After going without for nearly 2 years, a five-year extension of the biomass-based diesel tax credit will be coming as part of a year-end tax extenders package.
It's the result of an agreement between U.S. Senate and House leadership following negotiations led by Senator Chuck Grassley to extend the tax credit retroactively for 2018 and 2019 and through 2022. The credit has been expired since December 2017. The bill also included an extension of the cellulosic ethanol credit through 2020.
Grant Kimberley, executive director of the Iowa Biodiesel Board and Iowa Soybean Association director of market development, says that if passed, the bill would provide desperately needed relief to biodiesel producers in Iowa and beyond, who have endured years of uncertainty and loss.
“Congress’s five-year biodiesel tax credit extension would come just in the nick of time to save thousands of jobs connected to biodiesel production. This extension is exactly what we need to foster steady, predictable growth of biodiesel. Not only would this save more plants from closing – it would set the stage for a biodiesel renaissance, and give agriculture a much-needed boost, too," says Kimberly. “We express the utmost gratitude to Sen. Chuck Grassley, our most ardent champion, for fighting for this policy. The entire U.S. biodiesel industry owes him our humble thanks for his leadership. Sen. Joni Ernst also deserves our heartfelt gratitude for her persistence. All of Iowa’s U.S. Representatives played a major role in getting us to this point – in particular, we thank freshman Rep. Abby Finkenauer, who made this a top political priority, sponsoring bills and organizing letters, fighting to keep this bipartisan energy policy in front of democratic leadership alongside Rep. Dave Loebsack, another longtime champion. Rep. Cindy Axne, another freshman democrat, also showed tremendous leadership and commitment.”
“Passage of the biodiesel tax credit is much-needed good news in rural America,” said Iowa Renewable Fuels Association Executive Director Monte Shaw. “We thank Senator Grassley for working into the wee hours of the morning to ensure this crucial policy finally moves forward. This credit has long been a priority for the Senator, and as Chairman of the Senate Finance Committee he has shepherded it through to spark the growth of next generation biofuels.
“For nearly two years biodiesel producers have operated with great uncertainty. The absence of the tax credit harmed the financial viability of the biodiesel industry and threatened its future. Today’s bill provides a multi-year path forward for this young industry – boosting biodiesel production, securing jobs in rural communities, and enhancing greenhouse gas reductions.”
While Senator Grassley has fought for the past two years to reinstate the tax credit, part of the challenge to passage was making the credit a priority for House leadership.
“We thank Congresswomen Abby Finkenauer and Cindy Axne for working diligently among their colleagues in the House to build support for the credit and impressing upon their leadership just how important the biodiesel credit is to rural America,” Shaw said. “Iowans remain united behind a growing role for biofuels and today's news provides a boost for Iowa's economy heading into a new year.”