Whitehouse, Wyden, and Colleagues Introduce Legislation to Overhaul Energy Tax Code, Combat Climate Change
Bill would consolidate 44 energy incentives into three technology-neutral provisions to promote energy independence and a low-carbon economy
Washington, D.C. – Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and 25 colleagues today introduced legislation to overhaul the federal tax code to support an innovative, low carbon economy. The Clean Energy for America Act would consolidate the current 44 energy incentives into three technology-neutral provisions that encourage clean electricity, clean transportation and energy efficiency.
The bill is cosponsored by Senators Chuck Schumer, D-N.Y., Debbie Stabenow, D-Mich., Maria Cantwell, D-Wash., Robert Menendez, D-N.J., Tom Carper, D-Del., Ben Cardin, D-Md., Michael Bennet, D-Colo., Sheldon Whitehouse, D-R.I., Maggie Hassan, D-N.H., Catherine Cortez-Masto, D-Nev., Dianne Feinstein, D-Calif., Dick Durbin, D-Ill., Amy Klobuchar, D-Minn., Jeanne Shaheen, D-N.H., Kirsten Gillibrand, D-N.Y., Richard Blumenthal, D-Conn., Brian Schatz, D-Hawaii, Mazie Hirono, D-Hawaii, Martin Heinrich, D-N.M., Angus King, I-Maine, Tim Kaine, D-Va., Cory Booker, D-N.J., Gary Peters, D-Mich., Chris Van Hollen, D-Md., and Tina Smith, D-Minn.
“The federal tax code is woefully inadequate to address today’s energy challenges. It’s a hodgepodge of temporary credits, anchored by advantages for Big Oil, that don’t effectively move us toward the goals of reducing carbon emissions or lowering electricity bills for American families. It’s time to kick America’s carbon habit, and that means a complete transformation of the tax code to reward clean electricity, transportation and conservation,” Wyden said.
To incentivize clean electricity, the bill would provide a production tax credit (PTC) or an investment tax credit (ITC) to facilities that are at least 35 percent cleaner than average, with a maximum of a 2.4 cents per kilowatt hour PTC or a 30 percent ITC available for facilities with zero carbon emissions.
To encourage clean transportation fuel, the bill would provide a tax credit for fuels that are at least 25 percent cleaner than average, with the maximum credit of $1 per gallon available for fuels with zero carbon emissions. The bill also eliminates the per-manufacturer cap on the tax credit for electric vehicles and extends the credit for fuel cell electric vehicles.
To incentivize energy conservation, the bill would provide a performance-based tax credit for energy efficient homes and tax deduction for energy efficient commercial buildings. The value of the tax credit would increase as more energy is conserved.
Text of the legislation available is here.
A one-page summary of the bill is available here.
A section-by-section summary of the bill is available here.
Statements from cosponsors
“Simplifying our nation’s tax code and eliminating giveaways to Big Oil will help reduce carbon pollution and create more good-paying jobs for people in Michigan,” said Senator Stabenow. “This legislation is one of many steps we need to take to combat climate change.”
“Our tax code should be encouraging the deployment of all clean energy technologies that are good for public health and our climate. Instead, however, the tax code we have today incentivizes the very sources that fuel climate change and make our air harder to breathe. Too often, the incentives that actually push us in the right direction expire too quickly or erratically, making it difficult for business leaders to plan long-term investments. The Clean Energy for America Act will eliminate outdated incentives for fossil fuels and instead provide long-term, technology-neutral incentives for the investment and production of electricity and vehicles that help drive down our country’s greenhouse gas emissions,” said Senator Carper, top Democrat on the Senate Environment and Public Works Committee. “I’m proud to support this legislation, and I want to thank Senator Wyden for his leadership.”
“Clean energy is creating hundreds of thousands of family-supporting jobs and sustainable, responsible growth nationwide. Congress has the ability to level the playing field so that all energy providers have an equal opportunity to build on their successes and cut pollution,” said Senator Cardin. “Energy efficiency and reducing dangerous pollution can coexist – we see it today. This bill is an important step toward cleaning up the tax code to ensure that American taxpayers no longer subsidize energy sectors that fail to reduce or eliminate pollution.”
“By streamlining the tax code and incentivizing the development of new, cleaner sources of energy, we can both build a 21st century energy infrastructure and address head-on the existential threat of climate change by significantly reducing pollution,” said Senator Menendez. “The Clean Energy for America Act ends the existing temporary patchwork of tax credits and replaces it with a common sense, technology-neutral approach that provides tax incentives and more stability for cleaner energy development across all sectors.”
“By simplifying and streamlining what is currently a very complex assortment of clean energy incentives in the tax code, this legislation will help promote the use of renewable energy, which is vital to combating climate change and supporting job creation,” Senator Hassan said. “I’ll keep working to find innovative ways to invest in cleaner and more efficient energy technology in order to protect our environment and build a stronger, more affordable energy future for our state and country.”
“Climate change poses a serious threat to our environment and economy,” said Senator Kaine. “Through simple incentives that encourage clean energy and conservation, the Clean Energy for America Act will help us move toward a cleaner future.”
“Our state and our country’s continued economic success depend on modernizing our infrastructure and investing in renewable energy. This legislation will help us accomplish both of those goals and put us on a path to a more sustainable future. I’m proud to support this effort, and I will continue working in Congress to address climate change in a way that will improve our environment and strengthen our economy,” said Senator Van Hollen.
Statements from supporters
American Council on Renewable Energy (ACORE)
“We commend Senator Wyden for his leadership in introducing the Clean Energy for America Act, a technology-neutral bill that would at long last modernize the federal tax code for 21st century power generation. The proposal would drive economic growth by creating a level playing field in electricity markets, improving affordability and reliability for consumers, creating plenty of good-paying American jobs, and reducing greenhouse gas emissions. ACORE welcomes the opportunity to work with Senator Wyden and others in Congress to advance the Clean Energy for America Act through the legislative process this year.”—Gregory Wetstone, President and CEO
Alliance to Save Energy
“This is the kind of tax policy we need to drive energy efficiency in the marketplace, and it would pay huge dividends in reducing wasted energy, lowering consumers’ power bills, and ultimately reducing carbon emissions. We want to thank Sen. Wyden for his leadership on climate change and for recognizing the critical role that improved efficiency must play as we work to address this challenge. We look forward to working with him to build bipartisan support for this bill and push it across the finish line.” —Jason Hartke, President
American Biogas Council
“History has shown that energy tax measures do accelerate private sector investment, create new jobs and contribute to the growth of domestically produced energy. But those tax measures have also been technology specific which boosts some industries while placing others at an immediate competitive disadvantage. Senator Wyden’s legislation will level the playing field for all renewable energy technologies and as a result provide a significant acceleration to the biogas industry.”
“This will create an environment where the biogas industry can grow and mature. We appreciate Senator Wyden’s smart solution to this long standing issue. The American Biogas Council salutes these efforts and looks forward to working with Senator Wyden during the 116th Congress.” — Patrick Serfass, Executive Director
American Wind Energy Association
"Senator Wyden’s Clean Energy for America Act includes an innovative technology-neutral tax credit that would move national tax policy in the right direction to reduce greenhouse gas emissions and create long-term stability for businesses to make new investments in American energy production. Congress should seize this opportunity to have a thoughtful conversation about specific policies, like Senator Wyden’s bill, that can meaningfully address climate change through market-based, technology-neutral solutions while keeping costs low for consumers and growing the U.S. economy." —Tom Kiernan, CEO
American Public Power Association
“The Clean Energy for America ensures that all utilities can benefit from incentives intended to encourage investment in, and energy production from, clean energy resources. This is great news for public power utilities and the more than 49 million Americans they serve. The approach developed by Senator Wyden ensures that theses incentives will be delivered effectively and efficiently – to all customers.” —Sue Kelly, President and CEO
Biomass Power Association
"In the absence of a national energy policy, tax policy has become the tool that Congress uses to incentivize new energy production. For too long, tax policy has favored the growth of certain technologies at the expense of other technologies. By basing tax incentives on carbon emissions, Senator Wyden's proposal levels the playing field for new renewable energy production, including for biomass power. It also offers credits for energy storage and carbon capture capabilities paired with biomass plants. We support Senator Wyden's proposal and look forward to helping him build support." —Carrie Annand, Biomass Power Association Executive Director
Energy Storage Association
“We commend Senator Wyden for introducing the Clean Energy for America Act, which includes an investment tax credit for standalone energy storage. Energy storage provides critical grid flexibility, integrates more clean and distributed energy resources, and enhances grid reliability and resilience. If enacted as a key component to the clean energy tax provisions, Senator Wyden's bill will spur accelerated investment in energy storage. Alongside S. 1142 and H.R. 2096, this bill takes definitive steps to move us all toward a more resilient, efficient, sustainable and affordable grid.” —Kelly Speakes-Backman, CEO
“Biofuels are driving innovation and serve as a more affordable, cleaner, and readily-available renewable fuel source for American drivers. Senator Wyden’s legislation rightly signals that renewables will play an important role in our nation's energy future by extending current law in the short term, providing long-term stability for those who produce low-carbon biofuels, and rewarding investments in clean fuel alternatives. With many exciting advancements in cellulosic ethanol and higher-biofuel blends on the horizon, we are pleased to see biofuels included as a key contributor in reducing carbon emissions and providing a greener future for generations to come.”—John Fuher, Vice President of Government Affairs
Plug In America
"The transportation sector is the largest contributor to air pollution today, so we need smart policies to reduce this pollution and clean the air for all Americans. Electric vehicles (EVs) are the solution to reducing air pollution, and modifying the EV tax credit to work for more drivers for a longer period of time is one of these smart policies. We're excited that the Clean Energy for America Act includes this critical policy.” —Joel Levin, executive director for Plug In America.
Solar Energy Industries Association
“Senator Wyden’s legislation would provide a stable and long-term set of incentives and parameters to foster greater deployment of solar energy and technology. The bill is a significant step forward and we commend Senator Wyden for this effort.
“We hope that as the bill moves forward, improvements will be made to its incentives for solar heating & cooling (SHC) technologies, which collect the thermal energy from the sun and use this heat to provide hot water, space heating, cooling, and pool heating for residential, commercial, and industrial applications. Today, Americans across the country are at work manufacturing and installing solar heating and cooling systems that significantly reduce our dependence on fossil fuels. We congratulate Senator Wyden for introducing this important legislation.” –Abigail Ross Hopper, president and CEO
National Hydropower Association
“The National Hydropower Association applauds Sen. Wyden for his leadership in introducing the Clean Energy for America Act and believes several provisions in this bill would jumpstart the deployment of hydropower, marine energy and pumped storage projects throughout the country.
“In particular, NHA supports the creation of long-term technology-neutral tax credits under which hydropower resources would be able to claim full benefit. In addition, the inclusion of an investment tax credit for new pumped storage projects, along with other energy storage technologies, is an important feature of the bill. Finally, NHA is also pleased to see that the bill includes a tax credit bond proposal so that state, local and tribal governments, along with public power providers and rural cooperatives, will also be able to access an incentive that will enable greater project deployment.”
Renewable Fuels Association
“On behalf of the members of the Renewable Fuels Association, we applaud Ranking Member Wyden for his efforts in reforming and improving the current tax incentives for biofuels. Today, our nation’s biofuel producers continue to struggle with the commercialization of advanced and second-generation biofuel technologies as a result of a tax system that continues to favor incumbent and finite, carbon intensive energy sources like oil and gas, and fails to provide a long term solution for incentivizing the production and commercialization of new, clean burning biofuel technologies. Without a long-term tax policy solution, the biofuels industry will continue to face challenges in securing critical investment and developing efficiencies to help it reduce costs and compete against other energy sources that have received, and continue to receive, a lifetime of valuable government and tax support. We believe the Clean Energy for America Act is a step in the right direction. The RFA is committed to a collaborative working relationship with Ranking Member Wyden to develop a long-term tax policy that best helps our industry meet its goals in commercializing advanced and second generation biofuels and biofuel technologies.”
Biotechnology Innovation Organization
“BIO and its members appreciate Senator Wyden’s efforts to develop a long-term tax incentive that is technology neutral and will stimulate investment and growth of biofuels and other forms of clean energy. As Senator Wyden continues developing a long-term solution, we urge Congress to extend the tax incentives for development of advanced and cellulosic biofuels that expired at the end of 2017.”
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