NBB pushes 5-year biodiesel tax extension, House version introduced

Posted November 17, 2009

Members of the National Biodiesel Board (NBB) called on lawmakers to extend and reform the biodiesel tax incentive.

"The biodiesel tax incentive is working. Since its enactment in 2004, U.S. biodiesel production has reached commercial scale, and the nation has realized the job creation, environmental and energy security benefits that come with the expanded production and use of biodiesel," stated Manning Feraci, NBB's vice president of federal affairs. "These benefits will simply be lost if the credit lapses."

The $1 per gallon biodiesel tax incentive encourages the use of biodiesel by making the fuel price competitive with petroleum diesel fuel in the marketplace. The incentive is currently set to expire on December 31, 2009. Absent the biodiesel tax incentive, the use of biodiesel in the marketplace will be cost prohibitive, and the domestic production and use of biodiesel will cease.

During visits with lawmakers, biodiesel industry leaders expressed strong support for S. 1589, the Biodiesel Tax Incentive Reform and Extension of Act, introduced by Senators Maria Cantwell (D-WA) and Charles Grassley (R-IA), and H.R. 4070, companion legislation introduced yesterday by Representatives Earl Pomeroy (D-ND) and John Shimkus (R-IL). This legislation would reform the biodiesel tax incentive by changing the current blenders excise tax credit to a production excise tax credit. This will improve administration of the incentive, eliminate potential abuses and improve tax compliance. The proposals would also extend the biodiesel tax incentive for five years, providing the certainty entrepreneurs need to create jobs and expand the use of biodiesel.

"Biodiesel use is consistent with a policy that values the creation of green jobs and expanded use of low carbon fuels. The tax incentive plays an integral role in achieving these goals, and it is vitally important that Congress extend this worthwhile, effective incentive," concluded Feraci.