Extensions Needed for Continued Biodiesel Growth

ASA advocates extending the volumetric biodiesel tax incentive and small agri-biodiesel producer credit; and authoring and funding a CCC Biodiesel program. Compiled by staff 

Published on: May 11, 2006

Production of biodiesel fuel has grown from 2 million gallons in 2000 to more than 150 million gallons projected in 2006. Two government programs - the biodiesel tax incentive and the CCC Bioenergy Program - have fueled biodiesel's growth. The American Soybean Association recommended Congress extend and fund both in potential upcoming energy legislation.

Today there are 65 operational biodiesel plans, with 50 more under construction. ASA President Bob Metz says in addition to the tax incentive and CCC Bioenergy program, the small biodiesel producer tax credit included in last summer's energy bill is also beginning to contribute to biodiesel's success.

However the biodiesel boosters are in jeopardy. Both the biodiesel tax incentive and the small producer credit will expire at the end 2008. And the CCC Bioenergy Program terminates at the end of this fiscal year.

ASA is asking Congress to include in any energy package legislation:

  • Extend the volumetric biodiesel tax incentive;
  • Extend small agri-biodiesel producer credit; and
  • Author and fund a CCC Biodiesel program

"By taking these actions, we estimate on-road diesel supplies could be increased by 2 percent by 2015," Metz says. "Each gallon of domestically produced biodiesel represents an expansion of distillate supplies, additional refinery capacity and is a direct replacement for imported refined diesel fuel. Boosting available fuel supplies will also have a positive impact on fuel prices to consumers."

During a teleconference Wednesday morning, House Agriculture Committee ranking member Collin Peterson, D-Minn., says he is pressing the administration to renew funding for the CCC Bioenergy Program and work to extend tax credits and other incentives.