Reuters UK is reporting out of Washington, DC that Senators Max Baucus (MT) and Charles Grassley (IA) have pledged to “take up legislation next year to extend the biodiesel tax credit as it looks likely action will not be taken” this year.The obvious reason action won’t be taken up this year is that today is December 23, the credit expires on December 31, and Congress doesn’t look like it is going to do anything between now and then other than health care. So, the calendar forces the senators to wait until 2010 to take legislative action.
This is to the chagrin of some in the industry who fear plants will have to shut down if nothing is done before the credit expires. Still, Reuters reports that Baucus and Grassley, the Chairman and Ranking Members, respectively, of the Senate Finance Committee, which has jurisdiction over the dollar-per-gallon credit, are committed to acting fast on the issue. Additionally, the two pledged to take up “an array of other tax breaks [that have become linked to the biodiesel tac credit] as soon as possible after Congress convenes next year.”
The renewable fuels industry, for their part, is frustrated with the process. According to Reuters, the industry had wanted a five-year extension passed this year, but all the House gave the industry was an extenders bill that runs through 2010. Monte Shaw, director of the Iowa Renewable Fuels Association call the situation ‘“frustrating”’ and stated to Reuters that ‘“Congress has really dropped the ball on this.”’
The fear of the industry is that refiners will become worried about the credit for blending the fuel, and so will start cutting contracts to make the fuel. The White House issued this statement about the extension of the tax credit, saying it “would provide ‘clean energy companies with the certainty they need to make critical investments in the nation’s energy future.”’
As Reuters reports, soybean oil is critical to making biodiesel and eleven percent of the current crop will be used to make biodiesel fuel, according to the US Department of Agriculture. The American Soybean Association has said that if the credit is not renewed farmers could see the prices they get per bushel drop by 25 cents or more.
To read the Reuters UK article on the tax credit, click here.
Posted: 12/23/09
