By: Cheryl Kaften
Senate Finance Committee Ranking Democrat Ron Wyden (D-Oregon) and his colleagues introduced a Clean Energy for America Act on May 5 that includes technology-neutral tax credits for domestic production of clean electricity and clean transportation fuel, as well as performance-based tax incentives for energy-efficient homes and office buildings. These credits are open to all resources, including fossil fuels that capture carbon or make efficiency improvements.
“This bill is built around the proposition that the law ought to reward innovative energy technologies with incentives that spark investment in the private economy,” Senator Wyden said in sponsoring the new legislation. “These investments will shrink electric bills for American families and create new clean energy jobs in Oregon and across the country.”
According to Wyden, the current system of energy incentives in the tax code is overly complex and far less effective than it should be.
“Today,” he noted, “there are 44 different energy tax incentives. More than half are too short-term to effectively stimulate investments, while also providing different subsidies to different technologies with no clear policy direction.”
To address these issues, the bill proposes a dramatically simpler set of long-term, performance-based energy tax incentives. Almost all existing renewable energy tax incentives are consolidated into three new provisions:
Incentives for Clean Electricity
Incentives for Clean Transportation Fuel
Incentives for Energy Conservation
The Renewable Fuels Association, a trade association for America’s ethanol industry, commended the effort. “RFA and its members are truly thankful to Senator Wyden for having the foresight and commitment to propose a clean energy package that encourages the development of a broad range of technologies to produce clean fuels in the United States,” commented RFA CEO Bob Dinneen. “By reforming the existing tax credit into a technology neutral incentive, it will help stimulate investment among a wider range of production technologies and help promote the growth of the second-generation biofuels industry.
“We look forward to working with Senator Wyden and his colleagues in the Senate Finance Committee to ensure that any final clean energy tax reform proposal is crafted in a way that incentivizes performance-based improvements in the production of biofuel, and at the same time promotes industry growth,” Dinneen added.
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