IRFA Welcomes Certainty in Biodiesel Tax Treatment
December 18, 2015
Press Contact: T.J. Page
Extension of Biodiesel and Cellulosic Tax Credits Key to Help Level the Energy Playing Field
JOHNSTON, IOWA – Today, the U.S. Senate followed the House in passing a tax extenders package, including a two-year extension of the biodiesel blenders’ tax credit, providing much needed certainty for biodiesel producers across the nation. In addition, the package included a two-year extension of the cellulosic ethanol tax credit.
“We applaud Congress for providing certainty to the biodiesel community through the two-year extension of the biodiesel tax credit,” stated Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. “The retroactive extension for 2015 is key because many biodiesel producers, including some in Iowa, had to essentially bet their company’s future in hopes the tax credit would return retroactively. Looking forward, having the tax credit in place for 2016 will provide a positive assurance to the biodiesel community that will support jobs and economic activity.”
The $1.00 per gallon blenders’ credit has expired four times in six years, making it difficult for businesses to develop longer-term production and blending plans. In the face of more than 100 years of uninterrupted preferential tax treatment for petroleum, the two-year extension is welcome news for biodiesel.
“In the face of a century of subsidies for petroleum and surging biodiesel imports, we are disappointed Congress didn’t shift the biodiesel blenders’ credit to a domestic producers’ tax credit to prevent biodiesel imports from ‘double-dipping’ and undercutting U.S. production,” said Shaw. “Senator Grassley deserves much praise for his herculean efforts to protect taxpayers in this regard. Nonetheless, today’s extension provides stronger footing for Iowa’s biodiesel producers moving into 2016.”
Regarding the two-year extension of the $1.01 per gallon cellulosic ethanol tax credit, Shaw noted, “With three cellulosic ethanol facilities in Iowa, the extension of the cellulosic ethanol tax credit will help Iowa continue to lead the nation in next generation ethanol production.”
Iowa is the nation’s leader in renewable fuels production. Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually. In addition, Iowa has 43 ethanol refineries capable of producing 3.9 billion gallons annually, including nearly 55 million gallons of annual cellulosic ethanol production capacity.
The Iowa Renewable Fuels Association was formed in 2002 to represent the state’s liquid renewable fuels industry. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development.
For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org