As we close in on income tax deadline day, biodiesel advocates are blasting the U.S. Internal Revenue Service for allowing petroleum producers to cash in on the same dollar-a-gallon tax credit orginally set up to help the fledgling biodiesel industry.
According to a National Biodiesel Board press release, special interests have successfully lobbied the U.S. Department of Treasury to to gain access to a renewable diesel tax credit for a specific process called thermal de-polymerization (TDP):
“Certain powerful oil companies have managed to get the government to expand the definition of a separate provision that was added into the biodiesel tax credit law late in the legislative process,” said Joe Jobe, CEO of the National Biodiesel Board (NBB). “It’s our belief that this credit was developed to help a specific emerging technology, and not to further subsidize existing petroleum refineries.”
“This is bad energy policy, bad agricultural policy and bad fiscal policy,” Jobe said. “If Congress lets this stand, our government will be handing over U.S. taxpayer money to some of the richest companies in the world, and it will not provide many of the benefits that the biodiesel tax incentive has given back to America.”
NBB goes on to say that allowing large integrated refineries to claim a subsidy for dumping raw domestic or imported vegetable oil into the refining process won’t add refining capacity, it will hamper energy security efforts, and it will subsidize oil companies for what they are already doing. The board goes on to say it worries this would allow Big Oil to put a stranglehold on the biodiesel industry.
Since the original biodiesel tax incentive started in 2004, it has helped the biodiesel industry grow from just 22 plants producing about 157 million gallons a year to today’s 105 plants making 864 million gallons with 1.7 billion gallons of capacity under construction.