You are here

Biodiesel tax credit rejected in Senate

The partisan
logjam broke in the Senate Thursday, long enough to pass the Small Business
Jobs and Credit Act. But when Senator Chuck Grassley (R-IA) tossed in a small
twig – an amendment to renew a long-expired biodiesel tax credit  --  a vote of 41 for and 58 against kept the measure stalled in
a legislative backwater.

The vote was “very
disappointing,” Alicia Clancy, a spokeswoman for the Renewable Energy Group
told “Senators with biodiesel plants in their states voted on
both sides. Democrats and Republicans voted on both sides.”

The $1 a gallon
tax credit for biodiesel expired at the end of last year and even though it’s
not considered controversial, it has gotten caught up in partisan wrangling
over how to pay for it. More than 20,000 jobs in the biodiesel industry have
been lost as plants have been idled or slowed down. Some plants are already

“As we're
faced today with a 9.6% unemployment rate, I have a solution that will create
20,000 jobs almost overnight,” Grassley said on the floor of the Senate
Thursday. “That solution is to extend the biodiesel tax credit today.”

have twice sought to have the biodiesel tax credit simply passed through the
Senate by unanimous consent. However, both times my request was objected by
those on the other side of the aisle,” Grassley said.

Thursday's vote on the biodiesel tax credit was not along party lines. Of the 41 who supported Grassley, 16 were
Democrats, including Tom Harkin of Iowa. Before the vote, Harkin said he also
supported Grassley’s effort to get the tax credit reinstated retroactively to
the start of 2010. But the effort also did not have an offset that would
show how the tax credit would be paid for, Harkin told

the vote fell far short of the 67 that were needed to suspend Senate rules to accept Grassley’s amendment.

American Soybean Association leadership 
was also disappointed by the outcome of Thursday’s vote.

“Biodiesel has provided a significant
market opportunity for U.S. soybean farmers, as well as jobs and economic development
for rural communities,” ASA President Rob Joslin said in a statement. “ASA
appreciates the efforts of Senator Grassley to include the long overdue
extension of the biodiesel tax credit in this Bill.”

Harkin told Thursday the
he still expects the biodiesel tax credit and an ethanol credit that expires
this year will both be renewed in a Senate tax bill likely to be passed in
December in a lame duck session of Congress.

Representative Stephanie Herseth
Sandlin (D-SD) looks for something similar in the House if the tax credits
can’t be extended before the November election.

Herseth-Sandlin is is a sponsor of a
bill that would extend ethanol’s 45 cent-a-gallon tax credit for five years.
But the House Ways and Means Committee is considering a shorter extension that
would cut ethanol’s tax credit 20%, to 36 cents.

“I am going to fight hard for at least
a short-term extension of both of those tax credits at the current rate,”
Herseth Sandlin told


Read more about