Today (March 18) is National Biodiesel Day. To help commemorate the day, which is also the date of Rudolf Diesel's birthday, the National Biodiesel Board (NBB), American Soybean Association (ASA) and members of Congress are emphasizing the need for the passage of a biodiesel tax incentive.
The Senate was unable to gain approval of the incentives last November in a comprehensive energy bill. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, explains the legislation builds on efforts of green fuels production. The measure calls for a federal excise tax credit that amounts to one penny per percentage point of biodiesel blended with petroleum diesel.
Grassley told reporters on the NBB hosted media teleconference that the Senate is likely to revive a modified energy bill that takes out the MTBE requirements. Senate Minority Leader Tom Daschle, D-S.D., pledges to do whatever possible to get the biodiesel tax provisions passed in the Senate. He has reached an agreement with Energy Committee Chairman Pete Domenici, R-N.M. to bring the bill to the floor in the next few weeks.
The tax provisions have been included in the Senate's transportation bill. However, Grassley says he is still unsure whether the House, Senate and the White House will be able to agree on a transportation bill for the upcoming year.
Because ethanol and renewable fuels are becoming more popular, biodiesel is at a better starting place than ethanol was 20 years ago. Grassley explains that the biodiesel tax incentives would do exactly what tax incentive do for ethanol, but even more so because biodiesel is already being used to some extent. "Anyone interested in doing biodiesel production would be practically a millennium ahead of how ethanol people were years ago," he says.
And besides the tax breaks, biodiesel offers a very clean burning alternative to diesel. And instead of relying on foreign oil supplies, the U.S. would be able to "do everything possible to grow our own fuel," says NBB Chairman and ASA Vice President Bob Metz. For Midwest farms that can yield nearly 50 bushels per acre, Metz explains producers can have enough to produce between 70 and 80 gallons per acre.
In addition biodiesel has the highest energy balance of any fuel. A U.S. Department of Energy and U.S. Department of Agriculture full lifecycle emissions study found that for every unit of fossil energy needed to make biodiesel, 3.2 units of energy are gained. In contrast, for every unit of fossil resources to produce petroleum diesel, only 0.88 units of energy are gained. Metz adds that even ethanol has only a 130% efficiency compared to biodiesel's rate reaching over 300%.
Metz concludes that he believes energy legislation is even more important than a Farm Bill. He says this allows for "people in agriculture to further process their product and in turn reduce our dependence on foreign oil."