NBB Working for Tax Credit Renewal, Higher RFS

Tax credit renewal is likely, increasing renewable fuel standard less certain.

Published on: Feb 3, 2012

The National Biodiesel Board still sees hope for a renewal of its industry's now expired tax credit, but argues the bigger economic issue now is a higher renewable fuels target.

Congress will try again in the next few weeks to extend the expiring payroll tax break, and with it, possibly expired breaks for biodiesel and other alternative energy.

National Biodiesel Board spokesman Ben Evans says if lawmakers can come together on a tax package, biodiesel, which for the first time topped a billion gallons last year, stands a good chance of being included.

But Evans says the bigger issue for his industry is the Environmental Protection Agency delaying a decision on raising the 2013 renewable fuels standard for biodiesel to 1.3 billion gallons.

"We think that is modest and sustainable growth; it's not a huge jump but we think it good enough and we supported that," Evans said. "Then last month the EPA came out and said they were going to delay that increase, delay finalizing that number because they felt like they needed to review more."

Evans says the RFS "sets the market" for the industry, and a 300 million gallon boost, would allow for biodiesel growth and investment, which is opposed by conventional diesel producers.

Evans says that there are critics of the RFS program that don't like to see this requirement and fight any kind of increase in it tooth and nail. He says a lot of the fight is coming from the oil industry.

But Evans argues the RFS and the tax credit that expired again in December, are working.  They create jobs, help soybean growers and reduce oil imports.

The credit is still important for its production incentive.  But the RFS really 'creates the market.'

"This RFS issue is as important as anything we're doing right now, it's not more important than anything we are doing. It is critical to the future growth of the biodiesel industry to get an RFS increase and we think that the difficult part is to get that message through to the administration."

Evans says at best without the higher RFS next year, his industry would be "stuck" at one billion gallons, when it's already reached almost 1.1 billion.

At worst, without the new RFS and the tax credit, biodiesel production would decline.