Clock running out on US biodiesel tax credit

22 December 2011 20:28  [Source: ICIS news]

An alarm clockBOGOTA (ICIS)--Thousands of jobs are at stake as the clock runs out on the $1/gal US federal tax credit for biodiesel producers, an industry group said on Thursday.

The tax credit is is set to expire on 31 December, leaving the fate of the industry in limbo, industry sources said.

"Thousands of jobs supported by the US biodiesel industry are at risk as Congress appears to have reached a legislative impasse without extending a critical tax incentive," the National Biodiesel Board (NBB) said in a statement.

"We're disappointed," said Anne Steckel, vice president of federal affairs for the NBB.

"Jobs and the economy are supposed to be the top priority in Washington, yet Congress has left thousands of workers in limbo heading into the holidays by failing to extend this tax incentive.”

Congress could still pass a retroactive tax credit when it returns to Washington after the first of the year.

The biodiesel industry has set production records this year after Congress reinstated the tax incentive following a one-year lapse in 2010. 

The US industry produced more than 802m gal (3bn litres) of biodiesel in 2011, more than doubling 2010’s production of about 315m gal.

The industry previously set a record in 2008, when it produced 690 gal, according to the NBB.

When the credit lapsed in 2010, dozens of plants shut down and thousands of jobs were lost as production plummeted to the lowest level since 2006.

With the new record coming on the coattails of the 2011 reinstated federal tax incentive for biodiesel, the fate of that incentive is considered to be critical by most biodiesel producers.

Biodiesel is produced from renewable resources such as rapeseed, soy and palm oil. Corn and tallow are also used.

Biodiesel is the first and only commercial-scale fuel used across the US to meet the Environmental Protection Agency's (EPA) definition of an advanced biofuel, according to the NBB.

By: Leela Landress
+1 713 525 2653

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