House Revives Biodiesel Tax Credit Two Years After It Expired
Congress is on the verge of retroactive restoration of the $1-a-gallon biodiesel tax credit, a result of the last-minute inclusion of a package of tax breaks in a mammoth government funding bill. The House passed the spending bill, 297 to 120, on Tuesday, just hours after agreement had been reached on the so-called “extenders” package. The Senate is expected to approve the bill before the end of the week.
The appropriations bill includes $1.5 billion in disaster relief money for agriculture and funding for the USDA for the rest of the fiscal year. It rejects administration proposals to slash spending on food stamps and the federally subsidized crop insurance system.
A rider on the bill would require that the words genetically engineered appear on the label of AquAdvantage salmon, the first genetically modified animal to win U.S. approval for human consumption. Jim Greenwood, president of the Biotechnology Innovation Organization, a trade group, said the rider “will only confuse consumers” because it duplicates the duties of a 2016 labeling law for GMO foods.
“This morning, we have some good news,” said Senate Finance Chairman Chuck Grassley, who was part of House-Senate negotiations on the “extenders” package agreed on before dawn on Tuesday. “Now it’s important that we do our job and pass this year-end appropriations package, and with it will be these provisions on extenders.”
The biodiesel tax credit was among nearly three dozen short-term tax breaks in the package that had expired or were near the end of their statutory lives. The wind energy production tax credit would see a one-year extension under the legislation. The package gets its nickname because lawmakers extend the time span of the tax breaks.
“Today’s announced deal provides the policy certainty that the biodiesel industry has been seeking to support investments and continued growth of production,” said the National Biodiesel Board. The trade groups says biodiesel “is the nation’s first domestically produced, commercially available advanced biofuel.” Like the ethanol industry, the biodiesel group says that when the EPA exempts small petroleum refineries from complying with the Renewable Fuel Standard, it reduces the market for biofuels.
Under the “extenders” legislation, the biodiesel credit would be revived retroactive to its expiration at the end of 2017 and would be available through 2022.
Biodiesel production of 1.32 billion gallons through September is running below its pace in 2018 and is far below the industry’s capacity of 2.5 billion gallons a year, according to Energy Department data.
Roughly one third of U.S.-produced soybean oil is used in making biodiesel. The fuel can also be made from recycled cooking oil and animal fats. The Renewable Fuels Association, which represents ethanol makers, says more than 2 billion pounds of corn distillers oil from ethanol plants is converted annually “to the lowest-carbon source of biodiesel and renewable biodiesel” now available.
A Grassley statement on the extenders package is available here.
For the text of the extenders package, click here.
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