• Dec 19th 2010 at 12:48PM
  • 22
On December 10th, the Senate voted to approve an $858-billion tax cut package that provides a significant amount of incentives for the clean vehicle sector. Late last Thursday, the U.S. House of Representatives, by nearly a 2-1 margin, passed the bill, paving the way for President Obama to sign the bill into law, which he did on Friday.

The tax bill includes a provision to extend, through 2011, the 45-cent-per-gallon ethanol tax credit and a 54-cent tariff on imported ethanol, as well as a 10-cent credit for small-scale U.S. producers of the corn-based fuel. In addition to subsidies for ethanol, the bill also includes an extension of the $1-per-gallon biodiesel tax credit through the end of 2011 and a 50-cent-per-gallon credit for producers of natural gas used in vehicles.

On the plug-in front, the tax cut bill includes the "Alternative Fuel Infrastructure Tax Credit," which enables residents to claim up to $1,000 in credits for installing a home charging station and businesses to receive up to $30,000 for chargers installed at commercial locations. These numbers are lower than they were for 2010, when the limits were $2,000 and $50,000, respectively.

[Source: Green Car Advisor | Image: laura padgett – C.C. License 2.0]


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  • 22 Comments
      • 4 Years Ago
      How do the tax cuts above compare with
      tax cuts the oil industry is getting?
      (I'm not from US)
      ff
      • 4 Years Ago
      Pandering and buying votes. That's all it's about.

      We've got the best government that deficit spending can buy.
      • 4 Years Ago
      See "The Never Ending Biodiesel Subsidy":

      http://biodiversivist.blogspot.com/2010/01/never-ending-biodiesel-subsidy.html

      Biofuels remain a rare bipartisan boondoggle.

      Biodiversivist
        • 4 Years Ago
        WOW...HAHAHAHA, that was a load of bull. Yes, he's right, people take advantage of subsidies where they can. He's totally ignoring all the people out there who are making fuel from non-food sources (technology that is readily available for biodiesel production), from domestic sources, for domestic markets. You know there are many more people that benefit form the $1 per gal than mid-west farmers. The amount of biodiesel made from soy has been dropping at a dramatic rate since 2007 (or more accurately the amount of biodiesel made from non-food sources has been increasing dramatically).

        Further, the subsidy has only been in place from 2004-2009. That's hardly never ending.
        • 4 Years Ago
        WOW...HAHAHAHA, that was a load of bull.

        "...He's totally ignoring all the people out there who are making fuel from non-food sources (technology that is readily available for biodiesel production)..."

        Only waste oils fit that definition and the supply is very limited (idea won't scale).

        "...You know there are many more people that benefit form the $1 per gal than mid-west farmers..."

        Actually, very few. The largest biodiesel refinery on the west coast only employs a few dozen people.
        • 4 Years Ago
        CP,

        "..Eliminating it means that all those guys using other [than food] feedstock are also out of a credit. .."

        The idea was to provide temporary help to see if they could become a viable industry. It is obvious by now that they can't be viable without that handout because the technology is mature (algae is just R&D). Making biodiesel out of vegetable oils will never see a big increase in efficiency or price reduction. The price of feedstock has nowhere to go but up.

        The rest of your post is unsubstantiated anecdotal innuendo. This is the internet. Anyone can claim anything. Without links to reliable sources claims have no merit.
        • 4 Years Ago
        "...Considering you think unhinged blogger was a reliable source, I see the problem we will have with this debate..."

        It matters not if the blogger is unhinged as long as his rantings contain multiple links to reliable, verifiable sources to back those rants up ; )

        CP said:

        "...The argument being made is that there has to be something long term (3-5years) for market stability..."

        The above statement contradicts your earlier comment:

        "...Further, the subsidy has only been in place from 2004-2009. That's hardly never ending..."

        CP said:

        "...Having your credit lapse, or come close to it, only to have it extended for a year is not consistent policy..."

        The industry knew that it was scheduled to lapse and will fight for an extension every time it lapses. Subsidies, once put in place are politically difficult to remove even for an obviously dead-end industry.

        "...The idea is to increase use of non-veg (or non food more specifically), while the infrastructure builds, and the market develops..."

        What infrastructure? Other than waste oil, which is very limited in supply, all other sources usurp cropland that could be growing food. Google " Transgressing identified and quantified planetary boundaries "


        "...You only say that [your post is unsubstantiated anecdotal innuendo] cause I called you on the same crap. I can back my argument up, you can't yours..."

        Really? Let's start providing links to sources then. We are allowed three per comment.

        "...The amount of biodiesel made from soy has been dropping at a dramatic rate since 2007 (or more accurately the amount of biodiesel made from non-food sources has been increasing dramatically) "

        Prove it.

        "...You're dead wrong [that the largest biodiesel refinery employs less than 60 people]. If you knew any better you'd know how wrong you were ... Your example of the largest biodiesel refiner is anecdotal at best ..."

        According to this source http://green.blogs.nytimes.com/2009/03/20/american-biodiesel-makers-reeling/ "... one of the country’s biggest biodiesel refiners, cut 24 employees — which according to the Seattle Times amounts to a majority of the staff..."

        "...Only half of the biodiesel produced in the US (in 2010)comes from soy; that means the other half comes from a variety of other feedstock, ...while using veg oils does tie you to the commodities market, that's not the only source....This isn't some hand out to the soy industry..."

        Ninety percent of it is and it does not matter if it is to soy or waste grease collectors. One is not more deserving of the handout than the other. According to this source: http://en.wikipedia.org/wiki/Biodiesel soybean oil alone accounting for about ninety percent of all fuel stocks in the US.

        "...oil used for food inevitably becomes waste oil.."

        Actually not. Much of it is consumed with the food, as food, and collecting that oil from 300 million frying pan point sources is going to be difficult.

        "...The soy biodiesel industry was started because farmers had more oil than they could sell..."

        That's a biodiesel industry spawned urban legend. All vegetable oil produced in the US gets sold. Prove to us that farmers could not get any money for it in prior to the RFS legislation and therefore just threw it away. A significant portion of a soy crop's value is in its oil.

        "...The idea is to increase use of non-veg (or non food more specifically), while the infrastructure builds, and the market develops..."

        Maybe that is your idea but it certainly is not the "idea" stated or a requirement of the mandate legislation and there isn't nearly enough waste oil to expand the market very far (awaiting your link to a source showing percentage of biodiesel that is from waste).

        "...Veg oil prices climb and drop. You can't say that the price wont drop. Show me that the prices will never drop..."

        Show me that the "average annual prices will" drop. Once again, we're playing with your subjective metrics. Source: http://www.mongabay.com/images/commodities/charts/soybean.html

        With a human population heading for nine billion, with China's demand for grain fed beef increasing, with mandated use of biodiesel regardless of feedstock, the odds are very high t
        • 4 Years Ago
        "The idea was to provide temporary help to see if they could become a viable industry. It is obvious by now that they can't be viable without that handout because the technology is mature (algae is just R&D). Making biodiesel out of vegetable oils will never see a big increase in efficiency or price reduction. The price of feedstock has nowhere to go but up."

        Well maybe not by your standard, but those are your subjective values. You're right the credit is supposed to be temporary, and nobody is arguing for this to be permanent. The argument being made is that there has to be something long term (3-5years) for market stability. Having your credit lapse, or come close to it, only to have it extended for a year is not consistent policy, and has hindered the industry since 2007. And while using veg oils does tie you to the commodities market, that's not the only source. The idea is to increase use of non-veg (or non food more specifically), while the infrastructure builds, and the market develops.

        Veg oil prices climb and drop. You can't say that the price wont drop. Show me that the prices will never drop. And there are always increases in efficiency, though, I would agree, it may be hard to classify one as great, but once again, we're playing with your subjective metrics.

        "The rest of your post is unsubstantiated anecdotal innuendo. This is the internet. Anyone can claim anything. Without links to reliable sources claims have no merit."

        You only say that cause I called you on the same crap. I can back my argument up, you can't yours. It is very substantiated (US census for feedstock balance).

        Considering you think unhinged blogger was a reliable source, I see the problem we will have with this debate.
        • 4 Years Ago


        "Only waste oils fit that definition and the supply is very limited (idea won't scale)."

        It's not hard to make waste oil that fit the definition, and while the supply is much harder to ferret out, oil used for food inevitably becomes waste oil. That doesn't even count the use of animal fats (waste product) and other non-food feed stock, such as cover crop (pennycress, mustard, camelina), algae (still in R&D) or other microbiotics. All these can qualify for the credit if they meet ASTM D6751. The soy biodiesel industry was started because farmers had more oil than they could sell, and were looking for a way to add more value and create more demand for that particular product. So, while the soy guys might be the reason this subsidy exist, the definition required to grab it is very open to other feedstock. And depending on you're definition of scaling, waste oil guys have scaled and are taking advantage of this (at least 200Million gallons/year of potential production capacity). This isn't some hand out to the soy industry, even though the soy industry is best positioned to benefit. Eliminating it means that all those guys using other feedstock are also out of a credit. They exist, and have been clamoring for it, and it's a pity to see that someone notices a Senator from the mid-west supports this, and automatically it's an earmark. It's not just for them.

        "Actually, very few. The largest biodiesel refinery on the west coast only employs a few dozen people."

        You're dead wrong. If you knew any better you'd know how wrong you were. Only half of the biodiesel produced in the US (in 2010)comes from soy; that means the other half comes from a variety of other feedstock, mostly non-food, all of which are eligible to receive the credit, and have been.
        Your example of the largest biodiesel refiner is anecdotal at best, and out of context. They've had to scale back the number of employees, when the credit lapsed, and have been producing at minimal volumes (and stopped producing at all for a while). Meanwhile, they are not the only producers on the west coast, by a long shot, only the guys with the biggest tanks.

        It seems like everyone here is out to punish big-ag, and fail to realize that some of these subsidies that big-ag can benefit from are benefiting many more people than big-ag.
      • 4 Years Ago
      So, $.45 per gallon tax credit to oil companies that blend in ethanol. add in the $.10 per gallon for "small-scale" producers and it comes to $.55.. Used in a 25 mpg car (running on gasoline). Multiply by .7 (ethanol has lower energy density) for 17.5 mpg of ethanol. So it takes ~5.7 gallons of ethanol to go 100 miles, ot $2.57/$3.14 in subsidies per 100 miles.

      Take electricity at $.12 per kWh (average full cost). For an electric car going 4 miles per kWh, that worksout to ~$3 per 100 miles full cost.

      So the blending subsidy is now less per 100 miles than the full cost of electricity to power a car on average, but total subsidies are more than the full cost of electricity to power a car (off peak rates would make electricity cheaper). If we were able to take all that money being spent on ethanol and use it for electrification, electric vehicles could really take off.
      • 4 Years Ago
      Wow, i thought there was some focus on reducing our national debt.
      Republicans and Democrats have came together to cut nothing.

      Crazy stuff.
        • 4 Years Ago
        Very crazy. Our country is in serious trouble, and all they do is fiddle.
        • 4 Years Ago
        evnow: to my credit, no, i was not fooled.

        Both want to spend a crapton of money.. the difference is what they want to spend money on.
        • 4 Years Ago
        LOL. You seriously thought the Republicans wanted to reduce budget deficit ?! Where were you during the Reagan/Bush years ?

        They talk about budget deficit only to block measures which they think helps democrats.
      emailbjw
      • 4 Years Ago
      Do away with all credits. Let free market decide.
        • 4 Years Ago
        @emailbjw
        Do away with ALL subsidies?

        You would not be able to afford food, clothing, medical services... pretty much anything.

        Goods and services in the U.S. rely on cheap transportation of those goods and for workers to be able to travel for services.

        If oil subsidies end... then gasoline prices go way up... then EVERYTHING becomes more expensive.

        ------------

        Oil subsidies should have expired long ago and gradually so the economy could stand on it's own. Plugin cars would have been popular 20 years ago.
        • 4 Years Ago
        @emailbjw
        Free market? Oh man, wait til I'm rich then let the free market reign in! I would have so much sweat shops and child labor for all of my business ventures that I'll make USA the next China/third world country.

        I'll be pimping with my own clothes line. "Guys! Look at my shoes, a freaking American kid lost a finger making em. Pretty cool eh? And we don't provide any healthcare benefits. LOL." Ah, what a great conversation starter.
        • 4 Years Ago
        @emailbjw
        Like that's going to happen any time soon. Oil is heavily subsidized, and many large corporations can tweak the laws and tax dollars in their favor as they can afford to bribe politicians. Since those subsidies aren't going away, I'm all for reducing the tax burden to individuals like you and me who are trying to do something beneficial.
      • 4 Years Ago
      Why in hell are we still subsidizing corn-based ethanol.
      I thought the logic of that fuel was debunked long ago.
        • 4 Years Ago
        Not really its just that the mass media got a hold of some badly done research and ran with it. David Blume, watch his videos on YouTube, there's a lot of info about ethanol not talked about by the media.
      • 4 Years Ago
      Like that's going to happen any time soon. Oil is heavily subsidized, and many large corporations can tweak the laws and tax dollars in their favor as they can afford to bribe politicians. Since those subsidies aren't going away, I'm all for reducing the tax burden to individuals like you and me who are trying to do something beneficial.
        • 4 Years Ago
        ^ That was supposed to be in reply to "Tax Credit or Die"
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