NBB urges Congress to extend biodiesel tax incentive to boost advanced biofuels

The National Biodiesel Board, a US biodiesel trade body, has written a letter to the US’ Congress urging it to extend the biodiesel tax incentive before it expires on 31 December, 2016.

The letter was sent on behalf of US biodiesel producers nationwide and was sent to the House and Senate tax committee leaders. Policy stability is key to boosting advanced biofuels, the trade body stated.

“We strongly urge you to extend the biodiesel tax credit and take this opportunity to make a simple, common-sense reform by focusing the credit on US production,” said Donnell Rehagen, Interim NBB CEO in the letter.

He added: “Legislation pending before Congress – S. 3188 and H.R. 5240 – would accomplish these objectives by extending the incentive through 2019 and changing it from a blender’s credit to a domestic producer’s credit.

“The legislation has strong support from American biodiesel producers and strong bipartisan support in both the House and Senate – reflected last year when a similar proposal passed the Senate Finance Committee.”

The growth of the US biodiesel industry in recent years is paying tremendous dividends in reducing emissions, strengthening our energy security, generating competition in the diesel sector and creating jobs and economic activity in every state in the nation. The biodiesel industry supports nearly 48,000 jobs and $1.9 billion (€1.74bn) in wages across the country.

“Many biodiesel producers who are now poised to expand and hire would likely cut jobs and production. Congress can avoid this with a long-term extension giving producers the policy stability they need to plan for the future,” Rehagen said.

Unused production

US biodiesel producers have more than 1.5 billion gallons of unused production capacity that stands ready to be utilised under the right policy framework.

Mobilising that capacity would create thousands of jobs and billions of dollars in economic activity, the NBB said in a statement. Additionally, reforming the incentive would save the Treasury some $90 million as imports are reduced and domestic production rises, according to the Joint Committee on Taxation, the NBB said.

Under the current “blender’s” structure of the incentive, foreign biodiesel imported to the US and blended with petroleum diesel in the US is eligible for the tax incentive.

Increasingly, foreign biodiesel producers are taking advantage of the US incentive by shipping their product here. In 2015 alone, some 670 million gallons of biodiesel and renewable diesel was imported to the US, making up nearly a third of the US market.

Biodiesel can be made from a diverse mix of resources such as soybean oil, recycled cooking oil and animal fats.

It is the first and only commercial-scale fuel produced across the US to meet the EPA’s (Environmental Protection Agency) definition as an Advanced Biofuel - meaning the EPA has determined that biodiesel reduces greenhouse gas emissions by more than 50% when compared with petroleum diesel. Americans used nearly 2.1 billion gallons of biodiesel last year.

NBB is the US trade association representing the biodiesel and renewable diesel industries, including producers, feedstock suppliers, and fuel distributors.