G/SCM/Q2/USA/87  
 
26 September 2022  
(22-7207) Page: 1/2 
Committee on Subsidies and Countervailing Measures  Original: English  
 
 
SUBSIDIES  
REPLIES TO QUESTIONS POSED BY AUSTRALIA1 REGARDING  
THE NEW AND FULL NOTIFICATION OF THE UNITED STATES2  
 
The following communication, dated and received on 26 September  2022, is being circulated at the  
request of the delegation of the United States . 
 
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The United States respectfully provides the following responses to Australia:  
3.5 Biodiesel and Renewable Diesel Credit  
This program provides both a tax credit and income tax credit for biodiesel or renewable 
diesel used as fuel.  
Question 1  
Could the United States please confirm whether this program continues to provide a 
reduction in excise tax.  
Reply : 
With the passage of the Inflation Reduction Act of 20 22, the biodiesel and renewable diesel mixture 
excise tax credits as well as the biodiesel and renewable income tax credits were extended through 
the end of 2024.  Taxpayers can choose to take a tax credit for biodiesel or renewable diesel mixtures 
as an ex cise tax credit or an income tax credit.  The tax credit for pure biodiesel and renewable diesel 
can only be taken as an income tax credit.  
Starting in 2025, the fuel credits are restructured under the new Clean Fuel Production Credit which 
is based on emi ssions factors calculated through lifecycle analyses by fuel type. The credit will be 
available through 2027 and can be taken as an income tax credit with a direct pay option for non -tax 
entities and transferability for all other taxpayers.  
Question 2  
What is the incidence of the excise tax on imported biofuel/renewable diesel compared 
with domestically produced biodiesel/renewable diesel?  
Reply : 
The tax rate on biodiesel and renewable biodiesel used as a fuel is  USD 0.244/gallon for both 
domestically prod uced and imported biodiesel. The biodiesel income and excise tax credits are 
USD 1.00 per gallon of biodiesel or renewable diesel.  No credit shall be determined with respect to 
any biodiesel or renewable biodiesel which is produced outside the United  State s for use as a fuel 
 
1 G/SCM/Q2/USA/83  
2 G/SCM/N/372/USA  G/SCM/Q2/USA/87  
 
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  outside the United States. For purposes of this paragraph, the term "United States" includes any 
possession of the United States.  
4.4 Capital Construction Fund (CCF)  
Question 3  
Are there any conditions attached to eligibility under the program, including for example 
relating to the fishing operations ' levels of fishing income?  
Reply : 
CCF account holders may not take a CCF tax deduction in excess of their eligible fishing income. See 
46 U.S.C §  53505 for the ceiling/maximum on deposi t statutory requirements. Subsection (a) titled 
Maximum Deposits states that the "amount deposited in a capital construction fund for a taxable 
year may not exceed the sum of (1) that portion of the taxable income of the owner or lessee for 
the taxable yea r…that is attributable to the operation of agreement vessels in the foreign or 
domestic trade of the United States or in the fisheries of the United States."  
For construction and acquisition projects fishers can only use CCF funds on a vessel that is rep lacing 
existing harvesting capacity. For reconstructions, the project cannot increase harvesting capacity of 
that vessel.  
8.1 Assistance to Small Shipyards Grant Program  
Question 4  
Does this program include grants for construction, repair or modification o f fishing 
vessels?  
Reply : 
No. Small shipyard grants can 't be used for vessels, the purpose of the program is the help small 
shipyards become more efficient in constructing, reconstructing or reconditioning vessels.  
 
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