A Greener Biofuels Tax Credit: The Path to Better Biofuels

Fact Sheet
July 26, 2012

Next-generation biofuels have the potential to deliver better environmental performance -- reduced lifecycle greenhouse gas (GHG) emissions and farming practices that result in cleaner water and healthier soils -- with less impact on food and feed prices. Market incentives are needed, however, to reward good conservation practices. These incentives will prevent growers from having to compete solely on the basis of low feedstock prices and forego potential improvements in the environmental performance of their farming systems. Congress should start by immediately ending the main corn ethanol tax credit -- the Volumetric Ethanol Excise Tax Credit (VEETC) -- which rewards volume without requiring measurable environmental performance. To jumpstart advanced biofuels, NRDC proposes a technology-neutral Greener Biofuels Tax Credit that rewards producers for creating biofuels that protect our climate and natural resources.