Iowa biodiesel producers are pushing for a renewal of the federal $1-per-gallon biodiesel tax incentive. The Iowa Renewable Fuels Association (IRFA) sent a letter to all members of the Iowa Congressional delegation urging them to pass a multi-year biodiesel tax incentive.
“While facing more than a century of uninterrupted subsidies for petroleum, the biodiesel tax incentive has been allowed to expire four times in six years,” stated IRFA Executive Director Monte Shaw. “Now more than ever, the biodiesel community needs certainty and a level playing field in order to continue to build upon the vast energy security, economic and air quality benefits producing and using biodiesel currently provides to this country.”
The letters stated, “We urge you to do all you can to push for swift passage of a tax extenders package that includes an amendment to shift the biodiesel tax incentive to a producer’s credit, as was unanimously passed out of the Senate Finance Committee in the Tax Relief Extension Act of 2015 (S.1946) on July 21, 2015.
“The biodiesel tax incentive is a proven job creator that is critically important to the U.S. biodiesel industry, and specifically to Iowa biodiesel producers. However, the $1.00 per gallon incentive lapsed on January 1, 2015, marking the fourth time in six years that the incentive has expired—even as favorable tax incentives for petroleum have continued uninterrupted for more than a century. This has created significant disruption and uncertainty in the industry. It is imperative that Congress end this piecemeal tax policy for biodiesel by passing a long-term tax incentive that paves the way for growth.”
The entire biodiesel industry is not quite in harmony on the renewal of the tax incentive. Last week, the Advanced Biofuels Producers Association stated its opposition to an amendment by Sens. Charles Grassley and Maria Cantwell, which would extend the $1-per-gallon federal credit, but would convert the credit from one for blenders (those who make biodiesel mixtures) to one for those who produce biodiesel and renewable diesel.
Iowa is a major producer of biodiesel, with 12 biodiesel facilities able to produce nearly 315 million gallons annually.