From the Director’s Desk: Requiem for a Tax Credit, March Pellet Fuel Data Is HERE, PFI Board of Directors Installs Five New Members, Names Executive Committee
Requiem for a Tax Credit
On the Fourth of July holiday, as he predicted (insisted upon), President Trump signed into law H.R. 1, known officially in the Congressional Record as the “One Big Beautiful Bill Act,” finalizing the end of the appliance tax credit—this and other organizations worked so hard to win, maintain, and extend—as recently as the 10-year runway the credit was awarded in the Inflation Reduction Act of 2022. Looking back on our fly-in this April, the signs were there that this credit might be in peril. It isn’t so much that anyone said this, but we also didn’t hear a single person say, “You don’t have anything to worry about there.” While the text of the budget reconciliation bills hadn’t been written at that time, I think lawmakers understood generally that the clean energy tax credits established in the IRA were being targeted as the “pay-fors” for reviving and making permanent the tax cuts that were slated to expire in 2025, including the R&D tax credit, 100 percent bonus depreciation, and a 20 percent deduction for S-Corporations.
The clean energy tax credits being phased out and eliminated with the passage include:
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Sec. 25E Previously Owned Clean Vehicle Credit
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Sec. 30D Clean Vehicle Credit
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Sec. 45W Qualified Commercial Clean Vehicle Credit
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Sec. 30C Alternative Fuel Vehicle Refueling Credit
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*Sec. 25C Energy-Efficient Home Improvement Credit
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Sec. 25D Residential Clean Energy Credit
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Sec. 179D Energy-Efficient Commercial Buildings Deduction
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Sec. 45L New Energy-Efficient Home Credit
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Sec. 45V Clean Hydrogen Production Credit
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Sec. 6426(k) Sustainable Aviation Fuel Credit
*Wood Stove and Wood Pellet Appliance Tax Credit is within 25C.
The Pellet Fuels Institute was pushing to defend the credit up until the end, reaching out to key Senate offices (Sen. Crapo and Sen. Moore Capito specifically) to remind those offices of the importance of wood pellet manufacturing in their states and the tax credit’s importance to pellet manufacturers.
Additionally, the PFI joined an ad hoc consortium of sorts comprised of a number of other technologies that were included in the 25C tax credit program, including insulation manufacturers, door and window interests, heat pump interests, and the manufacturers of high-efficiency HVAC systems. It is interesting to see how other groups leverage their manufacturing base to appeal to their policymakers, comparing the PFI’s approach to their own.
With the passage of the Big Beautiful Bill and the August recess looming, the PFI is watching closely to see which legislative items Congress picks up next. The Farm Bill is overdue and will either need action after the break or an extension. Our legislative and regulatory affairs team is building a roster of meetings with key agencies for this September to advance our priorities with the Forest Service, the Department of Energy, and the Environmental Protection Agency.
March Pellet Fuel Data is HERE!
March 2025 data (5-year average)
East
Sales – 42,029 (45,196)
Production – 72,768 (89,419)
Inventory – 132,418 (136,037)
West
Sales – 11,253 (28,175)
Production – 27,671 (37,114)
Inventory – (96,855) 36,626
South
Sales – 25,424 (16,812)
Production – 23,134 (16,741)
Inventory – 12,543 (36,650)
All U.S.
Sales – 78,706 (90,182)
Production – 123,573 (144,045)
Inventory – 241,816 (209,306)
On Thursday around noon, the March 2025 data from the Monthly Densified Biomass Fuel Report dropped, providing for the industry a full picture of the first quarter. After an above average January and February in the East, sales came back to the norm with the region posting a slightly below average 42,029 tons (5-year average is 45,196 tons). This brings the Q1 sales number for the East to 229,038 tons, well beyond last year’s 164,738 tons during the same period and the best start to a calendar year in the region since 2020 (229,660). Still, the industry would have loved to see the red-hot start for the year to continue with another above average month.
The West region is just ahead of last year in Q1 (71,687 tons vs. 70,895 tons) but well off the 5-year average for the quarter (99,053).
U.S. total inventory is 241,816 tons, far closer to the 209,306 5-year average than last year’s eye-popping 313,066 tons. If the West were any closer to its normal inventory set-point, the country-wide total would likely be right on the average, but for now the West is showing an inventory position of 96,855 tons, continuing a “well-above normal” trend for inventory in the region that reaches all the way back to December of 2023.
U.S. total production for the quarter was 374,031 tons, or 85% of the 5-year average. So long as inventory positions remain above average, I suspect production numbers to remain beneath 5-year averages.
PFI Board of Directors Installs Five New Members, Names Executive Committee
During the membership meeting at the conclusion of the PFI Annual Conference, we welcomed five new board members to their first term on the board. Joining the board are Alison Snider (Lignetics), Tom Plaugher (W.C. Bradley), Cameron Merrick (Somerset Pellet Fuel), Pat Curran (Curran Renewables), and Matt Klein (Easy Heat Wood Pellets).
The Executive Committee for 2025–26 will be Kenny Lisle, Lignetics (Past Chair); Scott Cummings, Barefoot Pellet (Chair); Matt O’Malley, O’Malley Wood Pellets (Vice Chairman); and Stan Elliot, Pacific Coast Pellets (Secretary/Treasurer).
The Board of Directors celebrated two board retirements as well, saying goodbye to Billy Hoskins (Easy Heat) and Frank Kvietok (Lignetics). Thank you to everyone for their commitment to the Pellet Fuels Institute.
