Group presses lawmakers to extend credit during lame duck

Source: Marc Heller, E&E reporter • Posted: Monday, October 31, 2016

A trade group for biodiesel companies urged Congress to extend a biodiesel tax credit, and limit it to domestic producers, when lawmakers return to business after the November elections.

The National Biodiesel Board wrote members of the congressional tax writing committees Wednesday, saying producers who are otherwise poised to expand and boost hiring may do the opposite if the credit disappears.

The dollar-per-gallon credit expires Dec. 31 along with other temporary tax provisions that Congress renewed in 2015. In recent years, Congress has revived credits retroactively if they expired before lawmakers acted.

The greater battle in biodiesel is whether to maintain the incentive as a blenders’ credit — which also extends to imported fuel — or to limit the credit to domestic producers.

Another trade group, the Advanced Biofuels Association, which represents importers and domestic producers, has urged Congress to keep the credits as is.

A spokeswoman for the Senate Finance Committee didn’t immediately return a message today about plans to deal with expiring tax provisions during the lame-duck session.

With a broad overhaul of the tax code nowhere near reality, Congress relies on repeated extensions of certain provisions as its main approach to tax policy.

A spokesman for Sen. Ron Wyden (D-Ore.), the panel’s ranking Democrat, said expiring tax provisions will be a top priority.

Changing the biodiesel credit would save about $90 billion in tax revenue as imports decline and U.S. production increases, the NBB said in a news release.

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

The Advanced Biofuels Association has backed legislation, H.R. 5994, by Rep. Diane Black (R-Tenn.) to extend the credit, without changes, for two years. The group’s president, Mike McAdams, called it the biofuel industry’s best hope for maintaining tax benefits.

“Given the shortness of the year and the importance of certainty for the overall biodiesel industry, we simply owe it to all our members to give them the best opportunity to continue to have a tax credit in 2017 and 2018,” McAdams said in a news release touting Black’s introduction of the bill in September.

Legislation to extend and revise the provision into a blender’s credit has been introduced by Sen. Chuck Grassley (R-Iowa) and Rep. Kristi Noem (R-S.D.). Grassley’s bill is S. 3188, and Noem’s is H.R. 5240.