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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