House GOP leaders, struggling to shore up Republican support for their debt ceiling bill, gave in and moved to preserve some, but not all, of the biofuel provisions that would be repealed or scaled back by the legislation.
The Limit, Save and Grow Act, which the Congressional Budget Office estimates would reduce future spending by an estimated $4.8 trillion over 10 years, would gut the clean energy and biofuel provisions that were the centerpiece of the Inflation Reduction Act passed in 2022.
However, Republican leadership agreed to preserve three of the biofuel-related incentives, including the $1-a-gallon tax credit for biomass-based diesel, which the GOP plan would have repealed retroactive to 2022.
After a meeting with lawmakers from Iowa and other states, House Speaker Kevin McCarthy, R-Calif., insisted to reporters Thursday evening that the bill wouldn't be modified.
But a leadership amendment that the House Rules Committee approved early Wednesday would protect that credit as well as an expansion of the 45Q tax credit for carbon sequestration, which is expected to help finance pipelines ethanol plants could use to lower their carbon intensity scores. Also protected was the existing $1.01-per-gallon tax credit for second-generation biofuels.
One of the lawmakers who expressed concerns about the biofuel policies in the bill, House Ag Committee member Rep. Mark Alford, released a statement Wednesday morning saying after discussions with McCarthy, he “could not be more pleased” with the bill.
“The Speaker showed a great ability to listen and effectively work with our conference to ensure our district’s needs were met,” Alford, R-Mo., said. “Our goal was to protect renewable fuel investments, ethanol and biodiesel, and we achieved that through our negotiations with the speaker.”
But White House Communications Director Ben LaBolt blasted the continued negotiations on the bill, which the Biden administration has criticized for its provisions on work requirements in federal welfare programs.
“Speaker McCarthy has cut a deal with the most extreme MAGA elements of his party to accelerate taking food assistance from hundreds of thousands of older Americans and to carve out one industry from his draconian cuts without making a single change to” the work requirement language, LaBolt said in a statement.
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Left unprotected was a new temporary tax credit for sustainable aviation fuel and a low-carbon clean production credit, known as 45Z, that will replace the SAF and biodiesel credits in 2025. However, the amendment would protect those credits for existing contracts that rely on the incentives.
Even with the changes sought by Midwest lawmakers, the GOP bill has no chance of passing the Democratic-controlled Senate but instead represents a negotiating position in future talks with the White House and Senate Democrats.
Story updated to include additional comments.
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