Representative Victoria Spartz (IN-05) recently signed a letter, along with 37 other Republicans, to the chairman of the House of Representatives Ways and Means Committee to support the elimination of clean energy tax credits from the Inflation Reduction Act in the upcoming national budget reconciliation bill. The stated goal of the move is, in part, to make room in the budget for maintaining tax cuts backed by President Trump that some experts say disproportionately benefit higher-income Americans. The letter also specifically criticized biofuel credits, while the biodiesel industry alone in Indiana supports over $1.85 billion in economic activity in Indiana and 4,593 jobs.
The Inflation Reduction Act specifically provided a $1.00 per gallon tax credit for the production of over-the-road biofuels including biodiesel and renewable diesel. Indiana is the sixth largest biodiesel producer in the nation, having produced 100 million gallons of biodiesel in 2020. As such, removing the tax credit would add up to a multimillion dollar loss for the state.
Indiana is also the fourth largest soybean producer in the nation, having produced around 20,304,000,000 pounds in 2021. 289 million pounds of soybean oil went towards biodiesel production.
“Despite our previously unified stance, some Members of our conference now feel compelled to defend wind and biofuel credits, advocate for carbon capture and hydrogen subsidies, or protect solar and electric vehicle giveaways,” the letter said. “Keeping even one of these subsidies opens the door to retaining all eight. How do we retain some of these credits and not operate in hypocrisy? The longstanding Republican position has been to allow the market to determine energy production. If every faction continues to defend their favored subsidies, we risk preserving the entire IRA because no clearly defined principle will dictate what is kept and what is culled.”
According to James Grimes, group leader of the Indianapolis chapter of Citizen’s Climate Lobby, these tax credits have been extremely effective at lowering emissions.
“[Citizen’s Climate Lobby] has strongly advocated that these tax credits should be left in place because they account for around 50% of the emissions reductions the IRA was designed to achieve,” said Grimes.
The full letter signed by Spartz can be found below.
