Cantwell, Grassley, Twelve Fellow Senators Introduce Biodiesel Tax Credit Reform, Extension Act
Bill would “level the playing field” for WA-produced, low-carbon intensity biofuels
WASHINGTON, D.C. – Today, Sen. Maria Cantwell (D-WA), ranking member on the Senate Energy and Natural Resources Committee, and Sen. Chuck Grassley (R-IA) led 12 fellow senators today in introducing bipartisan legislation to reform the biodiesel tax credit and extend the new policy for three years. The reforms are similar to the provisions that Grassley and Cantwell have long proposed and that passed out of the Finance Committee last year.
“The strength of our economy, energy security, and environment rely on investing in America’s clean energy economy,” Cantwell said. “With the help of the biodiesel tax credit, the United States has been able to produce 8.2 billion gallons of biodiesel to replace traditional diesel, the equivalent of removing nearly 16 million vehicles from our roadways. By extending and reforming the tax credit, we can ensure US producers, not our foreign competitors are receiving the credit – creating more jobs here at home.”
“The reforms would support domestic biodiesel producers and stop subsidizing foreign biodiesel producers,” Grassley said. “There’s no reason for foreign producers to reap the benefit of a U.S. tax incentive when so many foreign governments heavily subsidize their own biodiesel industries. The reforms emphasizing support for domestic producers would have the added benefit of saving U.S. taxpayers money over the current tax credit. Policies ought to continue encouraging the production of domestic biodiesel to meet consumer demand and support jobs nationwide.”
Joining Grassley and Cantwell to co-sponsor the Biodiesel Tax Incentive Reform and Extension Act of 2016 are Sens. Pat Roberts (R-KS), Heidi Heitkamp (D-ND), John Thune (R-SD), Sheldon Whitehouse (D-RI), Mark Kirk (R-IL), Martin Heinrich (D-NM), Joni Ernst (R-IA), Joe Donnelly (D-IN), Roy Blunt (R-MO), Mazie Hirono (D-HI), Al Franken (D-MN) and Patty Murray (D-WA).
The bill would make the tax credit available for the domestic production of biodiesel, rather than the current policy of a mixture credit available to the blender of the fuel.
The change would offer numerous benefits, Grassley and Cantwell said. The blenders credit can be difficult to administer, because the blending of the fuel can occur at many different stages of the fuel distribution. This can make it difficult to ensure that only fuel that qualifies for the credit claims the incentive. It has been susceptible to abuse because of this.
“The Cantwell-Grassley bill will level the playing field for domestically-produced, lower carbon intensity biodiesel like we make at REG Grays Harbor and prevent American tax dollars from further incentivizing imported fuel,” said Aaron Leatherman, Manager of Renewable Energy Group’s Grays Harbor biodiesel refinery. “We at Renewable Energy Group thank Senator Cantwell for her long-standing commitment to this common sense tax reform that would encourage more production of cleaner-burning fuel, and create good paying jobs, right here in Washington state.”
A credit for domestic production would ensure that the United States is incentivizing the domestic industry rather than subsidizing imported biofuels. It’s projected that imports from Argentina, Indonesia, Singapore, the European Union, South Korea and others could exceed 1.8 billion gallons over 2016 and 2017. In many cases, foreign biodiesel is already heavily subsidized, so U.S. taxpayers should not be providing a subsidy to such imports.
"At a time when the country is deeply concerned with jobs being sent overseas, this change to the biodiesel credit will keep and grow skilled jobs in America,” said Jeff Haas, CEO of General Biodiesel Northwest, in Seattle.
Grassley and Cantwell said modifying the credit would have little to no impact on the consumer. Much of the credit would continue to be passed on to the blender and ultimately, the consumer. Additionally, the U.S. biodiesel industry is currently operating at approximately 55 percent of capacity. The domestic biodiesel industry has the capacity and access to affordable feedstocks to meet the demand of U.S. consumers, the senators said.
Cantwell has long supported the development and commercialization of biofuel to help reduce our nation’s dependence on petroleum-based fuels and better protect the environment. She joined with Grassley to introduce similar legislation promoting biodiesel in 2014 and 2015. In 2007, Cantwell helped author the Renewable Fuels Standard, which, along with increasing vehicle fuel economy standards, have helped reduce our nation’s dangerous overdependence on oil.
The Biodiesel Tax Incentive Reform and Extension Act of 2016 would extend the new policy for three years starting Jan. 1, 2017.
The bill would allow the nation to continue enjoying the significant benefits of biodiesel since Congress created the biodiesel tax incentive in 2005 when Grassley was chairman of the Finance Committee. As a result of this incentive, the Renewable Fuel Standard, and consumer interest, biodiesel is providing significant benefits to the nation. Domestic biodiesel production supports tens of thousands of jobs. Replacing traditional diesel with biodiesel reduces emissions and creates cleaner air. Homegrown biodiesel improves U.S. energy security by diversifying transportation fuels and reducing dependence on foreign oil. Biodiesel itself is a diverse fuel that can be produced from a wide array of resources such as recycled cooking oil, soybean and other plant oils, and animal fats.
###
Next Article Previous Article
