News

New report on biodiesel tax credit importance

A new report released by the National Biodiesel Board shows the importance of the Biodiesel Tax Credit to the industry.

Congress has let the tax credit lapse the past two years and NBB’s Kurt Kovarik told reporters Tuesday the industry is going through a double punch because of bad policy, “You know, we’ve suffered through market demand destruction as a result of small refinery exemptions through this administration over the past three years and unfortunately it’s come at the same time where Congress has failed to act to extend the biodiesel tax credit.”

The report, written by John Urbanchuk with ABF Economics, dispels the myth that biodiesel producers get the full value of a tax credit.

“That tax credit is essentially shared between the biodiesel producer and the blender as well and the blender’s have a little more leverage in the marketplace than biodiesel producers do and they’re forcing some of that back onto the biodiesel producer.”

Kovarik says there’s strong bipartisan support for restoring the tax credit and they keep urging Congress to include the House and Senate bills to extend it for two years in a final year-end spending deal, but time is running out.

Nine biodiesel plants have either slashed production or have closed in six states including Iowa and Michigan – also, Georgia, Mississippi, Pennsylvania, and Texas.