Yesterday evening, the U.S. House of Representatives passed the Limit, Save, Grow Act of 2023, by a narrow vote of 217-215. The legislation would raise the debt ceiling by $1.5 trillion or until the end of March 2024, whichever comes first, and cut spending to the tune of $4.5 trillion.
After hours of closed-door negotiations with biofuels champions prior to the House vote, Republican leadership agreed to make significant changes to the biofuels tax credit repeals originally included in this debt limit bill. Of note, the repeal of the Biodiesel Tax Credit extension was removed from the legislation. That means the extension of the BTC through 2024, as included in the Inflation Reduction Act, would remain in effect. Other tax credits important to the ethanol industry, including the Carbon Oxide Sequestration Credit and the Second Generation Biofuel Credit, were also removed from the legislation.
The legislation’s provisions related to new tax credit programs created under the IRA are a bit more complex. The House-passed bill would allow biofuel producers that have already entered into written contracts or made significant investments based on future tax credits between August 26, 2022, and April 19, 2023, to participate in the Sustainable Aviation Fuel Tax Credit and Clean Fuel Production Credit created through the IRA. However, for all other producers, these tax credits would no longer be available if this bill were to become law. The bill will now move to the Senate, where it is not expected to pass in its current form if brought up for a vote. ASA continues to support Congress and the administration identifying a bipartisan solution that will prevent a debt default and hopes that this vote will help jumpstart formal negotiations.