Illinois extends biodiesel tax credit

The Illinois state government has extended the tax credit for biodiesel for an extra five years, until 2018. Originally the credit was due to run out in 2013, but now biodiesel blends of more than 1% and less than 10% will continue to have tax applied to only 80% of the total cost for a further six years.

The Senate Bill 397 passed the full Illinois Senate by a vote of 44-9 and any biodiesel blend with more than 10% will be eligible for fuel tax exemption as well.

The news was well-received in the industry with the Illinois Soybean Association (ISA) saying that the tax credit, which was originally introduced in 2003, has seen the production of biodiesel in Illinois grow from 20 million gallons to 188 million gallons in 2010.

Matt Hughes, ISA chairman, says: ‘We are very pleased to see Illinois legislators' support for biodiesel, including Representative John Bradley from Marion, who sponsored the bill in the House.  The extension will help maintain Illinois as the nation's leading biodiesel producer. The state tax credit is truly vital to our industry and our farmers.’

The Renewable Energy Group (REG) echoed these views and the group’s CEO Daniel Oh says: ‘Since Illinois’ inception of the B11 blending credits in 2004, more biodiesel has been blended in Illinois annually than in any other state. By extending the biodiesel tax abatement for B11 and higher blends through 2018, the Illinois legislature showcases its commitment to more than 1,500 green collar jobs in the state.’

According to REG, the biodiesel industry was responsible for more than $2.6 billion of Illinois Gross Domestic Product between 2004 and 2010.

The Illinois government will also increase the state’s tax individual deduction level from $2 million (€1.5 million) to $3 million this year and then $4 million next year.