Policy Stability for the Biodiesel Industry

By The National Biodiesel Board | April 15, 2020

During the closing days of December, the National Biodiesel Board achieved a long-sought policy victory—a multiyear extension of the biodiesel tax incentive. The industry began the new year with a sense of certainty and a focus on resolving issues with the Renewable Fuel Standard and small refinery exemptions (SREs).

“Renewing the tax incentive was a top priority throughout 2019,” said Kurt Kovarik, NBB vice president of federal affairs. “NBB is grateful to the unified front and collective voice of the industry that helped make this continued growth possible.”

NBB united producers, heating oil companies and other associations to emphasize the urgent need for a multiyear extension. NBB organized multiple letters, press events and Capitol Hill visits to highlight the issue.

The industry’s leading champion, Sen. Chuck Grassley, R-Iowa, insisted that Congress’ end-of-year spending deal renew the tax incentive. On the House side, Rep. Abby Finkenauer, D-Iowa, led a group of congressmembers to keep the credit renewal front and center for her party’s leaders, Speaker Nancy Pelosi, D-California, and Rep. Richard Neal, D-Massachusetts, House ways and means committee chairman. And Sen. Joni Ernst, R-Iowa, ensured that the White House understood the importance of including the credit in the deal.

“On behalf of NBB members, I’d like to thank Sen. Grassley and Rep. Finkenauer as well as many other senators and representatives from both sides of the aisle for their strong and consistent championship of our industry,” Kovarik said. NBB is also urging producers to express their thanks by inviting representatives and senators to visit and tour production plants to see firsthand the success of the policy.

The tax credit is now in place through 2022. The IRS has issued guidance and begun to process claims for the credit for 2018 and 2019, setting an Aug. 11 deadline for submitting those claims.

NBB has also secured some policy advances in other areas. Since winning a trade case in 2017, NBB has fought to maintain antidumping and countervailing duty rates on Argentine and Indonesian biodiesel imports. The duties stopped those countries’ unfair trade practices that harmed U.S. producers. While the U.S. Department of Commerce and U.S. Court of International Trade have been reviewing the duty rates, they have kept them in place. The commerce department has been open to evidence from NBB’s Fair Trade Coalition that the rates are still important to prevent a resumption of unfair trade.

More recently, USDA and Agriculture Secretary Sonny Perdue followed through on a promise to support infrastructure projects that facilitate higher biofuels blends. This promise was part of the White House’s October deal to mitigate the damage done to biofuel producers and the RFS from SREs. NBB worked to ensure that biodiesel was included in that deal. USDA launched an Ag Innovation Agenda and a Higher Blends Infrastructure Incentive Program that will help boost B20 and higher blends. Starting in May, the HBIIP will make available $100 million in matching grants for infrastructure projects; at least $14 million is intended specifically for biodiesel.

NBB continues to coordinate with other biofuel associations to advocate for an end to EPA’s abuse of SREs. The industry’s primary goal for 2020 is to convince EPA to reverse the damage to the program and resume growth in the volumes for biomass-based diesel and advanced biofuels.

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