The tax extenders package that includes the two-year retroactive extension of the $1 per gallon biodiesel and renewable diesel blenders tax credit was passed by both chambers of U.S. Congress as one of the legislative branch’s last items for the session. The biodiesel blenders tax credit will be retroactive to Jan. 1, 2015, and in effect through Dec. 31, 2016. It is expected to head to President Obama’s desk for signing within days.

While U.S. biodiesel producers and the National Biodiesel Board had high hopes the incentive would pass as a reformed production vs. a blender credit, the sector will continue the fight next year to educate lawmakers on the benefits of the restructuring.

“While this is a missed opportunity to reform this tax incentive, biodiesel plants across the country will have a greater degree of predictability and stability under this extension, allowing them to continue delivering good-paying American jobs, cleaner air and a more diversified fuels market that strengthens our energy security,” said Anne Steckel, vice president of federal affairs for the NBB. “We want to again thank our supporters in Congress for pushing this forward, particularly Sens. Chuck Grassley, R-Iowa, and Maria Cantwell, D-Washington, and Reps. Kristi Noem, R-South Dakota, and Bill Pascrell, D-New Jersey. We will continue pushing to reform this as a producer’s credit next year to ensure that U.S. tax dollars are supporting U.S. workers and productivity.”

The CEO of the largest U.S. biodiesel producer, Renewable Energy Group Inc., said he is pleased with and thankful for the extension. “With the president’s signature, this worthwhile incentive, combined with higher RFS biomass-based diesel volumes, will reinforce our company’s continuing growth by encouraging higher blends and usage of advanced biofuels throughout North America,” said Daniel J. Oh, CEO of REG. “We owe a large debt of gratitude to our bipartisan congressional champions, in particular Sens. Charles Grassley and Maria Cantwell. Their commitment to our industry has been constant and unwavering. We will continue to work with them and our industry partners to advocate for a conversion to a producer’s tax credit in the future because we believe that is how this credit should be structured.”

Grant Kimberley, executive director of the Iowa Biodiesel Board, said he is grateful the bill reinstates the biodiesel tax credit and extends it through the next 12 months for the first time in many years, but he is also disappointed Congress did not follow Sen. Chuck Grassley’s lead in restructuring the credit to go to actual biodiesel producers.

“Our state’s biodiesel producers will have some degree of business clarity in the 2016 landscape, rather than gambling on whether it will be reinstated retroactively,” Kimberley said. “That’s a major step forward in creating stability for this truly American energy industry. We’re glad Congress recognized its importance. Making it a producer’s credit would ensure that foreign-made biodiesel would not be eligible for the credit, better-fulfilling Congress’s original intent with establishing this policy. We hope closing this loophole will still happen in future years.”