Document details "Good," "Bad," and "Mixed Bag" provisions that will impact your heating fuel business
As NEFI reported last week, Senator Joe Manchin has reached a surprise agreement with Senate Majority Leader Chuck Schumer on a 725-page bill called the Inflation Reduction Act of 2022 that includes $369 billion of energy and climate policies. A bill of this size and scope demands detailed analysis and nuanced discussion. It might pass or might not -- no single energy or climate group will be able to change that. What we can do and will continue to do is fight to ensure the best possible political, regulatory and economic outcome for our members.
Before we go any further, please know that your actions have made a real and significant difference. Despite extremely limited resources, NEFI, with the help of its members and supporters, has been able to secure provisions that could benefit the heating fuel industry and give our members a fighting chance in a very challenging political climate. We thank you for making your voice heard and encourage you to continue supporting our efforts on your behalf by donating to the NEFI Advocacy Fund.
Since the bill was announced, NEFI has been working around-the-clock to assess its impacts on our members, consult with leadership on the best course of action, and raise concerns with our allies in Congress. To keep members apprised of the bill's potential impacts on our industry, we have prepared a detailed, eight-page summary highlighting its "Good," "Bad" and "Mixed Bag" provisions. The full document is linked below. Here is a top-line summary:
- A provision that may result in 600 million acres of federal waters for new oil & gas production - more than 4X the entire Gulf of Mexico outer-continental shelf
- $500 million for downstream biofuel infrastructure grants - NEFI succeeded in increasing the grants from 50% to 75% of project costs and ensuring "heating oil distribution centers" are eligible
- 2-year extension of the biodiesel blender tax credit, cellulosic biofuel producer credit, and propane autogas credit
- Creation of a new rebate program for electric heat pumps, albeit at a much smaller funding amount than initially proposed
- Replacement of the biodiesel blender tax credit in 2025 with a new producer credit for "clean transportation fuels" - the NEFI team is actively working to ensure heating fuels are eligible for this new credit
- Creation of a sustainable aviation fuel (SAF) tax credit that may result in increased competition for biofuels
- $600 tax credits for oil boilers and furnaces that meet 2021 Energy Star criteria and are rated by the OEM for use with at least 20% biofuel blends - NEFI succeeded in securing this language in the bill
- $4.3 billion for performance-based energy efficiency rebates, including up to $4,000 for proven energy savings of 20%-34%
NEFI would like to thank all of its members and supporters who responded to our calls-to-action in recent months, resulting in 3,000+ letters delivered to the administration and Congress. Many of the things you called for in those letters -- increased domestic energy production, extension of the biodiesel blender tax credit, tax credits for biofuel-compatible oil appliances -- are included in this bill.
We would also like to thank members of Congress who advocated for renewable liquid heating fuels in talks over the past 18 months, including Ways & Means Chairman Richie Neal of Massachusetts, Ways & Means member Rep. John Larson (D-CT), and Senate Finance Committee Member Maggie Hassan (D-NH).
Please remember: though the bill may or may not pass, in either event, the fight for our industry's future continues. NEFI remains in frequent contact with members of Congress and will continue to do everything possible to preserve our industry's seat at the table in these critical policy discussions.
CLICK HERE TO READ NEFI'S 8-PAGE SUMMARY
CLICK HERE FOR COMPLETE 725-PAGE BILL TEXT
CLICK HERE TO SUPPORT THE NEFI ADVOCACY FUND