Struggling ethanol producers won an important decision by the Internal Revenue Service this week that allows them to retain the current five year depreciation for assets.
Following over a year of intense work by the Renewable Fuels Association with the IRS, the agency has issued a Notice of Proposed Revenue Ruling clarifying that it will not seek to impose a change in the cost recovery periods used by most ethanol producers. Historically, most ethanol producers have used cost recovery (or depreciation) periods of five years. About 18 months ago, IRS advised the industry that the cost recovery period should be seven years instead of five years, and that had to be retroactive, and would apply to all tax returns of ethanol producers that were still open for examination by the IRS. The RFA succeeded in persuading the IRS not to make their decision retroactive.
The RFA told the IRS that their the ruling should not apply retroactively since it would result significant costs to producers who, in good faith, relied on the IRS’ previous acceptance of the 5 year depreciation recovery period for such assets. In response to RFA’s position, the IRS has proposed that the depreciation classification would apply to assets placed in service on or after the publication of a final revenue ruling. To prevent such retroactive application, the IRS specifically provided that it “will not require taxpayers to adopt this depreciation classification for tangible assets used in converting biomass to a liquid fuel such as fuel grade ethanol that are placed in service prior to the publication of a final revenue ruling.”
The IRS has invited public comments on the proposed revenue ruling. Comments are due by November 23, 2009. A final revenue ruling will not be issued until the comments have been considered.
The power of soybean-based biodiesel will be on display this Friday and Saturday nights in Jefferson City, Mo., as the Midwest Xtreme Truck and Tractor Pull, a National Tractor Pullers Association Grand National event, comes to town.
USB staff and Missouri Soybean Merchandising Council staff will be on hand educating pull attendees on the benefits of soy biodiesel and will be available for media interviews. Biodiesel has the best energy return of any liquid fuel, along with increased lubricity, high cetane and the highest BTU content of any renewable fuel.
In what should be a cautionary tale to American lawmakers who might want to raise revenues from biodiesel sales, a leader of Germany’s biofuels industry says high taxes on biodiesel in that country are killing the green fuel there.
A Louisiana biodiesel plant that needs intense heat to turn animal fats and waste materials into the green fuel has chosen a Texas company that specializes in the process control system that uses hydrogen to create the heat needed.
“The idea was born from a simple observation of a fish in an aquarium,” said researcher Asfaw Beyene, a mechanical engineer at San Diego State University. “Many flying and swimming animals have superior efficiencies than manmade devices. The primary difference between natural motion and motion of manmade devices is lack of geometric adaptability to varying flow conditions.
More state vehicles in Texas will be running on something other than the non-renewable petroleum the state is known for.
Officials at a biodiesel plant in Mississippi have finished the commissioning process for the 8-million-gallon-a-year facility.
Kum & Go L.C. has recently opened an E85 station in Neosho, Missouri. The company, headquartered in West Des Moines, Iowa, opened the 3,400-square-foot convenience store after only 84 days of construction. 
When the ethanol by-product known as dried distillers grains with solubles (DDGS) is heated at high temperatures under limited oxygen to make synthesis gas, or syngas, the remains are a fine, dust-like ash. SDSU Soil Testing Laboratory manager Ron Gelderman set out to learn whether that residue could be applied to fields as a soil nutrient, since the ash likely would be discarded in a landfill otherwise.