Congress’ Unfinished Business: Jobs on the Line

Congress has a mountain of unfinished business to complete this month before this session ends – FY12 appropriations, extensions of expiring tax incentives and unemployment benefits, fixing Medicare reimbursement rates, and more. Among these are expiring grants for renewable energy projects and production tax credits for biodiesel and alternative fuels. Tens of thousands of jobs are on the line. Will the renewable energy sector continue to grow in 2012 and beyond?

A year ago, Congress enacted the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (P.L. 111‐312) which extended the Section 1603 Treasury grant program through 2011. This program provides grants of up to 30 percent of costs in lieu of production tax credits for construction of new renewable energy facilities. This includes solar, wind, hydro, and geothermal facilities. In the bioenergy arena it includes closed‐loop and open‐loop biopower, landfill gas, anaerobic digesters, and waste-to-energy facilities. The program provides 10 percent grants for combined heat and power systems. Under the expiring law, all construction must start before the end of this year. So far, more than 22,000 projects have been launched since 2009, involving more than $22 billion in private investment, and creating tens of thousands of jobs.

On November 30, 750 companies sent a letter to Congress calling for an extension of this program. Some kinds of projects require years to plan and develop. A multi-year extension would allow for more effective planning and project development.

In addition, production tax credits for biodiesel ($1.00/gallon), renewable diesel ($1.00/gallon), small agri-biodiesel producers ($0.10/gallon), and alternative fuels ($0.50/gallon) are set to expire at the end of 2011. Approximately 18,000 jobs were created in the biodiesel industry last year, more than doubling employment in the industry, according to Biofuels Journal , thanks to the renewal of the production tax credit one year ago. In 2010, when Congress failed to renew the credit, many plants had to shut down.