Biodiesel Industry Urges Congress To Extend Tax Incentive

Representatives of the U.S. biodiesel industry urged Congress at a Senate hearing on December 14 to pass a seamless extension of the biodiesel tax incentive to avoid putting thousands of jobs at risk.

"Like the rest of the industry, RBF has seen a tremendous increase in demand for its product during 2011. We are running our facility harder than ever," Paul Soanes, President and CEO of Texas-based Renewable Biofuels, Inc. (RBF), said in testimony before the Senate Finance Committee at a hearing on renewable energy incentives. "But stable, long-term federal incentives are necessary for this industry to continue to grow."

Soanes emphasized the turnaround his company has seen with the reinstatement of the tax incentive after it was allowed to expire in 2010. RBF has increased production at its plant in Port Neches, TX, from nine million gallons in 2010 to more than sixty two million gallons this year, hiring new employees and investing in capital improvements.

Similar stories are taking place across the country as the biodiesel industry recovers from last year's slump, when production plummeted, dozens of plants closed, and thousands of people lost jobs after the tax incentive lapsed. With the incentive's reinstatement this year, the industry has set a new production record of more than 802 million gallons through October. That is more than double last year's volume of about 315 million gallons.

The increased production will support more than 31,000 jobs this year while generating at least $3 billion in GDP and $628 million in federal, state and local tax revenues, according to a recent economic study conducted by Cardno ENTRIX, an international economics consulting firm.

"Our industry's numbers speak for themselves. We're on track to nearly triple our production from last year, and that translates directly into jobs and productivity," said Anne Steckel, Vice President of Federal Affairs at the National Biodiesel Board (NBB). "This tax incentive is a job creator, and Congress will be putting jobs in jeopardy if it adjourns without passing an extension."

The $1-per-gallon biodiesel tax credit is slated to expire on December 31. Bipartisan legislation has been introduced in the House and Senate to extend it for three years. Wednesday's hearing on alternative energy tax incentives was held by the Senate Finance Committee's Subcommittee on Energy, Natural Resources, and Infrastructure.

Biodiesel is a renewable, clean-burning diesel replacement that can be used in existing diesel engines and meets a strict ASTM fuel specification. Made from an increasingly diverse mix of resources such as agricultural oils, recycled cooking oil, and animal fats, it is the first and only commercial-scale fuel used across the U.S. to meet the Environmental Protection Agency's definition as an Advanced Biofuel. It is produced in nearly every state in the country and will support more than 31,000 U.S. jobs in 2011 while replacing nearly one billion gallons of petroleum diesel. NBB is the national trade association representing the biodiesel industry.

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