A bipartisan group of lawmakers in both the House and Senate this week introduced legislation to extend the biodiesel tax incentive for three years.

The Biodiesel Tax Incentive Reform and Extension Act would extend the $1 per gallon tax credit from 2012 through 2014 and would reform the biodiesel tax incentive from a blenders excise tax credit to a production excise tax credit. “Biodiesel development and production is an important job creator for this country,” said House co-sponsor Congressman Aaron Schock (R-IL), who notes that biodiesel is an important industry for soybean producers and the rural economy of his home state.

“Illinois soybean farmers have a great interest in the development and expansion of the U.S. biodiesel industry. Biodiesel has provided a significant market opportunity for soybean farmers, and jobs and economic development for rural communities,” said American Soybean Association Vice President Ron Kindred of Atlanta, Ill.

Schock says that extending the credit will also help develop other crops for the production of biodiesel, such as Pennycress, which has an exceptionally high oil content. Initial research indicates that an acre of pennycress can yield up to 110 gallons of biodiesel, twice what can be produced from an equal amount of soybeans.

The National Biodiesel Board (NBB) is pleased that extension legislation has been introduced, now that the industry is getting back up to speed after losing the tax incentive for an entire year. “Unfortunately, we don’t have to speculate about what would happen to our industry if this tax incentive goes away. We saw the fallout last year when the incentive temporarily expired. Plants closed and thousands of people were laid off. It would be a terrible mistake if Congress allowed that to happen again,” said NBB Chairman Gary Haer. “We are poised for a record year of production this year, and this bill would provide the market and investor certainty that the industry needs to continue building on that progress.”