Iowa Senators, reps push for biodiesel tax credit extension05/02/2019 | Biodiesel, Policy, Soybean News, Ag Awareness, Economics
By Bethany Baratta, ISA senior writer
The extension of a biodiesel tax credit is way past due, Iowa congressional leaders and others said during a Capitol Hill rally earlier this week. The lapse, now at 16 months, has placed greater uncertainty on biodiesel plants and farmers.
The National Biodiesel Board hosted the event with Sen. Chuck Grassley (R-IA), Rep. Abby Finkenauer (D-IA), Sen. Joni Ernst (R-IA), Rep. Cheri Bustos (D-IL), Rep. Darin LaHood (R-IL), Sen. Sheldon Whitehouse (D-RI), Rep. Dave Loebsack (D-IA) and others to discuss the status of the lapsed credit.
Grassley and Finkenauer have each introduced legislation that would extend the federal biodiesel tax credit for 2018 and 2019.
“There’s been a lot of talk about the need to promote green energy and reduce our carbon emissions. This product [biodiesel] goes a long way in helping us accomplish that goal,” said Grassley. “The biodiesel tax credit is a very effective provision to help accomplish that goal. Support of its extension, then, should be a no-brainer for anyone who supports green energy and American jobs.”
The federal biodiesel tax credit has been issued previously to provide a $1-per-gallon credit to blenders that blend biodiesel with petroleum. But the tax credit has expired, leaving blenders, petroleum marketers and farmers wondering if they’ll get the credit for 2018 or 2019.
“Now more than ever, our soybean farmers need certainty and they need this biodiesel tax credit extender,” said Finkenauer. “This is something that we should be able to work together on. This shouldn’t be a Democratic or Republican issue. It’s good for rural America, it’s … good for our environment, and it’s something that we should have done 16 months ago.”
An Informa study shows that biodiesel adds 63 cents a bushel to the price of soybeans. Soybean oil is a main ingredient in biodiesel making up over 50 percent of the total feedstock mix, but other agricultural byproducts and co-products like recycled cooking grease, inedible corn oil, canola oil, beef tallow, choice white grease (pork fat), and poultry fat are also used.
An extension of the tax credit would ensure some certainty for the 11 blenders in Iowa which produced 365 million gallons of the biofuel last year. It would also support soybean farmers, generating more demand for soybeans as a feedstock to biodiesel plants, said Grant Kimberley, executive director of the Iowa Biodiesel Board.
“We need every bit of demand that we can get for soybeans, and certainly biodiesel is one component that can make a big impact on that. But these plants aren’t going to be fully utilizing that capacity if they don’t have the incentive to do that,” Kimberley said.
Rep. Loebsack, a co-founder of the House Biofuels Caucus, called the extension “absolutely critical.”
“I’m calling on my colleagues on both sides of the aisle in both of these houses of Congress to put aside our differences having to deal with the tax extenders package and get this thing done now — not later, but now,” he said.
The bipartisan legislation introduced by Rep. Finkenauer was referred to the House Ways & Means Committee, the chief tax-writing committee, but the panel’s leadership has yet to schedule a hearing on the measure.
“If the House can send us a bill extending the biodiesel credit, I look forward to working with them and others to get the extension across the finish line,” Sen. Grassley said. Grassley chairs the Senate Finance Committee.
Contact Bethany Baratta at email@example.com.
Additional Recommended Articles for this topic:
For media inquiries, please contact Katie Johnson, ISA Public Relations Manager at firstname.lastname@example.org or Aaron Putze, ISA Communications Director at email@example.com
For permission to republish articles or to request high-res photos contact Aaron Putze at firstname.lastname@example.org. Iowa Soybean Association | 1255 SW Prairie Trail Pkwy | Ankeny | IA | 50023 | US
©2018 Iowa Soybean Association On-Farm Network®. All rights reserved. On-Farm Network® is a registered trademark of the Iowa Soybean Association, Ankeny, IA.Portions of some On-Farm Network trials are paid for in total or in part by the soybean checkoff.