Green Scissors concerned about new clean fuel production credit subsidizing dirty biofuels

The Green Scissors coalition of taxpayer and environmental advocates submitted comments on the clean fuel production credit, which was established by the Inflation Reduction Act to replace the biodiesel tax credit in 2025. In these comments, Friends of the Earth, R Street Institute, Taxpayers for Common Sense, U.S. PIRG, and Environment America sound the alarm with concerns that implementation of the new credit will subsidize first generation food-based biofuels.

The coalition raises particular concern that this credit could devolve into VEETC 2.0, an ethanol tax credit that was phased out in 2011 due to bipartisan opposition. Ethanol and other first generation biofuels are proven drivers of increased emissions, with land-use impacts that threaten carbon-rich wetlands, forests, and grasslands, higher food and fuel costs, and more.

“Congress did not intend for first-generation, food-based biofuels to qualify for the new clean fuel production credit, nor did Congress intend for the ethanol tax credit – VEETC – to rise from the dead” the comments read. “Implementation of this provision must not waste taxpayer dollars on special interests and mature industries that have received taxpayer support for more than four decades.”

Founded in 1994, the Green Scissors coalition works to eliminate government spending that is both economically wasteful and harmful to the environment.