Without tax incentives, biodiesel production may cease to exist, fears U.S. soybean farmers. Currently the biodiesel tax incentive is set to expire Dec. 31, 2009.
Wednesday the House approved H.R. 4213, the Tax Extenders Act of 2009, by a vote of 241 to 181. The bill includes a provision which extends the biodiesel tax incentive through Dec. 31, 2010.
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.
"Biodiesel has provided a significant market opportunity for U.S. soybean farmers, as well as jobs and economic development for rural communities, and ASA is proud of its role in establishing the U.S. biodiesel industry," said American Soybean Association President Rob Joslin, a soybean producer from Sidney, Ohio. "Biodiesel is one of the cleanest burning biofuels currently used in commercial markets. Biodiesel is a renewable and sustainable energy source that can play a significant role in our national efforts to increase our energy security and improve our environmental footprint. The biodiesel industry is creating valuable green jobs and making a positive contribution to the economy."
Joslin said, at this point, it remains unclear when, or if, the U.S. Senate will address tax extenders legislation before the end of the year.
Sen. Tom Harkin, D-Iowa, wrote to Senators Max Baucus, D-Mont., and Chuck Grassley, R-Iowa, Chairman and Ranking Member of the Senate Committee on Finance, urging them to prepare and introduce legislation to extend the biodiesel blenders' tax credit as soon as possible.
"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," Harkin said.
The importance of extending this tax credit is widely recognized by industry groups. In a letter to Senator Harkin, the Iowa Renewable Fuels Association wrote, "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. With the tax credit, biodiesel blends are very competitive in today's marketplace. However, if the biodiesel tax incentive expires, biodiesel blends will be priced out of the marketplace and our customers – the oil companies – will stop purchasing biodiesel."
ASA is urging soybean farmers contact the senators directly to urge the need for an extension. ASA leaders will join with farmers from state soybean associations, livestock producers, biodiesel producers, and others in the biodiesel industry to push for prompt Senate action to extend the biodiesel tax incentive in DC next Thursday.
Policy is one of the most important issues facing farmers today, but often the most difficult to digest. Jacqui Fatka has a passion to decode the often difficult world of agricultural policy into terms understandable for today's ag players.
Fatka joined the Farm Progress team as E-Content Editor in August 2003 after graduating from Iowa State University. Prior to full-time employment with Farm Progress, she interned at Wallaces Farmer magazine, Iowa Sen. Chuck Grassley's press office and the Iowa Pork Producers Association and freelanced for National Hog Farmer. She also worked as a public relations consultant with Iowa Industries for the Future, an effort to bring together major players in the biorenewables industry.
Currently Fatka is a staff editor at a sister publication, Feedstuffs. For Farm Futures she regularly tells the story of ongoing agricultural policy changes. Her byline can also be found on management profiles.
Fatka grew up on a grain and livestock farm near Atlantic, Iowa. She currently lives in central Ohio with her husband Eric.
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