40168, Alternative Fuels and Advanced Technology Vehicles: Issues in Congress, by [author name scrubbed], and CRS Report R41769, Energy Tax Policy: Issues in the 112th Congress, by [author name scrubbed] and [author name scrubbed].
Special Depreciation Allowance for Cellulosic and Algae-Based Biofuel Plant Property
- Administered by: IRS.
- Original authorizing legislation and legislative history: Established in 2006 by the Tax Relief and Health Care Act of 2006 (P.L. 109-432), §209; amended by the Energy Improvement and Extension Act of 2008 (P.L. 110-343, Division B), §201; modified by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312), §401; amended and extended through the end of 2013 by the American Taxpayer Relief Act of 2012 (P.L. 112-240 §410).
- JCT estimated tax expenditure for FY2013-FY2017: Less than $50 million total.
- Termination Date: December 31, 2013.
- Description: A taxpayer could take a depreciation deduction of 50% of the adjusted basis of a new cellulosic or algae-based biofuel plant in the year it is put in service. Any portion of the cost financed through tax-exempt bonds was exempted from the depreciation allowance. Before amendment by P.L. 110-343 the accelerated depreciation applied only to cellulosic ethanol plants that break down cellulose through enzymatic processes—the amended provision applied to all cellulosic biofuel plants. Before amendment by P.L. 112-240 the provision did not apply to algae-based biofuel plants: the incentive for algae-based plants applies to property placed in service in 2013.
- Qualified applicant/Covered entity: Any cellulosic biofuel plant acquired after December 20, 2006, and placed in service before January 1, 2014, and any algae-based biofuel plant placed in service in 2013. Any plant that had a binding contract for acquisition before December 20, 2006, does not qualify.
- Applicable fuel/technology: Cellulosic and algae-based biofuels.
- For more information: See Senate Finance Committee, Summary of House-Senate Agreement on Tax, Trade, Health, and Other Provisions, December 7, 2006, at http://www.finance.senate.gov/newsroom/ranking/release/?id=97221a88-8b93-4000-b51c-5b03bc06e6fb.
- Related CRS Reports: CRS Report RL34738, Cellulosic Biofuels: Analysis of Policy Issues for Congress, by [author name scrubbed] et al.; CRS Report R42122, Algae's Potential as a Transportation Biofuel, by [author name scrubbed]; and CRS Report R41769, Energy Tax Policy: Issues in the 112th Congress, by [author name scrubbed] and [author name scrubbed].
U.S. Customs and Border Protection—Import Duty on Fuel Ethanol
Administered by: U.S. Customs and Border Protection.
Original authorizing legislation and legislative history: Established in 1980 by the Omnibus Reconciliation Act of 1980 (P.L. 96-499); amended by the Tax
Reform Act of 1986, §423 (P.L. 99-514
)); extended by the Tax Relief and Health
Care Act of 2006, §302 (P.L. 109-432); further extended by the Food,
Conservation, and Energy Act of 2008, §15333 (P.L. 110-246), and the Tax
Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
( (P.L. 111-312), §708.
•
FY2012 appropriated funds: N/A
•
Scheduled termination.
Termination Date: Added duty expired December 31, 2011.
•
Description: A most-favored-nation duty of $0.54 per gallon of ethanol (for fuel
use) applied to imports into the United States from most countries through the
end of 2011; a 2.5% ad valorem tariff still applies; most ethanol from Caribbean
Basin Initiative (CBI) countries imported duty-free.
•
Covered entities: Fuel ethanol importers.
•
Applicable fuel: Ethanol (from all feedstocks).
•
For more information: See Senate Finance Committee, Summary of
HouseSenateHouse-Senate Agreement on Tax, Trade, Health, and Other Provisions, December 7,
2006, at http://www.finance.senate.gov/newsroom/ranking/release/?id=
97221a88-8b93-4000-b51c-5b03bc06e6fb
.
•
.
Related CRS Reports: CRS Report RS21930, Ethanol Imports and the Caribbean
Basin Initiative (CBI)
, by [author name scrubbed]. Volumetric Ethanol Excise Tax Credit
- Administered by: IRS.
- Original authorizing legislation and legislative history: Established in 2005 by the American Jobs Creation Act of 2004, §301 (P.L. 108-357); modified by the Food, Conservation, and Energy Act of 2008, §15331 (P.L. 110-246); further amended by the Energy Improvement and Extension Act of 2008 (P.L. 110-343, Division B), §203; extended by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312), §708.
- JCT estimated tax expenditure for FY2012: Foregone revenue of approximately $6 billion.15
- Termination Date: Expired December 31, 2011.
- Description: Gasoline suppliers who blend ethanol with gasoline were eligible for a tax credit of 45 cents per gallon of ethanol. This credit replaced a long-standing partial tax exemption for ethanol-blended gasoline.
- Qualified applicant/Covered entity: Blenders of gasohol (i.e., gasoline suppliers and marketers).
- Applicable fuel/technology: Ethanol and other alcohol fuels.
- For more information: see IRS Publication 510, Chapter 2: Fuel Tax Credits and Refunds at http://www.irs.gov/publications/p510/ch02.html; or DOE's web page for Volumetric Ethanol Excise Tax Credit (VEETC) at http://www.afdc.energy.gov/afdc/laws/law/US/399.
- Related CRS Reports: CRS Report R41227, Energy Tax Policy: Historical Perspectives on and Current Status of Energy Tax Expenditures, by [author name scrubbed], and CRS Report R41769, Energy Tax Policy: Issues in the 112th Congress, by [author name scrubbed] and [author name scrubbed].
Summary Tables
Appendix A contains four tables:
, by Brent D. Yacobucci
Congressional Research Service
26
Alternative Fuel and Advanced Vehicle Technology Incentives
Appendix. Summary Tables
This appendix contains three tables:
•
Table A-1 provides a summary of the programs discussed in the body of the
report, listed by agency;
•
Table A-2 lists programs and incentives for alternative fuels, by fuel type; and
•
Table A-3 lists programs and incentives for advanced technology vehicles, by
vehicle type.
Congressional Research Service
27
Table A-1. Federal Programs by Agency
Program
FY2012
Appropriation
or JCT
Estimated
Expenditure
Description
Expiration Date
Eligible Fuels or
Technologies
Internal Revenue Service
Motor Fuels Excise
Taxes
Most motor fuels taxes were enacted in the Highway Revenue Act of 1956
primarily to support the Highway Trust Fund, except for the tax on
compressed natural gas, which was enacted in 1993. The federal excise tax
on most of these fuels was last raised by Congress in 1993. Taxes vary by
fuel: gasoline, 18.4 cents per gallon; diesel fuel, 24.4 cents per gallon;
biodiesel, 24.4 cents per gallon; ethanol, 18.4 cents per gallon; hydrogen,
18.4 cents per gallon equivalent; liquefied petroleum gas, 18.3 cents per
gallon; compressed natural gas, 18.3 cents per gallon equivalent; liquefied
natural gas, 24.3 cents per gallon equivalent. Electricity for electric vehicles
is exempt from taxation, and exemptions for other fuels existed until
recently. Differences between tax rates effectively incentivize certain
options over others.
Incentives for
alternative fuel and
alternative fuel
mixtures (other
than liquefied
hydrogen)
This provision established a 50-cents-per gallon excise tax credit for
certain alternative fuel used as fuel in a motor vehicle, motor boat, or
airplane and a 50-cents-per gallon credit for alternative fuel mixed with a
traditional fuel (gasoline, diesel or kerosene) for use as a fuel.
$0
Alternative Motor
Vehicle Credit
This provision includes separate credits for four distinct types of vehicles:
using fuel cells, advanced lean burn technologies, qualified hybrid
technology or qualified alternative fuels technologies.
Less than $50
million
CRS-28
N/A
4.3 cents per gallon
of the gasoline/
diesel fuel tax is
permanent; the rest
of the motor fuels
taxes expire on
9/30/2016 when
many current
highway-related
taxes expire
Gasoline, diesel, liquefied
petroleum gas, liquefied
natural gas, fuels with
methanol from natural gas,
and compressed natural gas.
12/31/2013
Liquefied petroleum gas, P
Series fuels, compressed or
liquefied natural gas, liquefied
hydrogen, any liquefied fuel
derived from coal or peat,
liquefied hydrocarbons
derived from biomass. (Does
not include ethanol, methanol
or biodiesel.)
12/31/2014 for fuel
cell vehicles, expired
12/31/2010 or
earlier for all other
vehicles
Compressed natural gas,
liquefied natural gas, liquefied
petroleum gas, hydrogen, any
liquid that is at least 85%
methanol or a mixture of one
of these fuels with a
petroleum fuel.
Program
Description
FY2012
Appropriation
or JCT
Estimated
Expenditure
Expiration Date
Eligible Fuels or
Technologies
Plug-in Electric
Drive Vehicle
Credit
Purchasers of plug-in electric vehicles may file to obtain a tax credit of up
to $7,500 per vehicle, depending on battery capacity.
$200 million
The credit is phased
out when an
automaker has sold
a total of 200,000
qualified vehicles
Plug-in electric vehicles.
Plug-in Electric
Vehicle Credit
A maximum credit of $2,500 is allowed for certain types of new vehicles.
Less than $50
million
12/31/13
Two- or three-wheeled plugin electric vehicles or certain
low-speed vehicles.
Conversion Kits
A credit of up to $4,000 was allowed for purchasing a kit to convert a
vehicle to a plug-in electric drive vehicle.
Expired 12/31/11
Qualified plug-in electric
vehicle kits.
Alternative Fuel
Refueling Property
Credit
Consumers who install qualified residential non-hydrogen fueling
equipment receive a 30% tax credit of up to $1,000; businesses receive a
credit up to $30,000 (maximum credits were increased for 2009 and 2010,
except for hydrogen property). Hydrogen refueling property may receive
respective credits of up to $1,000 and $200,000.
Less than $50
million
12/31/2014 for
hydrogen refueling
property; 12/31/13
for all other fuels
Natural gas, liquefied
petroleum gas, hydrogen,
electricity, E85, or diesel fuel
blends containing a minimum
of 20% biodiesel.
Volumetric Ethanol
Excise Tax Credit
Gasoline suppliers who blend ethanol with gasoline were eligible for a tax
credit of 45 cents per gallon of ethanol.
$6 billion in
foregone tax
receipts
Expired 12/31/2011
Ethanol (and other alcohol
fuels).
Small Ethanol
Producer Credit
An ethanol producer with less than 60 million gallons per year in
production capacity could claim a credit of 10 cents per gallon on the first
15 million gallons produced each year.
$100 million
Expired 12/31/2011
Ethanol.
Biodiesel Tax
Credit
Producers of biodiesel or diesel/biodiesel blends may claim a tax credit of
$1.00 per gallon of biodiesel.
$0
12/31/2013
Biodiesel.
Small AgriBiodiesel Producer
Credit
An agri-biodiesel (produced from virgin agricultural products) producer
with less than 60 million gallons per year in production capacity may claim
a credit of 10 cents per gallon on the first 15 million gallons produced in a
year.
$0
12/31/2013
Biodiesel.
Renewable Diesel
Tax Credit
Producers of renewable diesel (similar to biodiesel, but produced through a
different process) may claim a tax credit of $1.00 per gallon of renewable
diesel.
$0
12/31/2013
Renewable diesel.
CRS-29
$0
Program
FY2012
Appropriation
or JCT
Estimated
Expenditure
Description
Expiration Date
Eligible Fuels or
Technologies
Credit for
Production of
Cellulosic and
Algae-Based Biofuel
Producers of cellulosic and algae-based biofuels may claim a tax credit of
$1.01 per gallon. For ethanol producers, the value of the production tax
credit is reduced by the value of the volumetric ethanol excise tax credit
and the small ethanol producer credit. Since both offsetting credits have
expired, the credit is currently valued at $1.01 per gallon. The credit
applies to fuel produced after December 31, 2008.
$0
12/31/2013
Cellulosic and algae-based
biofuels.
Special
Depreciation
Allowance for
Cellulosic and
Algae-Based Biofuel
Plant Property
Plants producing cellulosic and algae-based biofuels may take a 50%
depreciation allowance in the first year of operation, subject to certain
restrictions.
$0
12/31/2013
Cellulosic and algae-based
biofuels.
Department of Energy
Advanced
Technology
Vehicles
Manufacturing
(ATVM) Program
ATVM was established in 2007 to help automakers meet mandated vehicle
fuel economy standards and to encourage domestic production of more
fuel-efficient cars and light trucks. It was first funded in 2008 to provide
$25 billion in revolving loans to qualified automakers for investment in
their manufacturing operations. In FY2008, $7.51 billion was appropriated
for the direct loans—$7.5 billion for the loan subsidies (available until
expended) and $10 million for administration. Currently, loans have been
made to five companies, using $8.4 billion of the $25 billion loan authority.
$6 million (for
administration)
Facilities funded
must be placed in
service by
12/31/2020
No limitations on specific
technologies; rather, limits are
stipulated for vehicle
emissions and fuel
consumption.
Vehicle
Technologies
Program (VTP)
Through research and development, VTP supports partnerships with other
public and private organizations that will enhance energy efficiency and
productivity, bring clean and affordable technologies to market, and
enhance advanced technology vehicle choices for consumers.
$329 million—of
that $118 million
for Batteries and
Electric Drive
Technology
None
Advanced batteries, power
electronics and electric
motors, advanced
combustion, lightweight
materials, vehicle-to-grid
interaction, and fuel cell and
hydrogen technologies.
Biomass and
Biorefinery Systems
Program
The Biomass Program primarily focuses on research, development,
demonstration, and deployment (RDD&D) to ensure that cellulosic ethanol
is commercially viable by 2012 and that biobased aviation fuel, diesel fuel,
and gasoline are price competitive by 2017.
$199 million
None
Biofuels.
CRS-30
Program
FY2012
Appropriation
or JCT
Estimated
Expenditure
Description
Expiration Date
Eligible Fuels or
Technologies
Hydrogen and Fuel
Cell Technologies
Program
The DOE Hydrogen Program works with industry, national laboratories,
universities, government agencies, and other partners to overcome the
barriers to the use of hydrogen and fuel cells. It includes a research and
development (R&D) effort focused on advancing the performance and
reducing the cost of these technologies.
$104 million
None
Hydrogen, fuel cells.
Clean Cities
Program
Initially started in 1993 as a DOE program to promote alternative fuel
vehicles among the states, it is now a broader program to reduce
petroleum consumption in transportation, with 100 Clean Cities coalitions
that focus on deployment of alternative and renewable fuels, idle-reduction
measures, fuel economy improvements, and emerging transportation
technologies. Clean Cities provides technical, informational, and financial
assistance to communities.
Approximately
$30 million
None
Electricity, natural gas,
propane, bio-methane,
ethanol, biodiesel, hydrogen.
No expiration for
dedicated vehicles;
after MY 2019 for
dual fueled vehicles
Methanol (at least 85%),
ethanol (at least 85%), natural
gas, liquefied petroleum gas,
hydrogen, coal-derived liquid
fuels, biologically derived
fuels, and electricity.
Department of Transportation
Corporate Average
Fuel Economy
(CAFE) Incentives
for Alternative Fuel
Vehicles
Automakers subject to Corporate Average Fuel Economy (CAFE)
standards may accrue credits under that program for the production and
sale of alternative fuel vehicles. For dedicated vehicles (i.e., vehicles that
run solely on alternative fuel) credits are unlimited. For dual fueled vehicles
(i.e., that may run on conventional or alternative fuel) credits are limited:
The maximum fuel economy increase allowed through the use of these
credits is 1.2 miles per gallon through model year (MY) 2014. After 2014
the credits are phased down and completely eliminated after MY 2019.
Congestion
Mitigation and Air
Quality
Improvement
Program (CMAQ)
Congress directed the DOT to establish the CMAQ program to provide
funds for projects and programs that may reduce the emissions of
transportation-related pollutants that may cause an area within a state to
exceed certain air quality standards.
$1.35 billion
9/30/2014
Not limited to alternative
fuels or advanced
technologies.
Clean Fuels Grant
Program
This program provides grants to state departments of transportation and
metropolitan planning organizations (among others) to purchase “clean
fuel” transit buses. Federal Transit Administration (FTA) grants for
conventional buses cover 80% of the cost, while Clean Fuels grants cover
90% of the incremental cost of clean fuel buses over conventional buses.
Alternative fuels and advanced technologies qualify, including advanced
diesel: however, only 25% of funding may be used for advanced diesel
projects.
$51.5 million
9/30/2014
Buses powered by
compressed natural gas,
liquefied natural gas, biodiesel,
batteries, ethanol, methanol,
fuel cells, and clean diesel.
CRS-31
N/A
Program
FY2012
Appropriation
or JCT
Estimated
Expenditure
Description
Expiration Date
Eligible Fuels or
Technologies
Environmental Protection Agency
National Clean
Diesel Campaign
EPA’s National Clean Diesel Campaign (NCDC) promotes clean air
strategies by working with manufacturers, fleet operators, air quality
professionals, environmental and community organizations, and state and
local officials to reduce diesel emissions. States are allocated funds for their
clean diesel programs through the Diesel Emission Reduction Act (DERA).
$30 million
Renewable Fuel
Standard (RFS)
Mandated use of renewable fuel in gasoline and diesel fuel: 4.0 billion
gallons in 2006, increasing to 36 billion gallons in 2022. There are specific
sub-mandates for advanced biofuels (fuels other than corn-based ethanol),
cellulosic biofuels, and biomass-based diesel fuels. Greenhouse gas emission
reduction requirements apply to all advanced biofuels and to conventional
biofuels from refineries built after 2007.
N/A
9/30/2016
Primarily for technologies
which significantly reduce
emissions (EPA maintains a
list of verified retrofit
technologies and emerging
technologies at
http://www.epa.gov/
cleandiesel/).
None
Biofuels (specific
requirements for advanced
biofuels, cellulosic fuels, and
biomass-based diesel fuels).
9/30/2013
Advanced biofuels.
U.S. Department of Agriculture
Biorefinery
Assistance
CRS-32
The Biorefinery Assistance Program (BAP) assists in the development of
new and emerging technologies for advanced biofuels. BAP provides
competitive grants and loan guarantees for construction and/or retrofitting
of demonstration-scale biorefineries to demonstrate the commercial
viability of one or more processes for converting renewable biomass to
advanced biofuels. Biorefinery grants can provide for up to 30% of total
project costs. Each loan guarantee is limited to $250 million or 80% of
project cost.
No FY2012
appropriation, but
any mandatory
funding unspent
from the FY2010
allocation of $245
million remains
available in
FY2012.
Program
Description
FY2012
Appropriation
or JCT
Estimated
Expenditure
Expiration Date
Eligible Fuels or
Technologies
Repowering
Assistance
The Repowering Assistance Program (RAP) makes payments to eligible
biorefineries (those in existence on the date of enactment of the 2008 farm
bill, June 18, 2008) to encourage the use of renewable biomass as a
replacement for fossil fuels used to provide heat for processing or power
in the operation of these eligible biorefineries. Not more than 5% of the
funds shall be made available to eligible producers with a refining capacity
exceeding 150 million gallons of advanced biofuel per year.
$15 million in
FY2010 was
appropriated
through FY2012.
Any mandatory
funding unspent
from the FY2009
allocation of $35
million remains
available in
FY2012.
9/30/2013
Renewable biomass.
Bioenergy Program
for Advanced
Biofuels
To support and ensure an expanding production of advanced biofuels by
providing payments to eligible advanced biofuel producers
Mandatory
Commodity
Credit
Corporation
(CCC) funding of
$105 million for
FY2012 was
authorized to
remain available
until expended.
P.L. 112-55 limits
mandatory
spending to $65
million.
9/30/2013
Advanced biofuels.
Biomass Crop
Assistance Program
(BCAP)
The Biomass Crop Assistance Program (BCAP) provides financial assistance
to owners and operators of agricultural land and non-industrial private
forest land who wish to establish, produce, and deliver biomass feedstocks.
BCAP provides two categories of assistance:
1. establishment and annual payments, including a one-time payment of up
to 75% of the cost of establishment for perennial crops, and annual
payments (i.e., rental rates based on a set of criteria) of up to 5 years for
non-woody and 15 years for woody perennial biomass crops; and
2. matching payments, up to $45 per ton, which may be available to help
eligible material owners with collection, harvest, storage, and
transportation (CHST) of eligible material for use in a qualified biomass
conversion facility.
In the FY2012
Agriculture
appropriations
act (P.L. 112-55),
BCAP mandatory
spending was
limited to $17
million.
9/30/2013
Feedstocks for the production
of advanced biofuels.
CRS-33
Program
FY2012
Appropriation
or JCT
Estimated
Expenditure
Description
Expiration Date
Eligible Fuels or
Technologies
Rural Energy for
America Program
(REAP)
Provides grants and loans for a variety of rural energy projects, including
efficiency improvements and renewable energy projects.
$25 million ($22
million in
mandatory funds,
$3 million
discretionary)
9/30/2013
Rural energy projects broadly.
Biomass Research
and Development
Initiative (BRDI)
Provides competitive funding in the form of grants, contracts, and financial
assistance for research, development, and demonstration of technologies
and processes leading to significant commercial production of biofuels,
biobased energy innovations, development of biobased feedstocks,
biobased products, and other such related processes, including
development of cost-competitive cellulosic ethanol.
$40 million
9/30/2013
Biomass energy and biobased
products (not limited to
transportation applications).
Added duty expired
12/21/2011
Imported ethanol for fuel use.
Customs and Border Protection
Import Duty on
Fuel Ethanol
A most-favored nation duty of $0.54 per gallon of fuel ethanol applied to
imports from most countries through 2011. A 2.5% ad valorem tariff still
applies.
Source: CRS Analysis
Notes: N/A = not applicable
CRS-34
N/A
Table A-2. Federal Taxes and Incentives for Alternative Fuels
Fuel
Excise Tax
Rate (¢ per
gallon)
Production
Incentive
Incentive for Blending
and/or Fuel Use
Federal R&D
Other Programs
DOE Biomass R&D program $199 million in FY2012,a USDA
Biomass R&D - $40 million in
FY2012.b
Renewable fuel standard (RFS) mandates
biofuel use by gasoline and diesel fuel
suppliers—mandate of 15.2 billion
gallons in 2012.
Biofuels
General
Tax credit for installation of refueling
infrastructure for some biofuels.
Conventional
Ethanol
18.4
None
$0.54 per gallon [expired]
Majority of RFS met through use of
conventional (corn-based) ethanol.
Biodiesel and
Renewable Diesel
24.4
$1.00 plus $0.10 for
small producers
$1.00 per gallon (may not
claim this and the producer
credit)
Specific carve-out in RFS for biomassbased diesel—1.28 billion gallons in
2013.
Cellulosic and
Algae-Based
Biofuels
Varies
$1.01 per gallon, plus
accelerated
depreciation of plant
property
None
DOE and USDA biomass
programs focused on cellulosic
biofuel development.
Specific carve-out in RFS for cellulosic
biofuels—8.65 million gallons in 2012.
Advanced Biofuelsc
Varies
Varies
Varies
DOE Biomass Program.
USDA Farm Bill programs, including
Biorefinery Assistance, Repowering
Assistance, Bioenergy Program, Biomass
Crop Assistance Program (BCAP).
Hydrogen
18.4
None
$0.50 per gallon
DOE Hydrogen and Fuel Cell
Technologies Program—$104
million in FY2012.d
Tax credit for installation of refueling
infrastructure.
Liquefied
Petroleum Gas
(LPG)
18.3
None
$0.50 per gallon
Tax credit for installation of refueling
infrastructure.
Compressed
Natural Gas
(CNG)
18.3
None
$0.50 per gallon
Tax credit for installation of refueling
infrastructure.
Liquefied Natural
Gas (LNG)
24.3
None
$0.50 per gallon
Tax credit for installation of refueling
infrastructure.
Natural Gas
CRS-35
Source: CRS Analysis.
Notes: For more details, see Table A-1. Italics indicate expired provisions.
a.
Program not exclusively for transportation biofuels—also covers bioenergy (i.e., stationary sources) and bioproducts.
b.
Program not exclusively for transportation biofuels—also covers bioenergy (i.e., stationary sources) and bioproducts.
c.
This category generally encompasses others, including cellulosic biofuels, algae-based biofuels, and biomass-based diesel fuels.
d.
Program not exclusively focused on transportation.
CRS-36
Table A-3. Federal Incentives for Alternative Fuel and Advanced Technology Vehicles
Vehicle Technology
or Fuel Type
Manufacturing Incentive
Purchase Incentive
Federal R&D
Other Programs
$118 million in FY2012 under
DOE’s Vehicle Technologies
Program covers hybrid, battery
electric, and plug-in technologies.
National Clean Diesel Campaign
(NCDC), Clean Cities.
Electrified Vehicles
General
Hybrid
ATVM loan program generally applies.
Up to $3,400 for passenger vehicles
[expired]
Battery Electric
Credits under CAFE program; ATVM
loan program generally applies.
Up to $7,500 for passenger
vehicles;
Up to $2,500 for two- and threewheeled and low-speed vehicles;
Up to $4,000 for conversion kits
[expired]
Plug-in Hybrid
Credits under CAFE program; ATVM
loan program generally applies.
Up to $7,500 for passenger
vehicles;
Up to $2,500 for two- and threewheeled and low-speed vehicles;
Up to $4,000 for conversion kits;
[expired]
Ethanol Flexible
Fuel Vehicle (FFV)
Credits under CAFE program expire
after 2019 model year.
None
Limited
National Clean Diesel Campaign
(NCDC), Clean Cities.
Fuel Cell Vehicles
Credits under CAFE program; ATVM
loan program generally applies.
Up to $8,000 for passenger
vehicles
DOE Hydrogen and Fuel Cell
Technologies Program—$104
million in FY2012.a
National Clean Diesel Campaign
(NCDC), Clean Cities.
Natural Gas Vehicles
Compressed Natural
Gas (CNG)
Limited
Up to $4,000 for passenger vehicles
[expired]
National Clean Diesel Campaign
(NCDC), Clean Cities.
Liquefied Natural Gas
Credits under CAFE program; ATVM
Up to $4,000 for passenger vehicles
(LNG)
loan program generally applies.
[expired]
Source: CRS Analysis.
Notes: For more details, see Table A-1. Italics indicate expired provisions.
a. Program not exclusively focused on transportation.
National Clean Diesel Campaign
(NCDC), Clean Cities.
CRS-37
Credits under CAFE program; ATVM
loan program generally applies.
Alternative Fuel and Advanced Vehicle Technology Incentives
Author Contact Information
Lynn J. Cunningham
Information Research Specialist
lcunningham@crs.loc.gov, 7-8971
Bill Canis
Specialist in Industrial Organization and Business
bcanis@crs.loc.gov, 7-1568
Beth A. Roberts
Information Research Specialist
eroberts@crs.loc.gov, 7-9090
Brent D. Yacobucci
Section Research Manager
byacobucci@crs.loc.gov, 7-9662
Congressional Research Service
38
vehicle type.
Table A-4 lists programs that have expired since the last update of this report.
Table A-1. Federal Programs by Agency
Program
|
Description
|
FY2015 Appropriation or JCT Estimated Expenditure
|
Expiration Date
|
Eligible Fuels or Technologies
|
Internal Revenue Service
|
Motor Fuels Excise Taxes
|
Most motor fuels taxes were enacted in the Highway Revenue Act of 1956 primarily to support the Highway Trust Fund, except for the tax on compressed natural gas, which was enacted in 1993. The federal excise tax on most of these fuels was last raised by Congress in 1993. Taxes vary by fuel: gasoline, 18.4 cents per gallon; diesel fuel, 24.4 cents per gallon; biodiesel, 24.4 cents per gallon; ethanol, 18.4 cents per gallon; hydrogen, 18.4 cents per gallon equivalent; liquefied petroleum gas, 18.3 cents per gallon; compressed natural gas, 18.3 cents per gallon equivalent; liquefied natural gas, 24.3 cents per gallon. Electricity for electric vehicles is exempt from taxation, and exemptions for other fuels existed until recently. Differences between tax rates effectively incentivize certain options over others.
|
N/A
|
4.3 cents per gallon of the gasoline/ diesel fuel tax is permanent; the rest of the motor fuels taxes expire on 9/30/2016 when many current highway-related taxes expire
|
Gasoline, diesel, liquefied petroleum gas, liquefied natural gas, fuels with methanol from natural gas, and compressed natural gas.
|
Incentives for alternative fuel and alternative fuel mixtures (other than liquefied hydrogen)
|
The Alternative Fuel Excise Tax Credit is a 50-cents-per gallon excise tax credit for certain alternative fuel used as fuel in a motor vehicle, motor boat, or airplane; a similar provision established a 50-cents-per gallon credit for alternative fuel mixed with a traditional fuel (gasoline, diesel or kerosene) for use as a fuel.
|
N/A
|
12/31/2014
|
Liquefied petroleum gas, P Series fuels, compressed or liquefied natural gas, liquefied hydrogen, any liquefied fuel derived from coal or peat, liquefied hydrocarbons derived from biomass. (Does not include ethanol, methanol or biodiesel.)
|
Alternative Motor Vehicle Credit
|
This provision includes separate credits for four distinct types of vehicles: using fuel cells, advanced lean burn technologies, qualified hybrid technology, or qualified alternative fuels technologies.
|
Less than $50 million
|
12/31/2014 for fuel cell vehicles, expired 12/31/2010 or earlier for all other vehicles
|
Compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen, any liquid that is at least 85% methanol or a mixture of one of these fuels with a petroleum fuel.
|
Plug-in Electric Drive Vehicle Credit
|
Purchasers of plug-in electric vehicles may file to obtain a tax credit of up to $7,500 per vehicle, depending on battery capacity.
|
$200 million
|
The credit is phased out when an automaker has sold a total of 200,000 qualified vehicles
|
Plug-in electric vehicles.
|
Alternative Fuel Refueling Property Credit
|
Consumers who install qualified residential non-hydrogen fueling equipment receive a 30% tax credit of up to $1,000; businesses receive a credit up to $30,000 (maximum credits were increased for 2009 and 2010, except for hydrogen property). Hydrogen refueling property may receive respective credits of up to $1,000 and $200,000.
|
Less than $50 million
|
12/31/2014 for hydrogen refueling property; 12/31/13 for all other fuels
|
Natural gas, liquefied petroleum gas, hydrogen, electricity, E85, or diesel fuel blends containing a minimum of 20% biodiesel.
|
Biodiesel Tax Credit
|
Producers of biodiesel or diesel/biodiesel blends may claim a tax credit of $1.00 per gallon of biodiesel.
|
$0
|
12/31/2013
|
Biodiesel.
|
Small Agri-Biodiesel Producer Credit
|
An agri-biodiesel (produced from virgin agricultural products) producer with less than 60 million gallons per year in production capacity may claim a credit of 10 cents per gallon on the first 15 million gallons produced in a year.
|
$0
|
12/31/2013
|
Biodiesel.
|
Renewable Diesel Tax Credit
|
Producers of renewable diesel (similar to biodiesel, but produced through a different process) may claim a tax credit of $1.00 per gallon of renewable diesel.
|
$0
|
12/31/2013
|
Renewable diesel.
|
Credit for Production of Cellulosic and Algae-Based Biofuel
|
Producers of cellulosic and algae-based biofuels may claim a tax credit of $1.01 per gallon. For ethanol producers, the value of the production tax credit is reduced by the value of the volumetric ethanol excise tax credit and the small ethanol producer credit. Since both offsetting credits have expired, the credit is currently valued at $1.01 per gallon. The credit applies to fuel produced after December 31, 2008.
|
$0
|
12/31/2013
|
Cellulosic and algae-based biofuels.
|
Special Depreciation Allowance for Cellulosic and Algae-Based Biofuel Plant Property
|
Plants producing cellulosic and algae-based biofuels may take a 50% depreciation allowance in the first year of operation, subject to certain restrictions.
|
$0
|
12/31/2013
|
Cellulosic and algae-based biofuels.
|
Department of Energy
|
Advanced Technology Vehicles Manufacturing (ATVM) Program
|
ATVM was established in 2007 to help automakers meet mandated vehicle fuel economy standards and to encourage domestic production of more fuel-efficient cars and light trucks. It was first funded in 2008 to provide $25 billion in revolving loans to qualified automakers for investment in their manufacturing operations. In FY2008, $7.51 billion was appropriated for the direct loans—$7.5 billion for the loan subsidies (available until expended) and $10 million for administration. Currently, loans have been made to five companies, using $8.4 billion of the $25 billion loan authority.
|
$4 million (for administration)
|
Facilities funded must be placed in service by 12/31/2020
|
No limitations on specific technologies; rather, limits are stipulated for vehicle emissions and fuel consumption.
|
Vehicle Technologies Program (VTP)
|
Through research and development, VTP supports partnerships with other public and private organizations that will enhance energy efficiency and productivity, bring clean and affordable technologies to market, and enhance advanced technology vehicle choices for consumers.
|
$280 million—of that $103 million for Batteries and Electric Drive Technology
|
None
|
Advanced batteries, power electronics and electric motors, advanced combustion, lightweight materials, vehicle-to-grid interaction, and fuel cell and hydrogen technologies.
|
Biomass and Biorefinery Systems Program
|
The Biomass Program primarily focuses on research, development, demonstration, and deployment (RDD&D) to ensure that cellulosic ethanol is commercially viable by 2012 and that biobased aviation fuel, diesel fuel, and gasoline are price competitive by 2017.
$225 million
|
None
|
Biofuels.
|
Hydrogen and Fuel Cell Technologies Program
|
The DOE Hydrogen Program works with industry, national laboratories, universities, government agencies, and other partners to overcome the barriers to the use of hydrogen and fuel cells. It includes a research and development (R&D) effort focused on advancing the performance and reducing the cost of these technologies.
|
$97 million
|
None
|
Hydrogen, fuel cells.
|
Clean Cities Program
|
Initially started in 1993 as a DOE program to promote alternative fuel vehicles among the states, it is now a broader program to reduce petroleum consumption in transportation, with 100 Clean Cities coalitions that focus on deployment of alternative and renewable fuels, idle-reduction measures, fuel economy improvements, and emerging transportation technologies. Clean Cities provides technical, informational, and financial assistance to communities.
|
$24 million
|
None
|
Electricity, natural gas, propane, bio-methane, ethanol, biodiesel, hydrogen.
|
Department of Transportation
|
Corporate Average Fuel Economy (CAFE) Incentives for Alternative Fuel Vehicles
|
Automakers subject to Corporate Average Fuel Economy (CAFE) standards may accrue credits under that program for the production and sale of alternative fuel vehicles. For dedicated vehicles (i.e., vehicles that run solely on alternative fuel) credits are unlimited. For dual fueled vehicles (i.e., that may run on conventional or alternative fuel) credits are limited: The maximum fuel economy increase allowed through the use of these credits is 1.2 miles per gallon through model year (MY) 2014. After 2014 the credits are phased down and completely eliminated after MY 2019.
|
N/A
|
No expiration for dedicated vehicles; after MY 2019 for dual fueled vehicles
|
Methanol (at least 85%), ethanol (at least 85%), natural gas, liquefied petroleum gas, hydrogen, coal-derived liquid fuels, biologically derived fuels, and electricity.
|
Congestion Mitigation and Air Quality Improvement Program (CMAQ)
|
Congress directed the DOT to establish the CMAQ program to provide funds for projects and programs that may reduce the emissions of transportation-related pollutants that may cause an area within a state to exceed certain air quality standards.
|
$1.35 billion
|
7/31/2015
|
Not limited to alternative fuels or advanced technologies.
|
Clean Fuels Grant Program
|
This program provides grants to state departments of transportation and metropolitan planning organizations (among others) to purchase "clean fuel" transit buses. Federal Transit Administration (FTA) grants for conventional buses cover 80% of the cost, while Clean Fuels grants cover 90% of the incremental cost of clean fuel buses over conventional buses. Alternative fuels and advanced technologies qualify, including advanced diesel: however, only 25% of funding may be used for advanced diesel projects.
|
$3 million
|
Once all unobligated funds are spent
|
Buses powered by compressed natural gas, liquefied natural gas, biodiesel, batteries, ethanol, methanol, fuel cells, and clean diesel.
|
Environmental Protection Agency
|
National Clean Diesel Campaign
|
EPA's National Clean Diesel Campaign (NCDC) promotes clean air strategies by working with manufacturers, fleet operators, air quality professionals, environmental and community organizations, and state and local officials to reduce diesel emissions. States are allocated funds for their clean diesel programs through the Diesel Emission Reduction Act (DERA).
|
$30 million
|
9/30/2016
|
Primarily for technologies which significantly reduce emissions (EPA maintains a list of verified retrofit technologies and emerging technologies at http://www.epa.gov/cleandiesel/).
Renewable Fuel Standard (RFS)
|
Mandated use of renewable fuel in gasoline and diesel fuel: 4.0 billion gallons in 2006, increasing to 36 billion gallons in 2022. There are specific sub-mandates for advanced biofuels (fuels other than corn-based ethanol), cellulosic biofuels, and biomass-based diesel fuels. Greenhouse gas emission reduction requirements apply to all advanced biofuels and to conventional biofuels from refineries built after 2007.
|
N/A
|
None
|
Biofuels (specific requirements for advanced biofuels, cellulosic fuels, and biomass-based diesel fuels).
|
U.S. Department of Agriculture
|
Biorefinery Assistance
|
The Biorefinery Assistance Program (BAP) assists in the development of new and emerging technologies for advanced biofuels. BAP provides competitive grants and loan guarantees for construction and/or retrofitting of demonstration-scale biorefineries to demonstrate the commercial viability of one or more processes for converting renewable biomass to advanced biofuels. Biorefinery grants can provide for up to 30% of total project costs. Each loan guarantee is limited to $250 million or 80% of project cost.
|
Mandatory CCC funding of $100 million in FY2014 and $50 million each for FY2015 and FY2016 (to remain available until expended) was authorized for loan guarantees. Discretionary authorization: Discretionary funding of $75 million annually was authorized for FY2014-FY2018
|
Funding authorized through FY2016
|
Advanced biofuels.
|
Repowering Assistance
|
The Repowering Assistance Program (RAP) makes payments to eligible biorefineries (those in existence on the date of enactment of the 2008 farm bill, June 18, 2008) to encourage the use of renewable biomass as a replacement for fossil fuels used to provide heat for processing or power in the operation of these eligible biorefineries. Not more than 5% of the funds shall be made available to eligible producers with a refining capacity exceeding 150 million gallons of advanced biofuel per year.
|
Mandatory funding: Under the 2014 farm bill, mandatory CCC funding of $12 million for FY2014 was authorized, to remain available until expended
Discretionary authorization: $10 million annually for FY2014-FY2018 was authorized to be appropriated
|
Authorized through FY2018
|
Renewable biomass.
|
Bioenergy Program for Advanced Biofuels
|
To support and ensure an expanding production of advanced biofuels by providing payments to eligible advanced biofuel producers
|
$15 million for each of FY2014-FY2018 was authorized to remain available until expended
Discretionary funding of $20 million annually for FY2014-FY2018
|
Authorized through FY2018
|
Advanced biofuels
|
Biomass Crop Assistance Program (BCAP)
|
The Biomass Crop Assistance Program (BCAP) provides financial assistance to owners and operators of agricultural land and non-industrial private forest land who wish to establish, produce, and deliver biomass feedstocks. BCAP provides two categories of assistance:1. establishment and annual payments, including a one-time payment of up to 75% of the cost of establishment for perennial crops, and annual payments (i.e., rental rates based on a set of criteria) of up to 5 years for non-woody and 15 years for woody perennial biomass crops; and2. matching payments, up to $45 per ton, which may be available to help eligible material owners with collection, harvest, storage, and transportation (CHST) of eligible material for use in a qualified biomass conversion facility.
$15 million for each of FY2014-FY2018 was authorized to remain available until expended
Discretionary funding of $20 million annually for FY2014-FY2018
|
Authorized through FY2018
|
Feedstocks for the production of advanced biofuels.
|
Rural Energy for America Program (REAP)
|
Provides grants and loans for a variety of rural energy projects, including efficiency improvements and renewable energy projects.
|
Mandatory CCC funds of $50 million are authorized for FY2014 and each fiscal year thereafter. $20 million annually was authorized to be appropriated for FY2014-FY2018
|
Authorized through 2018
|
Rural energy projects broadly.
|
Biomass Research and Development Initiative (BRDI)
|
Provides competitive funding in the form of grants, contracts, and financial assistance for research, development, and demonstration of technologies and processes leading to significant commercial production of biofuels, biobased energy innovations, development of biobased feedstocks, biobased products, and other such related processes, including development of cost-competitive cellulosic ethanol.
|
Mandatory funding (to remain available until expended) of $3 million for four fiscal years—FY2014-FY2017—that is, baseline funding authority expires after FY2017
Discretionary funding of $20 million is authorized to be appropriated annually for FY2014-FY2018
|
Authorized through 2018
|
Biomass energy and biobased products (not limited to transportation applications).
|
Source: CRS analysis.
Note: N/A = not applicable.
Table A-2. Federal Taxes and Incentives for Alternative Fuels
Fuel
|
Excise Tax Rate (¢ per gallon)
|
Production Incentive
|
Incentive for Blending and/or Fuel Use
|
Federal R&D
|
Other Programs
|
Biofuels
|
General
|
DOE Biomass R&D program—$232 million in FY2015,a smaller amounts in USDA Biomass R&Db
Renewable fuel standard (RFS) mandates biofuel use by gasoline and diesel fuel suppliers.
Tax credit for installation of refueling infrastructure for some biofuels.
|
Conventional Ethanol
|
18.4
|
None
|
$0.54 per gallon [expired]
|
Majority of RFS currently met through use of conventional (corn-based) ethanol.
|
Biodiesel and Renewable Diesel
|
24.4
|
$1.00 plus $0.10 for small producers
|
$1.00 per gallon (may not claim this and the producer credit)
|
Specific carve-out in RFS for biomass-based diesel.
|
Cellulosic and Algae-Based Biofuels
|
Varies
|
$1.01 per gallon, plus accelerated depreciation of plant property
|
None
|
DOE and USDA biomass programs focused on cellulosic biofuel development
|
Advanced Biofuelsc
Varies
|
Varies
|
Varies
|
DOE Biomass Program
|
USDA Farm Bill programs, including Biorefinery Assistance, Repowering Assistance, Bioenergy Program, Biomass Crop Assistance Program (BCAP).
|
Hydrogen
|
18.4
|
None
|
$0.50 per gallon
|
DOE Hydrogen and Fuel Cell Technologies Program—$97 million in FY2015d
Tax credit for installation of refueling infrastructure (expired).
|
Liquefied Petroleum Gas (LPG)
|
18.3
|
None
|
$0.50 per gallon
|
Tax credit for installation of refueling infrastructure (expired).
|
Natural Gas
|
Compressed Natural Gas (CNG)
|
18.3
|
None
|
$0.50 per gallon
|
Tax credit for installation of refueling infrastructure (expired).
|
Liquefied Natural Gas (LNG)
|
24.3
|
None
|
$0.50 per gallon
|
Tax credit for installation of refueling infrastructure (expired).
|
Source: CRS analysis.
Notes: For more details, see Table A-1. Italics indicate expired provisions.
a. Program not exclusively for transportation biofuels—also covers bioenergy (i.e., stationary sources) and bioproducts.
b. Program not exclusively for transportation biofuels—also covers bioenergy (i.e., stationary sources) and bioproducts.
c. This category generally encompasses others, including cellulosic biofuels, algae-based biofuels, and biomass-based diesel fuels.
d. Program not exclusively focused on transportation.
Table A-3. Federal Incentives for Alternative Fuel and Advanced Technology Vehicles
Vehicle Technology or Fuel Type
|
Manufacturing Incentive
|
Purchase Incentive
|
Federal R&D
|
Other Programs
|
Electrified Vehicles
|
General
|
$103 million in FY2015 under DOE's Vehicle Technologies Program covers hybrid, battery electric, and plug-in technologies
|
National Clean Diesel Campaign (NCDC), Clean Cities.
|
Hybrid
|
ATVM loan program generally applies.
|
Up to $3,400 for passenger vehicles [expired]
|
Battery Electric
|
Credits under CAFE program; ATVM loan program generally applies.
|
Up to $7,500 for passenger vehicles;
Up to $2,500 for two- and three-wheeled and low-speed vehicles;
Up to $4,000 for conversion kits [expired]
|
Plug-in Hybrid
|
Credits under CAFE program; ATVM loan program generally applies.
|
Up to $7,500 for passenger vehicles;
Up to $2,500 for two- and three-wheeled and low-speed vehicles;
Up to $4,000 for conversion kits; [expired]
|
Ethanol Flexible Fuel Vehicle (FFV)
|
Credits under CAFE program expire after 2019 model year.
|
None
|
Limited
|
National Clean Diesel Campaign (NCDC), Clean Cities.
|
Fuel Cell Vehicles
|
Credits under CAFE program; ATVM loan program generally applies.
|
Up to $8,000 for passenger vehicles
|
DOE Hydrogen and Fuel Cell Technologies Program—$97 million in FY2015a
National Clean Diesel Campaign (NCDC), Clean Cities.
|
Natural Gas Vehicles
|
Limited
|
Compressed Natural Gas (CNG)
|
Credits under CAFE program; ATVM loan program generally applies.
|
Up to $4,000 for passenger vehicles [expired]
|
National Clean Diesel Campaign (NCDC), Clean Cities.
|
Liquefied Natural Gas (LNG)
|
Credits under CAFE program; ATVM loan program generally applies.
|
Up to $4,000 for passenger vehicles [expired]
|
National Clean Diesel Campaign (NCDC), Clean Cities.
|
Source: CRS analysis.
Notes: For more details, see Table A-1. Italics indicate expired provisions.
a. Program not exclusively focused on transportation.
Table A-4. Expired Programs by Agency
Administering Agency
|
Program
|
Description
|
Expiration Date
|
Eligible Fuels or Technologies
|
Internal Revenue Service
|
Biodiesel Income Tax Credit
|
Biodiesel producers (or producers of diesel/biodiesel blends) may claim a per-gallon tax credit through the end of 2013. The credit is valued at $1.00 per gallon. Before amendment by P.L. 110-343, the credit was valued at $1.00 per gallon of "agri-biodiesel" (biodiesel produced from virgin agricultural products such as soybean oil or animal fats), or 50 cents per gallon of biodiesel produced from previously used agricultural products (e.g., recycled fryer grease). The tax credit expired at the end of 2009 and was not extended until the passage of P.L. 111-312, which retroactively applied the extension to fuel produced in 2010. The tax credit also expired at the end of 2011 and was extended through 2013 by P.L. 112-240, which retroactively applied the extension to fuel produced in 2012.
|
December 31, 2013
|
Biodiesel producers and blenders
|
Conversion Kits
|
A credit of up to $4,000 was allowed for purchasing a kit to convert a vehicle to a plug-in electric drive vehicle.
|
December 31, 2011
|
Qualified plug-in electric vehicle kits.
|
Credit for Production of Cellulosic and Algae-Based Biofuel
|
Producers of cellulosic biofuel may claim a tax credit of $1.01 per gallon. For cellulosic ethanol producers, the value of the production tax credit is reduced by the value of the volumetric ethanol excise tax credit and the small ethanol producer credit—the credit is currently valued at $1.01 cents per gallon (the offsetting tax credits have expired). P.L. 112-240 amended the credit to include non-cellulosic fuel produced from algae feedstocks.
|
December 31, 2013
|
Cellulosic and algae-based biofuels.
|
Plug-in Electric Vehicle Credit
|
A maximum credit of $2,500 is allowed for certain types of new qualified plug-in electric vehicles, including low-speed vehicles or vehicles with two or three wheels.
|
December 31, 2013
|
Two- or three-wheeled plug-in electric vehicles or certain low-speed vehicles.
|
Renewable Diesel Tax Credit
|
Producers of biomass-based diesel fuel (or producers of diesel/renewable biodiesel blends) may claim a $1.00 per gallon tax credit through the end of 2013. Renewable diesel is similar to biodiesel, but it is produced through different processes and thus was ineligible for the (above) biodiesel credits. The tax credit expired at the end of 2009 and was not extended until the passage of P.L. 111-312, which retroactively applied the extension to fuel produced in 2010. The credit also expired at the end of 2011 and was extended through 2013 by P.L. 112-240, which retroactively applied the extension to fuel produced in 2012.
|
December 31, 2013
|
Renewable diesel.
|
Small Agri-Biodiesel Producer Credit
|
The small agri-biodiesel producer credit is valued at 10 cents per gallon of "agri-biodiesel" (see Biodiesel Tax Credit, above) produced. The credit may be claimed on the first 15 million gallons of ethanol produced by a small producer in a given year through the end of 2013. The tax credit expired at the end of 2009 and was not extended until the passage of P.L. 111-312, which retroactively applied the extension to fuel produced in 2010. The credit also expired at the end of 2011 and was extended through 2013 by P.L. 112-240, which retroactively applied the extension to fuel produced in 2012.
|
December 31, 2013.
|
Any agri-biodiesel producers with production capacity less than 60 million gallons per year.
|
Small Ethanol Producer Credit
|
The small ethanol producer credit was valued at 10 cents per gallon of ethanol produced through the end of 2011. The credit was claimed on the first 15 million gallons of ethanol produced by a small producer in a given year.
|
December 31, 2011
|
Ethanol
|
Special Depreciation Allowance for Cellulosic and Algae-Based Biofuel Plant Property
|
A taxpayer may take a depreciation deduction of 50% of the adjusted basis of a new cellulosic or algae-based biofuel plant in the year it is put in service. Any portion of the cost financed through tax-exempt bonds is exempted from the depreciation allowance. Before amendment by P.L. 110-343 the accelerated depreciation applied only to cellulosic ethanol plants that break down cellulose through enzymatic processes—the amended provision applies to all cellulosic biofuel plants. Before amendment by P.L. 112-240 the provision did not apply to algae-based biofuel plants: the incentive for algae-based plants applies to property placed in service in 2013.
|
December 31, 2013
|
Cellulosic and algae-based biofuels.
|
Volumetric Ethanol Excise Tax Credit
|
Gasoline suppliers who blend ethanol with gasoline were eligible for a tax credit of 45 cents per gallon of ethanol.
|
December 31, 2011
|
Ethanol (and other alcohol fuels).
|
U.S. Customs and Border Protection
|
Import Duty on Fuel Ethanol
|
A most-favored nation duty of $0.54 per gallon of fuel ethanol applied to imports from most countries through 2011. A 2.5% ad valorem tariff still applies.
|
Added duty expired December 21, 2011
|
Imported ethanol for fuel use.
|
Footnotes
1.
|
In general these are advanced diesel vehicles.
|
2.
|
For more information, see CRS Report R42721, Automobile and Truck Fuel Economy (CAFE) and Greenhouse Gas Standards, by [author name scrubbed], [author name scrubbed], and [author name scrubbed].
|
3.
|
CRS Report R40155, Renewable Fuel Standard (RFS): Overview and Issues, by [author name scrubbed] and [author name scrubbed].
|
4.
|
For more information, see CRS Report R42064, The Advanced Technology Vehicles Manufacturing (ATVM) Loan Program: Status and Issues, by [author name scrubbed] and [author name scrubbed].
|
5.
|
The gasoline tax was originally enacted in 1932 and dedicated solely to reducing a federal budget deficit. It remained that way until the passage of the Federal Aid Highway Act of 1956 (P.L. 84-627) which established the Highway Trust Fund; the Highway Revenue Act was Title II of P.L. 84-627. For more details about the role of the fuels tax in funding the federal highway program, see CRS Report RL30304, The Federal Excise Tax on Motor Fuels and the Highway Trust Fund: Current Law and Legislative History, by [author name scrubbed].
|
6.
|
Taxes dedicated to the Highway Trust Fund (HTF), and authority to place those taxes into the HTF and to spend funds out of the HTF all have expiration dates which must be extended by Congress periodically.
|
7.
|
JCT does not place a tax expenditure cost on excise taxes.
|
8.
|
The tax is imposed on the producer of such fuels.
|
9.
|
For JCT tax expenditure estimates, see U.S. Congress, Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2014-2018, 113th Cong., 2ndt sess., August 5, 2014, JCX-97-14 (Washington: GPO, 2014).
|
10.
|
Under Map-21, Congress discontinued eight FTA programs, including the Clean Fuels Program, leaving unobligated balances from prior years to be spent.
|
11.
|
For program details, see CRS Report R41985, Renewable Energy Programs and the Farm Bill: Status and Issues, by [author name scrubbed].
|
12.
|
USDA's Commodity Credit Corporation is the funding mechanism for the mandatory payments that are administered by various agencies of USDA, including all of the farm commodity price and income support programs and selected conservation programs. For more information on mandatory versus discretionary authorizations, see CRS Report R43110, Agriculture and Related Agencies: FY2014 and FY2013 (Post-Sequestration) Appropriations, coordinated by [author name scrubbed].
|
13.
|
H.J.Res. 117, Continuing Appropriations Resolution, was signed into law on September 28, 2012.
|
14.
|
H.R. 933, Consolidated and Further Continuing Appropriations Act, was signed into law on March 26, 2013.
|
15.
|
Because of the nature of the credit, the actual tax expenditure is $0, although tax receipts are reduced by approximately $6 billion.
|