Industry: Federal Tax Credit Will Help Advance Higher Blends of Bioheat Fuel
In an important move that will help the heating oil industry achieve its goals of higher blends of renewable fuel and significant reductions in greenhouse gas emissions (GHGs), President Trump on Dec. 20 signed into law a year-end spending bill (H.R.1865) that includes a five-year extension of the federal biodiesel tax credit. Industry trade groups including the New England Fuel Institute and the National Biodiesel Board hailed the move, issuing the following statement:
“Heating oil associations and their members are applauding renewal of the biodiesel tax credit and expired tax provisions, known as ‘tax extenders.’ The proposal enjoyed support from members of Congress in all nine Northeast states and strong bipartisan support from lawmakers across the country.
“The new law renews the biodiesel tax credit retroactively for 2018 and 2019. To provide long-overdue certainty to the market and incentivize blending into the future, Congress is extending the credit for an additional three years, or through 2022. The tax credit will continue to offer $1 per gallon for the blending of qualified biodiesel and renewable diesel into distillate fuels including home heating oil. Blends of biodiesel and conventional heating oil are often referred to as Bioheat Fuel – a safe, efficient, and environmentally competitive home heating fuel.
“The credit has been in limbo since its lapse at the end of 2017, leaving producers, wholesale and retail marketers, and consumers in the lurch. Over the last two years, heating oil associations joined forces with the biodiesel industry to press for reinstatement of the tax credit. Grassroots advocacy campaigns generated thousands of letters and phone calls to Congress and frequent ‘fly-in’ events brought retail marketers to Washington to meet with key lawmakers.
“NEFI President and CEO Sean Cota said, ‘I would like to personally thank everyone that wrote, called, or took the time to meet personally with members of Congress in support of this hard-fought effort.’ Cota said the credit’s renewal will boost confidence in renewable liquid heating fuels and result in greater investments by the business community. ‘Policymakers are beginning to acknowledge that our industry can achieve dramatic greenhouse gas reductions in a shorter period of time, and with minimal cost to the homeowner, as compared to other heating fuels.’
“Restoration of the credit has been a top priority for businesses like mine as we pursue higher blends in our fuel and partner with policymakers in reducing carbon emissions and hence retain our customer base,” said NEFI Government Affairs Committee Chairman Scott E. MacFarlane of MacFarlane Energy in Dedham, Massachusetts. ‘Importantly, it will help further our industry’s commitments under the Providence Resolution,’ MacFarlane said, referring to a recent commitment by the heating oil industry to reduce GHG emissions and help meet increasingly aggressive state and regional climate change laws. At an industry summit in Providence, Rhode Island, in September, more than 300 industry representatives endorsed the following resolution:
“Be it resolved that the heating oil industry will reduce its greenhouse gas emissions – based on 1990 levels – by 15% by 2023, 40% by 2030 and net-zero by 2050.
“Heating oil retailers across the Northeast already offer biodiesel blends of 20% (B20) or higher. Rigorous studies have found that even modest blends result in dramatic GHG emissions reductions. A 50% (B50) blend in the Northeast would reduce carbon emissions by 18.5 million metric tons, which is like removing four million cars from the road. That is more than all registered vehicles in New York City, Boston, and Philadelphia combined. “Northeast heating oil associations advocating for the biodiesel tax credit legislation include the Berks-Schuylkill Oil Heat Association, Better Home Heat Council of Lehigh Valley, Connecticut Energy Marketers Association, Delaware Valley Fuel Dealers Association, Empire State Energy Association, Energy Marketers Association of New Hampshire, Energy Marketers Association of Rhode Island, Fuel Merchants Association of New Jersey, Maine Energy Marketers Association, Massachusetts Energy Marketers Association, NEFI, New York Oil Heating Association, Northeast Pennsylvania Energy Marketers Association, South Central Pennsylvania Energy Association, and the Vermont Fuel Dealers Association. It was also strongly supported by the National Biodiesel Board, the trade association for U.S. biodiesel producers. Bioheat is a registered trademark of NBB.
