Senate passes tax extenders; biodiesel credit to be reinstated

In a 76 to 16 vote, the U.S. Senate on Dec. 16 passed the tax extenders package that the House passed earlier this month, which includes the $1 per gallon biodiesel and renewable diesel tax credits. The tax credits will be stated retroactively back to Jan. 1, 2014, and is good only through Dec. 31 of this year. President Obama is expected to sign the legislation within days.

While the biodiesel industry is appreciative of the reinstatement, many are calling on Congress to revisit the issue early in the New Year to provide more stability in investment.

“Clearly these tax incentives have tremendous bipartisan support when you look at the votes in both the House and Senate,” said Anne Steckel, vice president of federal affairs for the National Biodiesel Board. “So while we appreciate Congress passing this bill, we would urge lawmakers to quickly take up forward-looking, longer-term extensions early in the New Year so that we can continue the momentum in 2015 and beyond. The biodiesel tax incentive creates jobs and economic activity in communities across the country, and there's no reason to have this sporadic tax law when clearly it is a policy that makes sense and enjoys broad support on both sides of the aisle.”

“We are pleased that the Senate finally voted on the reinstatement of the biodiesel tax credit,” Nicholas Ng, president and co-founder of Methes Energies Canada Inc., told Biodiesel Magazine. “This will result in us getting back a substantial amount of money for biodiesel sold in 2014. This will also strengthen our cash position. In all, this is great news for us and the industry.” 

The American Soybean Association’s new president Wade Cowan, a farmer from Brownfield, Texas, said, “Today's passage of the tax extenders bill is a welcome relief to farmers as we close our books on 2014. While it's not the long-term fix we need, the legislation does include the dollar-per-gallon biodiesel tax credit, expensing for farm equipment and infrastructure under Section 179, and bonus depreciation on farm assets, all of which provide greater certainty and a more stable climate for the farmers and producers who make use of these programs.” He encouraged both chambers of Congress to come together and find a solution that extends these beneficial provisions for the long term. “What we need is certainty in the tax code, not a guessing game,” Cowan said.

Novozymes Americas President Adam Monroe also urged Congress to provide the biotech industry with a stable business environment next year by passing a long-term extension of the research and development tax credit. He also called on Congress to pass long-term extensions for second generation biofuels credits.

“When Congress creates stable and supportive tax policy, the biotech industry responds by investing in research and development, creating new jobs and building facilities that fuel innovation,” Monroe said. “The great thing about these tax credits is that they allow companies like ours to speed up our investments. That means we can put local people to work faster in our labs and our production plants. It means we can bring economic development more quickly to the community.”

Monroe added that the extenders package passage shows Congress recognizes the need to continue successful tax policy. “We are disappointed, however, that they have chosen such a makeshift solution,” he said. “Temporary fixes such as this create an uncertain investment outlook. Next year, Congress has a chance to provide the biotech industry with a long-term framework and we look forward to working with them.”