WASHINGTON, Oct. 27, 2016 – As lawmakers focus
on their post-election agenda, the nation’s biodiesel industry wants them to
know that extension of the biodiesel tax incentive should definitely be on
their year-end “to do” list.
“We strongly urge you to extend the biodiesel
tax credit and take this opportunity to make a simple, common-sense reform by
focusing the credit on U.S. production,” said Donnell Rehagen, Interim NBB CEO
in a letter to House and Senate tax committee leaders today.
“Legislation pending before Congress – S. 3188
and H.R. 5240 – would accomplish these objectives by extending the incentive
through 2019 and changing it from a blender’s credit to a domestic producer’s
credit. The legislation has strong support from American biodiesel producers
and strong bipartisan support in both the House and Senate – reflected last
year when a similar proposal passed the Senate Finance Committee,” he wrote.
If the current tax incentive expires on Dec. 31,
NBB warned that many biodiesel producers would likely cut jobs and production.
“Congress can avoid this with a long-term
extension giving producers the policy stability they need to plan for the
future,” NBB noted.
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Additionally, reforming the incentive would save
the Treasury some $90 million as imports are reduced and domestic production
rises, according to the Joint Committee on Taxation.
Under the current “blender’s” structure of the
incentive, foreign biodiesel imported to the U.S. and blended with petroleum
diesel in the U.S. is eligible for the tax incentive. Increasingly, foreign
biodiesel producers are taking advantage of the U.S. incentive by shipping
their product here.
In 2015 alone, some 670 million gallons of
biodiesel and renewable diesel was imported to the U.S., making up nearly a
third of the U.S. market, NBB said.
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