On Wednesday the U.S. House of Representatives passed H.R. 4213, the Tax Extenders Act of 2009, by a 241 to 181 margin the will extend the biodiesel tax incentive through Dec. 31, 2010. The Senate now has to pass similar legislation prior to the tax incentive expiring at the end of the month.
Senator Tom Harkin, D-Iowa, has asked Senators Max Baucus, D-Mont., and Chuck Grassley, R-Iowa, Chairman and Ranking Member of the Senate Committee on Finance, to prepare and introduce legislation to extend the biodiesel blenders' tax credit as soon as possible. The tax incentive, which is intended to encourage the production and use of biofuels, allows blenders to claim a $1 excise tax credit for each gallon of biodiesel blended with diesel.
In a letter, Senator Harkin wrote, "The biodiesel blenders' tax incentive helps the industry to stay viable while coping with increasing soy oil feedstock costs and the market impacts of fluctuating oil prices. It is important for our nation's energy security, the environment and our economy that we extend this tax credit."
The Iowa Renewable Fuels Association says if the biodiesel tax incentive is allowed to expire – even for a brief period of time – the Iowa biodiesel industry will cease production and many plants will likely not reopen under current ownership. The organization says if the biodiesel tax incentive expires, biodiesel blends will be priced out of the marketplace.