New Federal Incentives for Clean Transportation

To ring in the new year, Congress not only avoided the dreaded “Fiscal Cliff”, but also brought cheerful news for green energy supporters.

The “American Taxpayer Relief Act of 2012” contains 12 energy tax extenders that will benefit wind energy, biofuels, cellulosic biofuel (like algae), natural gas, and electric vehicles. These tax policies should be able to support new research and innovation in this field.

Included are the following provisions:

  • 30% tax credit for the installation of any alternative fuel infrastructure in 2012 and 2013, capped at $30,000.
  • Reactivation of a 50-cent-per-gallon-equivalent tax credit on sales of compressed natural gas (CNG) for use as vehicle fuel.
  • Reinstatement of tax credits for fuel blenders who use biodiesel and renewable diesel from biomass, of $1 a gallon, for both 2012 and 2013.
  • Extension of the cellulosic biofuel tax credit for blenders of $1.01 a gallon, through 2013, with the addition of algae as a qualified feedstock.
  • A tax credit for 2 and 3-wheeled electric vehicles of 10% of the purchase price, up to a maximum of $2,500.

These are certainly helpful and important tax policies, but most expire at the end of 2013 or 2014. Unless these policies are permanent (or, at least, much longer-lasting with appropriate phase-outs), it won’t encourage investors or companies to continually move forward.

You can read the entire bill here.

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