Washington, D.C. - The biodiesel industry is one big step closer to getting its critical federal subsidy back.
The U.S. Senate voted 62-36 Wednesday to pass a tax bill that included a one-year extension of the $1-a-gallon biodiesel tax credit, retroactive to Jan. 1. Biodiesel production came to a virtual stop, according to industry officials, after the credit expired Dec. 31 when senators couldn't agree on legislation that would have kept it alive.
The House still must approve the bill or negotiate changes with the Senate before it can go to President Barack Obama for his signature. A spokesman for the House Ways and Means Committee, Matthew Beck, said no decision had been made about what to do with the legislation. The panel has a new chairman, Sander Levin, D-Mich., since the bill was originally written in the House.
Without the credit, it is uneconomical to make the fuel additive, industry officials say.
"The lapse in the biodiesel tax credit has been extremely disruptive to the domestic biodiesel industry, and a retroactive extension of this worthwhile incentive will help America realize the job creation, energy security and environmental benefits associated with biodiesel," said Manning Feraci, vice president of federal affairs for the National Biodiesel Board, an industry trade group.
Even though the House still has to act on the bill, the Senate vote provides assurance that the subsidy will be revived, said Gary Haer, vice president of sales and marketing for the Ames-based Renewable Energy Group, a leading producer of the fuel additive.
One of the subsidy's biggest congressional backers, Sen. Chuck Grassley, R-Ia., voted against the bill, citing $100 billion in spending provisions that the bill would add to the budget deficit. "It was irresponsible and even offensive for congressional leaders to make the extension of important renewable energy tax incentives contingent" on the added spending, he said.
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