Federal biodiesel tax credit expires

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Updated Jan 13, 2010

biofuel pumpThe federal tax credit that provided makers of biodiesel $1 for every gallon expired Thursday, Dec. 31. The National Association of Truck Stop Owners last month had urged Senate leaders to quickly extend the tax credit before it expired to ensure an affordable biodiesel supply for the nation’s 3.5 million truck drivers and to secure the environmental investments of the nation’s truckstops and travel plazas.

Lisa Mullings, NATSO president and chief executive officer, said last month that extending the tax credit would increase biodiesel production while spurring retail investment in the infrastructure necessary to supply biodiesel to commercial carriers and the motoring public. Mullings’ request had come just days after the U.S. House of Representatives had passed a one-year extension of the current $1 per gallon tax blender credit for biodiesel.

“Our members want to support green initiatives,” Mullings said last month. “But they are concerned that if they make the investment in biodiesel fueling infrastructure and the tax credit isn’t renewed, they won’t be able to sell the biodiesel because of the price disparity between biodiesel and other fuels. We would like to see the tax credit extended so that fuel retailers will be to make these investments.”

Promoting biodiesel as part of a comprehensive national energy strategy, which includes strict quality standards, is vital to ensuring an adequate, uninterrupted supply of fuel, according to NATSO; a biodiesel tax credit lapse will grind biodiesel production to a halt, further distressing an industry that has encountered significant hardship over the last year.

Congress imposed biodiesel production mandates in recent years to stimulate renewable fuel development. Without an extension of the tax credit, however, the production mandate will become meaningless as consumer demand for the product eroded, NATSO said last month.

The biodiesel tax credit, part of the “extenders” package known as H.R. 4213, included $5 billion in individual tax relief, $17 billion in business tax relief, $1.2 billion to encourage charitable giving, $2.6 billion for disaster tax relief provisions and more than $1 billion to extend expiring energy tax provisions.