EXCLUSIVE Farm Belt Lawmakers Call for Biofuel Investments and Tax Credits in New Bills



June 21 (Reuters) – Billions of dollars in federal investment and tax credits to boost demand for U.S. biofuels will be part of two bills Democratic lawmakers will bring to the U.S. Congress, two sources familiar with the project have said .

Members of Congress from rural states will introduce bills in the coming weeks asking for federal funds to add more high-biofuel blend pumps to gas stations and tax credits for automakers who put more flex-fuel vehicles on the road.

President Joe Biden was due to provide an update on Monday on whether the White House would agree to a scaled-down infrastructure bill negotiated by a bipartisan group of lawmakers. If that happens, the sources said, the biofuel bills could turn into a massive spending bill with economic priorities that Biden omitted from infrastructure talks. Democrats and the White House are hoping the spending bill will pass party lines this fall in a process called reconciliation.

The biofuels industry, including Archer Daniels Midland and Renewable Energy Group, is under pressure as the administration considers cutting biofuel mandates to help U.S. oil refiners cope with rising regulatory costs. Read more

Farm Belt Democrats, including Senator Amy Klobuchar of Minnesota and Representatives Cheri Bustos of Illinois and Cindy Axne of Iowa, are leading the charge to support biofuels, sources said. These lawmakers often criticize their party for paying too little attention to rural communities.

Lawmakers plan to seek $ 2 billion in funding to pay for new fuel pumps and other infrastructure to deliver blends of higher biofuels like ethanol and biodiesel. They are asking for a tax credit of 5 cents per gallon for gas stations offering what is called E15, which is gasoline containing 15% ethanol.

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

Thin majorities in the House and Senate will encourage Democratic lawmakers to fight for favored projects and regional demands, in return for support for the major spending plan. Congressional advisers and White House officials have warned that these regional and special interests could inflate the spending bill and complicate efforts to move forward with a party line vote.


While agricultural states want the White House to help the biofuels industry, the task forces and another group of Democratic senators have a competing demand to help lower costs for refiners. The US renewable fuels standard requires refiners to blend biofuels like ethanol into fuel or purchase tradable credits from competitors who do.

The US Environmental Protection Agency is considering a nationwide blanket waiver exempting US refiners from certain obligations. This would reduce the amount of renewable fuels that refiners must blend in the future and create a price cap on compliance credits.

Another priority for Biden has been to boost electric vehicles. It included 174 billion dollars to pay for charging stations in its “American Jobs Plan” presented in March.

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

“Investments in our electric vehicle system are necessary and good, but liquid fuel is not going to go away overnight,” Bustos told Reuters. She acknowledged her support for the biofuels market but did not share any details about the bill.

“The way we see biofuels as having the potential to reduce our carbon emissions now, not 10 years from now, not by 2050, but now,” Bustos said.

Reporting by Jarrett Renshaw; Editing by Heather Timmons and David Gregorio

Our standards: Thomson Reuters Trust Principles.


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