NBB In Sight

Attacks on biodiesel are a measure of its success
By Joseph Jobe | August 01, 2005
Four years after President Bush first called for renovation of America's energy policy, Congress answered. His signature on the Energy Bill, which was expected in early August, will seal the deal on extending the biodiesel excise tax credit through 2008, capping off the most successful four seasons for biodiesel that the industry has ever seen.

Extending the tax incentive through 2008, just seven months after it was first instituted, is our greatest victory in the Energy Bill. Although the Senate's version of the bill would have extended the tax credit through 2010, the date was shortened to keep the cost of the program down so conferees could comply with the agreed upon overall cost of the tax title. Nevertheless, supporters should be proud that they accomplished this critical task so soon. Extending the tax incentive demonstrates that the government is behind biodiesel for the long run.

That backing will build confidence in the industry in the form of plant investment, infrastructure investments from the petroleum industry and user commitment.

This extension wouldn't have happened without the leadership of Sen. Chuck Grassley, R-Iowa, who serves as Senate Finance Committee chairman and was a member of the Energy Bill Conference Committee. Sens. Blanche Lincoln, D-Ariz., and Jim Talent, R-Mo., were the chief sponsors of the extension, with Rep. Kenny Hulshof, R-Mo., leading the charge in the House.
Among other key biodiesel provisions in the Energy Bill:

-Renewable Fuel Standard (RFS)-establishes a renewable fuel content requirement for the nation's fuel pool. Mandates
7.5 billion gallons of renewable fuels by 2012. Ethanol is the primary focus, but biodiesel is also defined as an eligible
renewable fuel. A compliance credit trading program is also established under the RFS. The EPA Administrator is tasked
with promulgating the implementing regulations, including appropriate credits for biodiesel.

-Credit for Installation of Alternative Fuel Refueling Infrastructure-installation of infrastructure that dispenses biodiesel
blended fuel (B20 minimum) qualifies.

-Small Agri-Biodiesel Producer Tax Credit - establishes a 10 cents-per-gallon tax credit for agri-biodiesel producers. The
credit is applicable up to 15 million gallons of agri-biodiesel produced by a plant with capacity no longer than 60 mmgy.

- Biodiesel Engine Testing Program-provides $5 million-per-year funding authorization (FY 2006-2010) to initiate a
collaborative research project testing biodiesel in advanced diesel engine and fuel system technologies.

Another critical win came for biodiesel in the Transportation Bill, which passed the same day as the Energy Bill. Sen. Kit Bond, R-Mo., chairman of the Senate Transportation and Infrastructure subcommittee and long-time biodiesel champion, secured an $8 million program for biodiesel engine testing under the umbrella of NBB. This funding is critical to ensure acceptance of biodiesel in the clean diesel technology slated to begin hitting the market in 2007.

We must all thank our champions in Congress who made this happen. For those of you who called on your members for support, please let them know your appreciation for this success. Many people came together to make this happen including the NBB regulatory team, industry members, and allied organizations too numerous to mention. However there is one group that must be mentioned, and that is the American soybean farmer. Soybean farmers are very well represented by their state and national checkoff organizations, which helped develop the biodiesel industry. This legislative victory is due in very large part to the magnificent policy leadership of the American Soybean Association.

Thank you to everyone who helped in this historic achievement.

Joseph Jobe
National Biodiesel Board
Executive Director
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