NBB study: biodiesel tax credit extension imperative
All good things come to an end. The biodiesel tax incentive in the US is set to expire on 31 December 2009, but a report released by the National Biodiesel Board (NBB) shows a continuation of the credit is vital to avoid damage to the industry and the economy.
The study, which was conducted by economic analyst John M. Urbanchuk, examined the economic impact of the biodiesel industry and the negative consequences of allowing the federal biodiesel tax credit to lapse.
‘Allowing the credit to lapse will compound the already daunting challenges facing the industry and will cost the nation another 23,000 jobs in addition to the 29,000 jobs that were shed in 2009,’ Manning Feraci, VP of federal affairs for NBB, comments.
The biodiesel tax incentive, enacted in 2004, is designed in a manner that makes biodiesel price-competitive with petroleum diesel fuel in the marketplace. The incentive is structured so that the value of the incentive is reflected in the market price of the fuel.
Urbanchuk’s analysis concludes that without the biodiesel tax incentive, there will be: a major loss of jobs and income; increased demand for petroleum diesel; a degradation of energy security; decreased demand for soyabean oil and lower soyabean prices leading to a negative impact on farm income; and stranded investment as biodiesel capacity is idled; and lost tax revenue for states and local governments.
The NBB is the national trade association of the biodiesel industry and is the coordinating body for biodiesel research and development in the US.
The study, which was conducted by economic analyst John M. Urbanchuk, examined the economic impact of the biodiesel industry and the negative consequences of allowing the federal biodiesel tax credit to lapse.
‘Allowing the credit to lapse will compound the already daunting challenges facing the industry and will cost the nation another 23,000 jobs in addition to the 29,000 jobs that were shed in 2009,’ Manning Feraci, VP of federal affairs for NBB, comments.
The biodiesel tax incentive, enacted in 2004, is designed in a manner that makes biodiesel price-competitive with petroleum diesel fuel in the marketplace. The incentive is structured so that the value of the incentive is reflected in the market price of the fuel.
Urbanchuk’s analysis concludes that without the biodiesel tax incentive, there will be: a major loss of jobs and income; increased demand for petroleum diesel; a degradation of energy security; decreased demand for soyabean oil and lower soyabean prices leading to a negative impact on farm income; and stranded investment as biodiesel capacity is idled; and lost tax revenue for states and local governments.
The NBB is the national trade association of the biodiesel industry and is the coordinating body for biodiesel research and development in the US.
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