The National Biodiesel Board (NBB), its member companies and stakeholder organizations delivered a letter to House leaders urging them to make a multiyear extension of the biodiesel and renewable diesel tax incentive an urgent priority. In February 2018, Congress retroactively extended the tax incentive for 2017, leaving it expired for 2018 and beyond.
They thanked Sens. Chuck Grassley (R., Iowa) and Ron Wyden (D., Ore.) for their bipartisan bill to immediately extend all expired tax incentives.
In the letter, the biodiesel industry stakeholders wrote, “The future of the credit has been unclear for more than 14 months. That uncertainty is curtailing investments in new plants and capital projects to upgrade existing plants. It is beginning to force some producers, blenders and distributors to cut back purchases of raw materials and deliveries of renewable fuel to consumers, which will have impacts across the economy.”
The letter continues, “The U.S. biodiesel and renewable diesel industry’s continued success is now at stake. Tens of thousands of American workers and manufacturers — as well as the millions of Americans who benefit from cleaner air and water — are depending on you to provide our industry the certainty we need to secure investments and continue growing over the next several years.”
The U.S. biodiesel and renewable diesel market has grown from about 100 million gal. in 2005, when the incentive was first implemented, to more than 2.6 billion gal. annually since 2016.
Kurt Kovarik, NBB vice president of federal affairs, added, “The biodiesel industry has long advocated for a multiyear extension of the tax incentive, but because the incentive has been expired for 15 months – the longest period of uncertainty for this policy since its start – it is urgent that Congress act immediately to provide the biodiesel industry certainty for 2018 and 2019.”
Earlier this month, Kovarik submitted written testimony to the House ways and means select revenue measures subcommittee for a hearing titled “Temporary Policy in the Internal Revenue Code.” NBB’s testimony emphasized that the industry urgently needs an immediate extension of the biodiesel and renewable diesel tax incentive to end the current climate of policy uncertainty.
In the testimony, Kovarik wrote, “While a long-term extension would provide the necessary policy certainty, our industry urgently needs an immediate extension of the biodiesel tax incentive for 2018 and 2019, at least, to end the current climate of uncertainty surrounding the industry.
“The biodiesel and renewable diesel industry cannot reach its full potential with on-again, off-again tax policy,” Kovarik said in the testimony. “Biodiesel and renewable diesel producers and blenders have been operating for as many as 14 months with the expectation that they will eventually be able to claim credits for 2018 and amend their financial statements. Individual NBB members are already being forced to put projects on hold and reduce investments due to uncertainty about renewal of the tax incentive. That uncertainty will affect future growth."