Challenges for biodiesel industry impacting national economy and environment

An extension of a $1-per-gallon biodiesel tax credit originally enacted in 2004 is being urged in Congress. The tax credit, which expired Dec. 31, 2009, encouraged businesses and consumers to use biodiesel to reduce the nation’s dependence on foreign oil.

MarketWatch reporter Steve Gelsi echoes, “Despite Washington's promotion of ‘green’ jobs, the biodiesel industry could instead deliver green-collar layoffs if the program isn't revived.”

Biodiesel is a domestic, renewable fuel made primarily from soybeans that is biodegradable and cleaner burning than petroleum diesel fuel. It aids in job creation, offers energy security and promotes a healthier environment. For these reasons, a retroactive extension of the biodiesel tax credit, directly reflected in the price of fuel at the pump, is being sought in Congress.

Last year, the U.S. biodiesel industry displaced more than 26 million barrels of foreign oil, supported nearly 23,000 jobs in all sectors of the economy, added more than $4 billion to the nation’s GDP and generated $866.2 million in tax revenue for federal, state and local governments.

“The U.S. has nurtured its biofuels industry to this point, and it would be a shame to see it slide back because the federal government failed to renew critical tax breaks for producers,” said a columnist in Kansas’ Hutchinson News.

Without domestic biodiesel production to offset the country’s energy costs, gas prices would increase between 20 cents and 35 cents per gallon, according to the U.S. Department of Energy. If the tax-credit extension is not passed, the average U.S. household will not experience the $150 to $300 savings it did in 2008.

In a letter to House Democratic Leadership Jan. 8, Iowa Reps. Leonard Boswell, Dave Loebsack and Bruce Braley urged for quick passage of the biodiesel tax-credit extension when the House returns for session.

Failure to extend the credit means that biodiesel will now be significantly more expensive in the marketplace than petroleum diesel fuel. As a result, the production and use of biodiesel throughout the nation has been severely curtailed and layoffs for workers in businesses supported by domestic biodiesel production are imminent, directly affecting the prosperity of biodiesel plants, biodiesel distributors and biodiesel retail fuel stations.

"Pretty much every biodiesel-production plant is idle," said Michael Frohlich, director of communications for the National Biodiesel Board (NBB).

The domestic production and use of biodiesel provides critical economic, security and environmental benefits that cannot be ignored.

Do you use or do you know anyone that uses biodiesel? Do you think consumers are aware of the effects domestic biodiesel production has on this country? Should greater emphasis be given to this issue by the Obama administration?