Unique-Farm Belt lawmakers push for biofuel funding and tax credit in new payments By Reuters


© Reuters. FILE PHOTO: Des Moines, Iowa, U.S.A. on Jan. 29, 2020, will show elections at the pump, including ethanol or no ethanol. REUTERS / Brian Snyder / file photo

By Jarrett Renshaw

(Reuters) – Billions of dollars in federal investments and tax credits to fuel demand for US biofuels will be part of two bills that Democratic lawmakers will propose to US Congress, two sources familiar with the plans said.

Rural State Congressmen will be tabling bills in the coming weeks seeking federal funding to add more high-mix pumps at retail stations and tax credits for automakers putting more “flex-fuel” vehicles on the road.

President Joe Biden was expected to provide an update on Monday on whether the White House will accept a reduced infrastructure bill negotiated by a bipartisan group of lawmakers. If that happens, the sources said, the biofuel bills could be turned into a massive spending bill, with Biden leaving out economic priorities from the infrastructure talks. Democrats and the White House hope that the spending bill will bypass the party lines this fall in a process called reconciliation.

The biofuel industry, including Archer Daniels Midland (NYSE 🙂 and Renewable Energy Group (NASDAQ :), is under pressure as the government considers cutting biofuel mandates to help U.S. oil refineries with rising regulatory costs.

Farm belt Democrats, including Senator Amy Klobuchar from Minnesota and Reps Cheri Bustos from Illinois and Cindy Axne from Iowa, lead charges of supporting biofuels, sources said. These lawmakers often blame their party for not paying enough attention to rural communities.

Legislature plans to apply for $ 2 billion in funding to pay for new fuel pumps and other infrastructure to provide higher biofuel blends like ethanol and biodiesel. They are demanding a tax credit of 5 cents per gallon for gas stations that offer so-called E15, a gasoline that contains 15% ethanol.

They are also calling for a $ 200 per car tax credit for automakers who make “flex-fuel” vehicles that can run on virtually any blend of gasoline or ethanol.

Narrow majorities in the House and Senate will encourage Democratic lawmakers to fight for pet projects and regional demands in return for support for the grand spending plan. Congressional aides and White House officials have warned that these regional and special interests could swell the spending bill and hamper efforts to push party line voting.


While farm states want the White House to help the biofuel industry, unions and another group of Democratic senators have a competing demand to cut refining costs. The U.S. renewable fuel standard requires refineries to mix biofuels like ethanol in fuels or buy tradable loans from competitors who do.

The US Environmental Protection Agency is considering a nationwide general waiver that will exempt US refineries from some obligations. This would reduce the amount of renewable fuel refineries that need to be blended in the future and create a price cap for compliance credits.

Another priority for Biden is promoting electric vehicles. He added $ 174 billion to his American Jobs Plan, launched in March, to pay for charging stations.

Electric vehicles are key to Biden’s drive to bring the United States to net-zero carbon emissions by 2050. Environmental groups may see investments in biofuels as a counterpart to these goals.

“Investing in our electric vehicle system is necessary and good, but liquid fuel is not going to go away overnight,” Bustos told Reuters. It confirmed its support for the biofuels market but did not provide any billing details.

“We believe biofuels have the potential to reduce our carbon footprint now, not in 10 years, not by 2050, but now,” said Bustos.

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