Senate Approves Collins-Levin Energy Package

March 14, 2008 -- WASHINGTON – Early Friday, the Senate approved a Collins-Levin amendment to the FY09 budget resolution that proposes tax incentives that would help to increase our use of renewable energy and reduce our dependence on oil.

“By providing tax incentives for renewable energy, we not only help the environment and reduce our dependence on oil, but we also invest in the economy and create jobs,” Levin said. “Two of the tax credits involve plug-in hybrids and cellulosic ethanol, both of which could help to significantly reduce oil use and greenhouse gas emissions, but both are technologies where tax incentives are critical to commercial viability.”

The budget resolution includes a reserve fund for clean energy and the environment that establishes a framework for Congress to enact legislation that will reduce our dependence on foreign oil, reduce our greenhouse gas emissions, and protect the environment. The Collins-Levin amendment adds several tax incentives to those that may be included in the legislation under the reserve fund and it specifies adjustments in the tax code that could be used to help pay for the tax credits proposed to be extended or established. The additions help take strides toward increased use of renewable sources of energy and away from our dependence on oil.

Included in the amendment are tax incentives that offer the potential to reduce significantly our dependence on oil and our greenhouse gas emissions. Some of the specific credits proposed in the amendment include:

* extension of the current production tax credit for biodiesel fuel and the small-producer biodiesel tax credit, both of which will expire at the end of 2008. Extension of these tax credits were included in the 2007 energy bill but not enacted into law. Many of our small biodiesel producers are already having a hard time now because of the increasing prices of feedstock. Without this tax credit, they will not be able to stay afloat and we will lose these new sources of biodiesel fuels;

* a new production tax credit for cellulosic ethanol. Current law provides for an ethanol blenders tax credit for ethanol from any source. Ethanol produced from cellulosic sources, however, offers potential to reduce greenhouse gas emissions by 80 percent or more. Therefore, we propose a new per gallon production tax credit for cellulosic ethanol, up to a limit of 60 million gallons. This provision was also included in the 2007 energy bill but not enacted into law. Again, this is a necessary boost needed by those pushing the technology toward cellulosic ethanol to ensure that they are able to bring the technology to commercialization; and

* a new consumer tax credit for plug-in hybrid vehicles, including a tax credit for hybrid conversion kits that can modify current technologies with the latest in battery technology as it is developed. This new tax credit could provide for a base tax credit of $3,000, with up to an additional $2,000 available based upon kilowatt hours of battery power capacity. This tax credit was previously included in the 2007 energy bill but not adopted in the final package. The combination of advanced battery technology and advanced hybrid systems offer tremendous potential for reduction of oil consumption, but tax incentives will be necessary to offset the increased cost to consumers and to achieve widespread acceptance by consumers. These tax credits will accelerate significantly the availability of these new plug-in hybrid vehicles to consumers.

Source: Senator Carl Levin

Bookmark/Search this post with:

 •    •    •    •    •    •    •    •    •    •    •    •