Trade groups urge against renewing biodiesel credit

Source: Tiffany Stecker, E&E reporter • Posted: Friday, November 20, 2015

Groups representing advanced biofuel manufacturers, petroleum marketers and convenience stores sent a letter to Senate Finance Committee leaders yesterday asking the committee to reconsider an amendment to a tax extenders bill that would reinstate a tax credit for domestic biodiesel producers.

The Advanced Biofuels Association, the Petroleum Marketers Association of America, the National Association of Truck Stop Operators, the Society of Independent Gasoline Marketers of America and the National Association of Convenience Stores sent the letter to Senate Finance Chairman Orrin Hatch (R-Utah) and ranking member Ron Wyden (D-Ore.) requesting that the lawmakers extend the $1-per-gallon blender’s credit in the final tax extenders package, rather than change the same tax credit to apply only to producers of biodiesel in the United States.

The blender’s credit expired on Dec. 31 last year. Sens. Chuck Grassley (R-Iowa) and Maria Cantwell (D-Wash.) introduced an amendment to the Senate tax extenders package in July that would convert the blender’s tax credit to companies that blend biodiesel and renewable diesel into a producer tax credit in 2016, as well as make imported biofuels ineligible for the credit. The groups argue that a producer’s credit would increase costs to the consumers.

“At this time common sense dictates that Congress should not be looking to revise an effective, long-term policy with changes to the biodiesel and renewable diesel blenders tax credit as part of legislation to extend various expired tax benefits,” said Advanced Biofuels Association President Michael McAdams in a statement. McAdams’ organization represents several global companies.

The writers of the letter argue that the production-only credit could increase fuel costs for consumers, including heating oil, and violate trade agreements. The move could also increase the price of renewable identification number credits, credits that petroleum blenders use to satisfy their compliance with the renewable fuel standard.

Congress established the biodiesel tax credit in 2005 but has allowed it to expire multiple times.

The letter comes as the National Biodiesel Board, which is in favor of the Grassley-Cantwell amendment, holds their fly-in this week. Nearly 100 industry representatives met with legislators Tuesday to push for reinstating the biodiesel tax incentive as a domestic production credit, rather than a subsidy for blending the plant-based fuel with petroleum biodiesel. The biodiesel board believes a producer’s credit would help support U.S. biodiesel makers (Greenwire, Nov. 18).

Click here to read the letter.