It's Back

By Ron Kotrba | January 11, 2011

A month ago, as I wrote the January issue’s Editor’s Note, the fate of the U.S. biodiesel tax credit was uncertain while the lame-duck Congress worked on a monster tax bill that included the subsidy. But we’ve seen that before—all throughout 2010 the credit was in, then stripped out, then in another bill, then stripped out again—so gun-shy biodiesel industry stakeholders were not convinced this last attempt would pan out, and there was still a real possibility of entering the new year without the incentive. But in the 11th hour, the bill was ushered through the House and Senate, and signed by President Obama the following day.

As soon as the credit was signed into law, Biodiesel Magazine staff editors and I picked up the phones and talked to producers, to get their thoughts on the credit being reinstated retroactively to Jan. 1, 2010. We got a lot of great responses, interesting insight and ultimately mixed reactions on the one-year extension, now good through 2011. Some producers banked on the reinstatement all along, and sold B99 in anticipation of getting paid back by the government. Others weren’t so trusting, and stopped selling B99 for B100 instead, passing the risk onto buyers. Of course, some producers stopped producing altogether, and the even less fortunate ones went out of business during the past year. All the people we spoke with, however, despite how different their stories or experiences within the past year, have serious concerns over the lack of a long-term policy goal with respect to biodiesel, and fear the industry will be in the exact same position next year if it cannot convince Congress to support and pass a multiyear biodiesel incentive and the EPA to increase the biomass-based diesel volume requirements of RFS2. For the full story, check out the article we compiled on page 10 of this issue.

Speaking of this issue, if you’re reading this in early February, there is a good chance you are doing so in sunny Phoenix, at the National Biodiesel Conference & Expo. I look forward to attending it, as I have for the past five years, and hearing the most recent developments and trends in the biodiesel industry. We will be writing reviews from the conference, so if you can't make the show, stay tuned to for our coverage of the latest information and breaking news. Also, look for our April print issue, in which we will review the event’s general and breakout sessions.

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