Bipartisan senators offer bill to extend lapsed biodiesel tax incentive

Source: Amanda Peterka, E&E reporter • Posted: Monday, February 17, 2014

A bipartisan pair of senators this week introduced legislation to extend the $1-a-gallon biodiesel tax credit.

The credit expired at the end of last year along with a host of renewable energy incentives. It brought in about $1.8 billion in extra revenue for the biodiesel industry, which produces fuel out of soybean oil, animal fats and used cooking grease.

The bill, introduced Wednesday by Sen. Maria Cantwell (D-Wash.), whose state has several biodiesel companies, would extend the credit by three years. It would also apply to renewable diesel and renewable aviation fuel.

The bill also would reform the tax credit by increasing the amount from $1 to $1.10 for the first 15 million gallons of biodiesel for small producers and by prohibiting fuel blenders from obtaining the incentive.

Sen. Chuck Grassley (R-Iowa), a longtime congressional supporter of renewable fuel, co-sponsored S. 2021.

“This incentive clearly stimulates production and creates jobs at biodiesel plants across the country, and we urge the leadership of both parties to quickly take up this bill,” the National Biodiesel Board said in a statement of support.

This is the third time Congress has allowed the biodiesel tax credit to expire; the incentive also lapsed through all of 2010 and 2012. The rocky history of the credit has left small biodiesel companies in the lurch, with many holding off on expansion plans because of a lack of certainty (Greenwire, Dec. 24, 2013).

Any extension of the credit will likely be rolled into a larger tax extenders package.

Sen. Ron Wyden (D-Ore.) this week took over the chairmanship of the Senate Finance Committee, which has jurisdiction over tax credits, following former Chairman Max Baucus’ (D-Mont.) confirmation to become ambassador to China. Wyden has expressed interest in quickly moving a tax extenders bill through the committee that would retain clean energy incentives.