Federal Affairs Efforts Remain Key Focus in 2019

The National Biodiesel Board continues to work closely with its members and allies to advocate federal policies that support growth of the industry. Securing an extension of the biodiesel and renewable diesel tax incentive, which expired at the end of 2017, is an urgent priority.

In early February, NBB members traveled to Washington, D.C., to meet with their representatives and senators. In nearly 50 meetings over a two-day period, biodiesel producers and soybean growers urged legislators to renew the biodiesel and renewable diesel tax incentive as soon as possible. They discussed the financial challenges that the industry is already facing due to the lapse of the tax credit.

The meetings produced a positive outcome. On Feb. 11, Reps. Dave Loebsack, D-Iowa, and Darin LaHood, R-Illinois, and 42 other representatives sent a bipartisan letter to their leaders urging a multiyear extension of the biodiesel tax incentive as soon as possible. In support of the biodiesel industry, members of Congress from across the country—from California to New York—signed the letter to House Speaker Nancy Pelosi, D-California; Republican Leader Kevin McCarthy, R-California; Majority Leader Steny Hoyer, D-Maryland; and Republican Whip Steve Scalise, R-Louisiana.

“We strongly support a multiyear extension of the incentive to provide the policy certainty necessary to help the biodiesel industry and rural economies continue to grow,” the letter states.

Many groups have written to ask that Congress make it a priority to extend the tax incentive at the earliest opportunity. In a March letter to Pelosi and McCarthy, members of the California Advanced Biofuels Alliance wrote, “The uncertainty created by the lapse of the biodiesel tax credit is slowing investments in new plants and raising the costs of projects to maintain, improve or expand existing plants.”

The effort to convey a sense of urgency to Congress also paid off. Sens. Chuck Grassley, R-Iowa, and Ron Wyden, D-Oregon, chairman and ranking member of the Senate finance committee, respectively, introduced legislation that would provide a two-year extension of the biodiesel and renewable diesel tax incentive.

“We hope that both House and Senate will address the expired tax provisions as soon as possible,” said Kurt Kovarik, NBB’s vice president of federal affairs, while thanking the senators. “Biodiesel producers have counted on the credit to secure blending contracts and financing for plant expansions and upgrades. But they are now facing the longest period of uncertainty ever, as the tax incentive remains expired two full months after the start of the year.”

The House ways and means committee is now beginning a process to consider all expired tax incentives, with the first hearing held March 12.

NBB Fair Trade Coalition
Additionally, NBB’s Fair Trade Coalition continues efforts to ensure that the U.S. maintains a level playing field for domestic producers to compete with imported biodiesel. In early 2018, the U.S. Department of Commerce issued countervailing duty and antidumping orders on imports of certain biodiesel products from Argentina and Indonesia. The move followed an extensive trade investigation showing that the countries were subsidizing their domestic industries and selling their biodiesel significantly below fair market value. Then in December, the commerce department initiated “changed circumstances” reviews to assess Argentina’s most recent modification to its export tax regime and whether a review of the U.S. antidumping and countervailing duty orders is warranted.

NBB worked to raise awareness of the situation. In late February, a bipartisan group of 14 senators, led by Grassley and Sen. Maria Cantwell, D-Washington, wrote to Secretary of Commerce Wilbur Ross. “It is unclear why Commerce would afford a special review to Argentina and its biodiesel industry when the ink on these antidumping and countervailing duty orders is barely dry,” the group of senators states in the letter.

The letter was co-signed by four other senators from the finance committee, which oversees issues with international trade. The senators asked Ross to develop a complete record of Argentina’s biodiesel trade actions before determining whether revisiting the U.S. duties is warranted.

“In the short period since the antidumping and countervailing duty orders were imposed, U.S. biodiesel producers have been able to compete on a more level playing field, and the U.S. biodiesel industry has begun to recover from the injury caused by the unfair trade practices of the Argentine government and industry,” the letter states. Domestic biodiesel production increased by 17 percent, or more than 300 million gallons, in 2018 compared to 2017.