NBB In Sight

The year 2004 was the most impactful so far in the history of biodiesel development. As we surge forward into 2005, it is appropriate to take a look at the industry's priorities and what might be in store for biodiesel over the next year.

The first part of 2005 is sure to be filled with activities dealing with implementation of the new biodiesel tax incentive, which took effect on Jan. 1. The Internal Revenue Service (IRS) has issued a preliminary guidance document (available on the National Biodiesel Board Web site), but the final guidance will not be available until April or May. The IRS has been working with the National Biodiesel Board (NBB) and has appointed an industry advisory committee to help develop the implementing regulations. Until those regulations are published, biodiesel stakeholders are advised to take a very narrow interpretation of the preliminary guidance and to seek the advice of a qualified tax professional.

Other regulatory priorities in 2005 will include an effort to extend the tax incentive. The tax credit is currently scheduled to expire December 2006. Another regulatory priority will be to work with our allies in the ethanol industry to resurrect the Renewable Fuel Standard (RFS), which was included in last year's failed energy bill.

As the new Congress gears up, work will resume on a new comprehensive energy bill as well as a comprehensive transportation bill. These two pieces of legislation appear to be the most likely vehicles for the tax credit extension and the RFS. Work will also begin in 2005 on the creation of a new Farm Bill, which expires in 2006. The energy title of the 2002 Farm Bill included several renewable energy programs, including the Bioenergy Program.

2005 is also likely to see heavy activity in the area of state legislation. The Minnesota B2 requirement is on schedule to take effect in the summer of 2005, incorporating 2 percent biodiesel blends in all diesel fuel in the state. Likewise, other states are expected to introduce legislation aimed at increased production and use of biodiesel. NBB will work with state, regional and national stakeholders to support state legislation on a case-by-case basis.

Finally, NBB will continue its overall program of research, education and outreach with the petroleum industry, engine and equipment manufacturers, and consumers. While the hard work continues, we can expect biodiesel to thrive in '05.



Joseph Jobe
National Biodiesel Board
Executive Director