Bipartisan Budget Act of 2018 extends several alternative fuel tax credits

February 9, 2018. President Donald Trump has signed into law the Bipartisan Budget Act of 2018, a long-term budget agreement that includes extensions of lapsed tax credits for alternative fuel vehicles and refueling infrastructure retroactively for 2017.

   For the alternative fuels sector, the bill includes extensions for tax credits that had expired at the end of 2016. This includes provisions for new qualified fuel cell vehicles; non-hydrogen alt-fuel vehicle refueling properties (hydrogen refueling infrastructure was already eligible for the tax credits); biodiesel and renewable diesel; second-generation biofuel producers; and two-wheeled plug-in electric vehicles (EVs).

   Importantly, the bill also reinstates the $0.50/gallon alternative fuels tax credit (AFTC). As explained by the Alternative Fuels Data Center (AFDC), part of the U.S. Department of Energy’s Vehicle Technologies Office, the incentive, which had expired on Dec. 31, 2016, is applicable to fuel sold or used through Dec. 31, 2017. The tax credit is available for “natural gas, liquefied hydrogen, propane, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and compressed or liquefied gas derived from biomass.”

   The AFDC notes that the Treasury will issue guidance for how to submit claims by March 11. Claims can be submitted for a 180-day period beginning no later than 30 days after the Treasury issues guidance; the claims will be paid no later than 60 days after receipt, says the AFDC.

   To help pay for the broader legislation, Congress has ordered the sale of 100 million barrels of crude oil from the Strategic Petroleum Reserve (SPR). This includes the sale of 30 million barrels during fiscal years 2022 through 2025; 35 million barrels during fiscal year 2026; and 35 million barrels during fiscal year 2027. It also authorizes the Department of Energy to sell-off $350 million worth of crude oil this year to help fund continued security enhancements and infrastructure modernization of the SPR.