Congress urged to extend biodiesel blenders’ tax credit

The Advanced Biofuels Association (ABA) has joined forces with NATSO, the national association representing truckstops and travel plazas, to urge Congress to extend the biodiesel blender’s tax credit.

In letters to Members of the Senate Finance Committee and the House Ways and Means Committee, lawmakers are asked to refrain from changing the US’ existing biodiesel tax credit structure. The signees of the letter argue that the biodiesel tax credit is helping to displace traditional petroleum-based fuel with a cleaner-burning substitute.

A group of lawmakers from biodiesel producing states such as Iowa have recently been campaigning to have the biodiesel blenders’ tax credit converted to a producer’s one. This is something NATSO and ABA strongly disagree with.

“A producer’s credit would be horrible for consumers and the American economy,” said NATSO President and CEO Lisa Mullings.

“For the vast majority of consumers, the difference of just a few pennies in the price of a gallon of fuel can affect whether or not they decide to make a purchase. The biodiesel tax credit helps fuel retailers to sell biodiesel at a cost that is competitive with traditional diesel. If the price of biodiesel is no longer on par with the price of diesel, consumers won’t be inclined to buy it. Congress has already considered – and rightly rejected -- past efforts to shift the biodiesel blenders’ tax credit to the producer’s credit. We strongly urge you to again reject efforts to alter what continues to be sound public policy.”

The $1 (€0.9) per gallon biodiesel blenders’ tax credit expired at the end of 2016. It is argued in the letter that extending and then gradually phasing out the tax credit is needed to allow blenders, producers and consumers the certainty they need to achieve the environmental and cost benefits the tax credit was designed to accomplish, while also encouraging conversion to a market-based, fiscally secure system where the biodiesel industry can eventually survive on its own without government support.

NATSO argues that converting to a producer’s credit would be counter-productive, driving up fuel prices enough to drive away consumer interest in biodiesel.

NATSO and ABA were joined by the American Trucking Associations, the National Association of Convenience Stores, the Petroleum Marketers Association of America, and the Society of Independent Gasoline Marketers of America in signing the letter.