Congress has unfinished business with biodiesel producers

Before Congress adjourns for the year, it has some unfinished business. Our elected officials must provide American biodiesel and renewable diesel producers certainty for 2018 and beyond with an extension of the currently expired tax incentive. With little time left on the calendar, it has to become a priority.

Early this week, 60 companies and organizations from all segments of the biomass-based diesel value chain sent a letter to congressional leaders, urging them to take action on a proposed multi-year extension of the tax incentive. The signers include agricultural producers, biodiesel producers, blenders and marketers from across the country who feel the urgency of extending the biodiesel tax incentive.

{mosads}In February 2018, Congress retroactively extended this tax incentive for 2017, but left it expired for this year and beyond. Our industry doesn’t want that to happen again. The uncertainty created by on-again, off-again policy limits our growth. A multiyear extension of the tax incentive is necessary to drive growth for the future, create employment and rural economic growth opportunities, as well as build a vitally important market for agricultural products and renewable resources.

Biodiesel is an American success story, and the tax incentive has been key to that success. It has encouraged investment in infrastructure, production capacity and market development. Since 2005, the U.S. biodiesel and renewable diesel industry has grown from a few hundred million gallons of production to more than 2.6 billion gallons. A multiyear extension of the credit can help the industry continue to stimulate economic growth, create jobs and provide environmental benefits.

Producing and using biodiesel here at home supports more than 60,000 jobs across the United States and across multiple economic sectors, including transportation and agriculture. Growth of the industry supports additional jobs; every 100 million-gallon increase in production supports an additional 3,200 jobs.

Biodiesel production also creates an essential market for a diverse set of resources, such as recycled cooking oil, vegetable oils and animal fats. Nationwide, recycled cooking oil and rendered animal fats make up 30 percent of biodiesel raw materials. The biodiesel market adds 11 cents in value to vegetable oils — about 60 cents per bushel of crops such as soybeans and canola. That value is crucial to farmers this year, with farm income facing another year in the doldrums.

The benefits spread throughout the economy. Biofuels reduce our nation’s need to import oil. Reduced demand for oil eases pressure on fuel prices around the world. Overall, the price U.S. truckers and drivers pay for every gallon of diesel would be at least 17 cents higher without homegrown production of biodiesel and renewable diesel. That would add up to a $10.6 billion annual hit on U.S. consumers’ wallets.

Biodiesel is a truly advanced biofuel. The Environmental Protection Agency recognizes that biodiesel is at least half as carbon-intensive as petroleum diesel. And the U.S. Department of Energy’s Argonne National Lab shows that biodiesel reduces carbon emissions by much more. Biodiesel use significantly reduces particulate and hydrocarbon emissions that pollute the air and cause serious human health problems.

A multiyear extension of the biodiesel and renewable diesel tax credit will ensure that these benefits increase.

Congress must provide stability and predictability for America’s biodiesel producers with a multiyear extension of the tax credit. When the tax incentive is in place, the biodiesel industry is able to plan for the future, make necessary investments and grow with confidence. The industry does not reach its full potential and provide the full benefits it can when the tax incentive is extended retroactively or for only a year at a time. The time for Congress to act is now.

Donnell Rehagen is CEO of the National Biodiesel Board, a trade association representing the industry.