How to Pay for Biodiesel Tax Credit Has Bill Stalled

Congress may not meet goal of getting deal done by Memorial Day.

Published on: May 20, 2010

The long-delayed bid to restore the biodiesel tax credit that expired in December faces key hurdles in the House and Senate in the run up to the Congressional Memorial Day holiday recess.

The House was planning this week to take up a tax extenders bill that includes a one-year biodiesel tax credit extension retroactive to December. But National Biodiesel Board spokesman Michael Frohlich says the House and Senate had yet to agree on offsetting cuts to pay for continuing the tax breaks.

"What we're seeing right now is an energy policy that has broad bipartisan support is caught up in a larger bill with some big differences," Frohlich said. "A possibility of going into some deficit spending and that raises some concerns with a number of members on both sides of the aisle."

The House bill is at least $150 billion in the red. The lack of a House-Senate agreement on offsets could force time-consuming and multiple votes before the Memorial Day recess; time that neither body has.

Meantime, Frohlich says biodiesel is being crippled. Experts estimate some 8,000 to 12,000 biodiesel jobs have been lost or face imminent risk out of about 23,000 when the tax break expired. And Frohlich says some 10 to 15 refinery closings are likely permanent.