What will the biofuel industry get from the new energy bill?

No one knows when the energy bill moving through the American Congress, with all its CAFE revisions and more, will make it to the president's desk and then into law ( maybe) and we certainly don't know exactly what it will look like when it does get there. But not knowing just means it's time to predict what's coming down the pipe.

So, the folks at Kiplinger got out their crystal balls and they think that "the biofuel industry will clearly come up with the aces." These aces will likely include:
  • A new Renewable Fuel Standard (RFS) of 35 billion gallons -- roughly 20% of the estimated U.S. motor vehicle fuels market -- by 2022.
  • An additional 50¢-a-gallon federal tax credit for cellulosic ethanol, made from switchgrass, sawdust, farm waste or other lignin sources ... on top of the current 51¢-a-gallon credit for all ethanol.
  • A new $1.10-a-gallon tax credit for biobutanol made from cellulosic sources will also get the nod.
In other renewables news, Kiplinger's Jim Ostroff sees more tax credits for commercial wind, solar and fuel cells utilities and the chance for solar energy and hybrid vehicle purchase credits to offset the alternative minimum tax.

A biobutanol tax boost would certainly get some of our readers excited and that extra 50 cents per gallon benefit for cellulosic seems to me to be the most forward-thinking of all these possibilities. It's a safe bet that we see a further jump in Toyota hybrid sales if there was some extra tax benefit to buying one now that most of the tax help has been reduced.

[Source: Kiplinger / Jim Ostroff]

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