Biodiesel Tax Credit Part of Extension

John Davis

The $1-a-gallon federal biodiesel tax credit set to expire on December 31, 2008 will be renewed for another year, if the U.S. Senate’s version of the Renewable Energy and Job Creation Act of 2008 gains final passage. It still faces a vote in the U.S. House and needs the President’s signature to become law.

The bill has gained the praise of soybean growers, one of the main suppliers of a primary feedstock for the green fuel:

“The American Soybean Association greatly appreciates the work of the Senate to extend the biodiesel tax credit,” said ASA President John Hoffman, a soybean producer from Waterloo, Iowa. “Passage of this legislation to extend the biodiesel tax credit enhances the viability of the U.S. biodiesel industry, which is an important market for U.S. soybean farmers. ASA now urges House members to swiftly pass the measure and send it to the President to be signed into law.”

The bill, which extends a variety of renewable energy tax provisions, also includes language that denies the biodiesel tax credit to fuel produced outside of the U.S. for consumption outside of the U.S. This is intended to shut down the abusive “splash and dash” practice that currently allows foreign produced fuel to enter the U.S, claim the biodiesel tax incentive, and be shipped to a third country for end use.

“ASA strongly supports ending the abusive practice of splash and dash, as it provided no energy or economic justification,” Hoffman said.

Biodiesel