Wyden, colleagues introduce legislation to overhaul energy tax code to reduce carbon emissions
Sen. Ron Wyden (D-OR), ranking member of the Senate Finance Committee, and 25 colleagues recently introduced a bill that would overhaul the federal energy tax code to support a low-carbon economy.
The bill, the Clean Energy for America Act, would consolidate the current 44 energy incentives into three technology-neutral provisions that incentivize clean electricity, clean transportation, and energy efficiency.
“The federal tax code is woefully inadequate to address today’s energy challenges,” Wyden said. “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.”
The bill would provide a production tax credit (PTC) or investment tax credit (ITC) to facilities that are at least 35 percent cleaner than average. The maximum PTC for facilities with zero carbon emissions would be 2.4 cents per kilowatt hour. The maximum ITC would be 30 percent.
“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,” Tom Kiernan, CEO of the American Wind Energy Association (AWEA), said. “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.”
The bill would provide for a tax credit for fuels that are at least 25 percent cleaner than average to encourage clean transportation. The maximum credit would be $1 per gallon for fuels with zero carbon emissions. The bill would also eliminate the per-manufacturer cap on the tax credit for electric vehicles and extend the credit for fuel cell electric vehicles.
The bill would also provide a performance-based tax credit for energy efficient homes and tax deduction for energy efficient commercial buildings to incentivize energy conservation. The value of the tax credit would increase as more energy is conserved.
“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,” Gregory Wetstone, president and CEO of the American Council on Renewable Energy (ACORE), said. “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.”
