Biodiesel Producers Plead for Renewal of Tax Credit

Cindy Zimmerman

Four biodiesel producers from around the nation took their story to the media today, increasing their call for Congress to immediately and retroactively reinstate the federal biodiesel tax incentive which was allowed to expire five months ago. The producers included a small family operation in Arkansas, an energy group in Washington state, a plant that is laying off people in Georgia, and the largest biodiesel producer in the country with plants in five states.

Bernie Crowley of Delta American Fuel in Helena, Ark. says the tax credit was the reason they got into the biodiesel business in 2005. “I’ve basically spent my last five years investing our hard-won capital over 50 years of business in this industry,” Crowley said. Now that his plant is up to production level and he could add another 35-40 jobs in one of the most impoverished counties in the country, “we’ve been on pause since January 1” and could end up having to lay off people instead.

Gen-X Energy Group in Pasco, Washington is a privately-held group with investors and president Scott Johnson says they have expanded into global markets this year to stay profitable without the tax credit and they closed a plant last year because of uncertainty about the tax credit. “The Gen-X vision is to be one of the leading biofuel producers in the United States, with or without the federal biodiesel tax credit, however the time line to achieve this vision can be significantly decreased through federal support,” said Johnson.

Bobby Heiser with Nittany Biodiesel, headquartered in Pennsylvania, says they invested $30 million on a versatile biodiesel plant just outside of Atlanta, Georgia. “Since January, we held on with the expectation that Congress would deliver,” he said. “With mounting losses, we’ve continued to operate, but we can’t sell at even a break-even production level at this point.” Three weeks ago, they ran out of money and had to layoff 20 out of 35 employees, all but shutting down the plant.

REG (Renewable Energy Group) owns 180 million gallons of biodiesel production and markets another 180 million owned by others. The company has plants in Illinois, Iowa, Kansas, Louisiana and Texas. However, CEO Jeff Stroburg says not having the tax credit has reduced that capacity by more than 75 percent. “So all of that capacity is practically idled right now, there’s very little demand for biodiesel in the market place as a result of the uncertainty.”

National Biodiesel Board CEO Joe Jobe says they are pleading with lawmakers to get the biodiesel tax credit reinstated before the Memorial Day recess to avoid the loss of more green jobs.

Biodiesel, NBB