NY Bioheat tax credit extended for five years
New York Gov. Andrew Cuomo has signed legislation into law extending the state’s Refundable Clean Heating Fuel Tax Credit for five years. The personal tax credit, which allows residential Bioheat users to claim 1 cent per gallon for each percent of biodiesel up to a B20 blend, was set to expire at the end of the year.
According to Danny Falcone, regional wholesale manager at Ultra Green Energy Services, the extension of the tax credit is extremely important to the growth of the local Bioheat market. Incentives are needed to help an immature market compete, he said. “This incentive became vitally important [to the biodiesel market in New York], and still is today,” Falcone said, adding that the residential tax credit helps incentivize more customers to try the fuel.
While the public and private sectors are cutting jobs all around the country, Falcone said that by extending the Bioheat tax credit the state of New York has made an important decision to support the growth of alternative energy. “You’ve got a state saying we are going to invest, and we are going to pay back the consumer money if they [reduce] their carbon footprint and take sulfur out of the air,” he said.
While biodiesel in the New York market is currently price below fuel oil, Falcone said the tax credit helps ensure that Bioheat blends will continue to be affordable in the event the federal tax credit is not extended or RIN prices drop. In the meantime, the reduced price of most B20 blends coupled with the state tax credit should help drive more interest in biodiesel-blended fuels, both at the consumer and retailer levels.
Since the tax credit directly benefits consumers, it also creates a more significant impact at the consumer level. Since many other incentives, such as the federal blend credit, for biodiesel benefit entities in the middle market, some of the financial benefit is often bled off before it reaches the consumer level. “This is a very exciting credit,” Falcone said. “It goes right to the consumers.”