Lincoln & Coleman Introduce Bill to Extend Biodiesel Tax Incentive to 2017
NBB applauds legislation needed for long-term industry growth

JEFFERSON CITY, Mo.– The National Biodiesel Board (NBB) praised Senators Blanche Lincoln (D-AR) and Norm Coleman (R-MN) for introducing legislation today to extend the federal excise tax credit and income tax credit for biodiesel to 2017. If adopted, the legislation would continue the era of growth in the biodiesel industry that similar Lincoln-sponsored legislation launched when it became law in 2004.

“Senator Lincoln is again blazing trails for biodiesel to boost America’s energy security, economy and the environment, including climate change,” said NBB Chief Executive Officer Joe Jobe who was in Washington, D.C. for the bill’s introduction. “Extending the tax incentive gives confidence for continued biodiesel industry growth.”

On Oct. 10, 2004, Congress passed the original biodiesel tax incentive as part of legislation known as the American JOBS Creation Act of 2004. In that year, the U.S. biodiesel industry had 22 plants with a capacity to produce 157 million gallons of fuel. The tax incentive gave the industry confidence to invest. Today, the industry has added significant new energy-producing capabilities to the nation. Biodiesel producers have grown more than 4-fold, with 105 plants capable of producing 864 million gallons of biodiesel in locations from coast to coast.

“Our American agricultural producers and domestic companies have demonstrated their commitment to energy independence through the production of renewable fuels like biodiesel,” Sen. Lincoln said. “It’s time for Congress to follow its initial work and make the necessary investment for continued progress and development. I look forward to working with advocates of alternative energy sources like the National Biodiesel Board towards our shared goal of promoting greater production of renewable fuels.”

“Biodiesel is central to our efforts to free America from our dangerous dependence on foreign oil,” Sen. Coleman said. “By passing the long-term extension of the biodiesel tax credit contained in this bill, we can help ensure that production of this critical renewable fuel continues to grow. In Minnesota, the only state in the nation with a 2 percent biodiesel standard, we know that renewable fuels mean cleaner air and water, lower prices at the pump, and more jobs. With three biodiesel plants on line in Minnesota, we need certainty with these tax credits in order to build upon the progress we are already making.”

Senators Lincoln and Chuck Grassley (R-IA) as well as Representatives Earl Pomeroy (D-ND) and Kenny Hulshof (R-MO) have championed the biodiesel tax incentive. Structured as a federal excise tax credit, the incentive makes biodiesel more cost competitive for consumers in taxable markets, such as the trucking industry, and tax-exempt markets, like school districts. The tax credit took effect in 2005 and is currently set to expire in 2008.

Public opinion research shows that 82% of Americans – a wide majority – support a federal tax incentive for biodiesel. They view energy security as the number one reason to support the growth of biodiesel, but also cite health, environmental and economic benefits.

Biodiesel’s economic benefits are documented by a study that the NBB released in November. According to the economic analysis by John M. Urbanchuk of LECG, the aggregate economic benefits of biodiesel include:

• America’s biodiesel industry will add $24 billion to the U.S. economy between 2005 and 2015, assuming biodiesel growth reaches 650 million gallons of annual production by 2015.



• Biodiesel production will create a projected 39,102 new jobs in all sectors of the economy.



• Additional tax revenues from biodiesel production will more than pay for the federal tax incentives provided to the industry. It will keep $13.6 billion in America that would otherwise be spent on foreign oil. This total impact of biodiesel on the economy includes the temporary impacts of construction, the permanent impacts of annual production and the direct value of biodiesel and co-products (glycerine).