10 trade groups ask Congress to extend biodiesel tax credit

By Erin Voegele | February 06, 2019

A group of 10 trade associations, including the National Biodiesel Board and the Advanced Biofuels Association, is urging Congress to pass a multiyear extension of the biodiesel and renewable diesel tax credit.

On Feb. 5, the NBB and the ABFA, along with the American Farm Bureau Federation, the American Trucking Association, the National Association of Convenience Stores, the National Renderers Association, NATSO, the New England Fuels Institute, the Petroleum Marketers Association of America, and the Society of Independent Gasoline Marketers of America, sent a letter to Reps. Nancy Pelosi, D-California; Kevin McCarthy, R-California, Richard Neal, D-Massachusetts; and Sens. Mitch McConnell, R-Kentucky; Chuck Schumer, D-New York; and Chuck Grassley, R-Iowa, asking Congress to “maintain and extend the biodiesel blenders’ tax credit as soon possible.”

In light of Congress’ past practice of retroactively extending the credit, the groups said the biodiesel and renewable diesel industry has been operating on the assumption the credit would be extended, effectively pricing the credit’s value into the cost of doing business. “It is essential that the businesses that have priced product artificially low are made whole,” the letter states. “In addition, we urge Congress to extend the credit prospectively thereby augmenting consumer benefits and encouraging additional investment in clean-burning biofuels.”

Within the letter, the groups stress that the tax credit has helped build a robust biodiesel and renewable diesel industry in the U.S., noting the market has grown from approximately 100 million gallons in 2005 to nearly 2.6 billion gallons in 2017. “The tax credit is an important demand stimulus, which improves plant efficiencies, encourages investment in U.S. distribution infrastructure, and supports high-paying jobs throughout the country, all while incentivizing consumption of fuels that significantly reduce greenhouse gas emissions,” states the letter, noting the credit lowers the price truck drivers pay for fuel and the price of home heating oil.

According to the letter, the uncertainty caused by the on-again, off-again tempo of legislative extensions has somewhat frustrated the sector’s ability to anticipate the availability of the incentives and make the necessary investments. “This severely disrupts access to capital, as well as the ability to hire and expand,” the letter states. The groups urge Congress to act on a multiyear extension of the credit that will provide the biodiesel and renewable diesel industries with long-term certainty.

“With filing season upon us for the 2018 tax year, it is imperative that Congress act quickly to extend this critical tax incentive for the biofuels industry,” said Michael McAdams, president of ABFA, in a statement. “Congress’ on-again, off-again approach to this credit, which has lapsed three times in the past five years, fails to provide the certainty necessary to drive investment for the producers and marketers of these renewable fuels.”

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