The rocky road leading to the biodiesel tax credit extension continues to take new turns. For months, the extension was included in H.R. 4213, or the Unemployment Extension Act of 2010, but the version signed by the president in July failed to include the extension. Now, the hope for the tax credit again rests with Congress, and proposed legislation offers the newest path for the struggling biodiesel industry.

U.S. House ways and means committee chairman Sander Levin, D-Mich., introduced a draft of legislation July 26 titled, the Domestic Manufacturing and Energy Jobs Act of 2010. Aimed at making investments in domestic manufacturing of clean energy technologies while providing long-term support for renewable energy, the legislation includes a provision to extend the biodiesel tax credit "if that extension has not been enacted by the time this legislation is considered." The proposal would also reinstate for 2011 the per-gallon tax credits for both biodiesel and renewable diesel.

"As the world moves toward renewable energy and a greener economy, it is necessary to accelerate a new era of American manufacturing and innovation," Levin said about his legislation. The bill, if enacted, would cost $1.108 billion over 10 years, according to the draft. "We must not let this opportunity pass us by. I will continue to work with my colleagues in the House and Senate, as well as the administration, to enact legislation," Levin added.

Levin's proposal is only one route for the extension, however. Sen. Chuck Grassley, R-Iowa, has tried multiple times to pass biodiesel legislation. His latest attempt, an amendment to the Small Business Bill in June, is currently under debate in the Senate. "This noncontroversial, nonpartisan provision for clean, green energy is being held hostage," Grassley said. "I'm trying, once again, to put Americans back to work in this clean, renewable fuel industry." Along with Grassley, Sen. Blanche Lincoln, D-Ark., has also submitted a biodiesel tax extension amendment to the Small Business Bill. The legislation remains stalled in the Senate, however, as Sen. Mitch McConnell, R-Kty., and Sen. Harry Reid, D-Nev., struggle to agree on the number of amendments the Senate will vote on with the bill. But, both sides did agree to include the biodiesel amendment proposed by Lincoln in the bill.

Although the biodiesel tax extension has received support from both the house and senate, the political positioning and jockeying by certain key members pushing for large bills continues to stand in the way. Reid, who stated the country's need to reduce dependence on foreign oil when he introduced his energy legislation, failed to include any provisions for a biodiesel tax extension.

The National Biodiesel Board tried to convince Reid on the importance of the biodiesel extension holding a place in the energy bill. Before Reid introduced the first version of an energy bill, NBB vice president of federal affairs, Manning Feraci, wrote a letter to Reid outlining the need for the extension. "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," Feraci wrote. The lapse of the tax incentive and uncertainty by the federal government to commit to advanced biofuels like biodiesel undermines the nation's ability to displace petroleum diesel fuel, he added. "Accordingly, the NBB respectfully asks that this common sense proposal ultimately be included in forthcoming energy legislation."

Immediately following the reinstatement of the biodiesel tax incentive, the industry will experience a significant resurgence, according to Michael Frohlich, federal director of communications for the NBB. "Demand will increase, idle plants will begin to operate again, and there will be a dramatic expansion in the overall production of biodiesel," Frohlich added. "Like any business, the biodiesel industry needs certainty."