[pagebreak:Biofuels Get Shaky Boost]

The U.S. Congress on Thursday managed to enact a $290 billion farm bill that included tax credits and subsidies for biofuels, despite a presidential veto and an embarrassing debacle that omitted a portion of the legislation from the version sent to the president.

But even though the eagerly anticipated biofuels incentives already are officially on the books, their status isn't yet completely secure.

The bill seemed to be moving ahead on Wednesday, when the House of Representatives voted, 316-108, to crush President Bush's veto. The Senate also was expected to override the veto Thursday, making the bill law.

But things went awry when a clerical blunder excluded 34 pages of the legislation - a portion authorizing trade and food aid. Lawmakers discovered the mistake after Bush already had vetoed the bill and quickly found themselves trying to figure out what to do.

On Thursday afternoon, the Senate agreed, in an 82-13 vote, to override the portion of the bill that was vetoed, making it official. The future of the omitted pages is still uncertain, as they have not yet been vetoed and, therefore, can't be overridden.

But biofuel industry watchers claim the incentives that did pass will help boost the commercialization of advanced fuels.

The farm bill provides a $1.01-per-gallon production-tax credit for cellulosic biofuel through 2012, a penny higher than the subsidy on biodiesel, as well as $320 million in loan guarantees to build refineries.

Other industry gains also include $300 million for the production of fuels such as cellulosic ethanol and $70 million for farmers to experiment with sustainable-biofuels crops from 2009 through 2012.

Paul Winters, a spokesperson for the Biotechnology Industry Organization, called the move a win.

"It completes the picture of the energy bill," he said. The energy bill created a 36 billion-gallon market for biofuels.

The farm bill will help investors overcome some of the risk of building refineries to produce advanced biofuels, Winters said. Companies developing such fuels, like cellulosic ethanol and biobutanol, which are made from nonfood biomass, haven't yet been able to produce them on a mass scale or at affordable prices.

In order to restart the process of turning the omitted section of the bill into law, the House passed the entire farm bill again Thursday afternoon by a vote of 306-110, according to CNN.

But it is still unclear how the situation will be resolved.


[pagebreak:Policy Blunders: Continued]

Before the latest House vote, Winters had said legislators would have to repackage the trade and food aid as a standalone bill, or put the entire bill through the whole legislative process again.

If lawmakers choose the latter - which the House actions suggest could be the case -- it is possible the farm bill will be open to renegotiation, Winters said.

But some lawmakers also said they would pass the omitted section as a separate bill, according to the Washington Post.

Even if Congress does decide to start over, Winters expects the biofuel portion of the bill probably will not be altered.

Another Push for Renewable Tax Credits

In the meantime, Congress also is still considering tax credits for the rest of the renewable-energy industry.

On Wednesday, the House passed an incentive package, by a 263-160 vote, that would extend production- and investment-tax credits set to expire at the end of the year. The credits, which must be approved by the Senate and President Bush to take effect, extend various credits anywhere from one year -- in the case of wind production -- to six years for solar investment.

But it is hard to tell whether the House vote is a step forward or just in the same place. The industry has been trying to extend credits for months, but has so far failed to get a bill past both chambers (see Solar Roundup: Another Tax-Credit Proposal, Solar Sharpens Weapons for Incentive Battle, Solar Industry's Five-Step Plan,
Renewable Tax Incentive Still At Risk and Senate Rejects Green Incentives to Pass Energy Bill).

The Solar Energy Industries Association, which has helped spearhead the campaign to extend the tax credits, said the latest bill - called the Renewable Energy and Job Creation Act of 2008 - is the solar industry's last chance to get a multiyear extension this year.

If it fails, the association will push for another bill that would extend the current incentives for one year, said Monique Hanis, a spokesperson for SEIA.

San Francisco Bay Area Gets Carbon Tax
Incentives aren't the only way to push for the adoption of more green technology.

The San Francisco Bay area this week became the first region in the United States to pass a tax on carbon emissions (see Green Light post).

On Wednesday, the board of directors of the Bay Area Air Quality Management District voted 15-1 to start charging businesses 4.4 cents for every metric ton of carbon dioxide they emit starting July 1.

That's peanuts compared to the price of €26 (about $40.88) per ton in Europe that Point Carbon listed Thursday. But the top 10 CO2-polluting companies combined would pay more than $820,000, according to the San Francisco Chronicle.

Iconic greentech leaders, such as former U.S. Vice President Al Gore, have announced they support a carbon tax as a way to help curb greenhouse-causing emissions (see Al Gore Backs Carbon Tax and Schwarzenegger: Federal Government 'Asleep at the Wheel').

Other industry watchers instead favor a cap-and-trade system, which limits the amount of carbon that some companies can emit and sets up an auction for less-polluting businesses to sell credits to heavier polluters.

In October, Sens. Joseph Lieberman, I-Conn., and John Warner, R-Va., introduced legislation that would create a cap-and-trade program in the United States (see New Climate Bill Could Boost Greentech).