New bills offer hope for biodiesel tax credit

Posted July 28, 2010

The latest chance for a biodiesel tax credit extension, H.R. 4213 or the Unemployment Extension Act of 2010, passed without the biodiesel tax credit extension included. For months, the $1 per gallon biodiesel tax credit, which expired on Dec. 31, was included in H.R. 4213, but now the extension, led again by the support of Sen. Chuck Grassley, R-Iowa, must seek a new avenue to give the industry much needed relief. Grassley, who first introduced the extension legislation nearly a year ago with Sen. Maria Cantwell, D-Wash., and has since tried multiple times to pass it, has now introduced an amendment to the Small Business Bill currently under debate in the senate.

On July 26, the House ways and means committee, which has solo jurisdiction over matters relating to taxation, released a draft of The Domestic, Manufacturing and Energy Jobs Act of 2010. This package contains an extension of the biodiesel tax credit for 2011. The summary states, "The proposal would reinstate for 2011 the per gallon tax credits and outlay payments for biodiesel and renewable diesel. The extension of these tax credits and outlay payments for 2010 has previously passed both the House of Representatives and the Senate at different times but has not become law. The extension for 2010 would be incorporated into this legislation if that extension has not been enacted by the time this legislation is considered. This proposal is estimated to cost $1.108 billion over 10 years."

Neither the ways and means committee nor the full House are expected to consider this legislation prior to the August recess, which, for the House, is scheduled to begin the week of Aug. 2.

"This noncontroversial, nonpartisan provision for clean, green energy is being held hostage," Grassley said in a statement on the stripping of the biodiesel tax credit extension from H.R. 4213. "I'm trying, once again, to put Americans back to work in this clean, renewable fuel industry." Grassley has also described the failure to extend the tax credit as devastating, noting that an estimated 29,000 biodiesel-related jobs were lost due to uncertainty. His Washington D.C. office told Biodiesel Magazine however, that he will continue to fight for biodiesel.

The National Biodiesel Board continues the fight as well. Manning Feraci, vice president of federal affairs for the NBB, wrote a letter to Sen. Harry Reid, D-Nevada, to address the energy package Reid outlined on July 22. "The U.S. biodiesel industry notes your interest in displacing petroleum use in heavy duty highway applications. The most reliable, immediate way to achieve this worthwhile objective is to include a retroactive, multiple year extension of the biodiesel tax incentive in the upcoming energy bill," the NBB letter said. The letter went on to say that the continued lapse and uncertainty regarding the federal government's commitment to advanced biofuels like biodiesel, directly undermines the nation's ability to displace petroleum diesel fuel.

"Accordingly," the letter ended, "the NBB respectfully asks that this common sense proposal ultimately be included in forthcoming energy legislation." While the tax extension may pass in accordance to either the Small Business Bill or the paired down energy legislation from Reid, Grassley's office also said tax legislation expected towards the end of the year may offer another opportunity for the biodiesel tax credit.