The National Biodiesel Board (NBB) and the Advanced Biofuels Association (ABFA) have released a joint letter to Senate leadership urging the chamber to retroactively extend the biodiesel, renewable diesel, and alternative fuels tax credits through 2011 before adjourning for the upcoming midterm elections.
“The lapse of the biodiesel tax incentive and the Senate’s subsequent inability to address this issue has killed thousands of jobs and has made America more dependent on foreign oil,” said Manning Feraci, NBB’s Vice President of Federal Affairs. “Before the Senate goes home to campaign, it should do the right thing and seamlessly reinstate the biodiesel tax incentive.”
Michael McAdams, ABFA President, noted, “If Washington doesn't step in before lawmakers leave for the campaign trail, then they are essentially putting a virtual hold on our nation's energy and economic security. It is critical that policies already put in place will continue to incentivize and reward continued innovation in superior performance technologies and products so that we can reach renewable fuel goals much higher than current standards. Industry cannot be expected to continue to build and develop fuels of the future if the government does not hold up its end of the bargain. "
The Internal Revenue Code provides a one dollar per gallon tax incentive for biodiesel and renewable diesel. Both biodiesel and renewable diesel are required by statute to meet specific fuel quality standards to qualify for their respective tax incentives. In addition, the code provides a fifty cents per gallon tax credit for alternative fuels that displace petroleum in various applications but do not meet the quality specifications required by statute to claim either the biodiesel or renewable diesel tax incentive.
The biodiesel, renewable diesel, and alternative fuels tax credits help achieve the public policy objective of displacing petroleum by making these renewable fuels price competitive with conventional petroleum fuels in the marketplace. The lapse of these tax incentives on December 31, 2009, and Congress’ inability to enact legislation extending these incentives has significantly harmed biofuels producers and has caused instability in the marketplace. The joint request from NBB and ABFA to retroactively extend these tax incentives through 2011 would allow entrepreneurs to access the capital necessary to produce renewable fuel and create good paying jobs.