Reinstatement of Biodiesel Tax Credit is Top Priority

“This last year has been a huge struggle for our industry with the economic recession, the credit crunch, volatile oil prices, the blocking of export markets and the delayed implementation of RFS2. Even with the tax credit in place 2009, it was really tough,” said Joe Jobe, CEO of the National Biodiesel Board (NBB), at the opening session of the National Biodiesel Conference. “We thought it couldn’t get worse, but for the last 39 days we had neither the tax credit or the RFS2 (Renewable Fuel Standard 2) in place. The industry has shut down. Businesses are going under and jobs are being lost. Retroactive reinstatement of the $1 per gallon biodiesel blenders tax credit is the National Biodiesel Board’s top priority.” Jobe’s comments were met with cheers by conference attendees.

See for Yourself participant Ron Obermoller, a soybean grower and director of the Minnesota Soybean Processors biodiesel plant in Brewster, Minn. contends, “without the tax credit the industry won’t survive.”  He noted that farmers are losers too, “Since we lost the blenders credit, the price of soybeans in our area is down $1.50 per bushel and still dropping. It’s all related to biodiesel losses.”

Jobes expressed hope, “Washington’s focus has shifted from health care to jobs and the economy so I believe that Congress will reinstate the credit as part of a bipartisan jobs bill in the next few weeks. In addition, Senators Chuck Grassley and Max Baucus have said the bioediesel tax credit is a high priority for them.”

Once that’s accomplished NBB will work on a 5-year extension to the biodiesel producer tax credit.  Many biodiesel producers say that’s needed because banks aren’t willing to lend capital  to them based on a single year extension of the tax credit.

EPA’s RFS2 final rule, announced on Feb. 4, is very good news for biodiesel. “It took enormous effort by the NBB to ensure biodiesel was included in the renewable fuel standard,” Jobe said. “EPA acknowledged that NBB’s comments were the most substantive and impressive that they’ve ever received.”  This resulted in a workable program that will result in 700 million to 1 billion gallons of biodiesel being used this year  — double last year’s production.