U.S. Senators Joe Donnelly, Chuck Grassley (R-IA), Maria Cantwell (D-WA), and 13 other senators today introduced bipartisan legislation to reform the biodiesel tax credit and extend the new policy for three years. The American Renewable Fuel and Job Creation Act of 2017 would extend this important clean-fuel incentive for three years and reform the incentive by transferring the credit from the blenders to the producers of biofuels. The switch would ensure that the tax credit incentivizes domestic production and taxpayers aren?t subsidizing imported fuel.
Since 2014, biofuels imports have increased from 510 million gallons to about one billion gallons in 2016. Already in the first quarter of 2017, imports are 10 percent higher than they were at this time in 2016. In many cases, foreign biodiesel benefits both from the existing tax credit and from additional foreign subsidies, which makes it difficult for domestic biodiesel facilities to compete. In 2015 alone, the U.S. Treasury spent more than $600 million on tax credits for imported biodiesel and renewable diesel. The American Renewable Fuel and Job Creation Act would help the industry grow to its full potential.
Donnelly said, ?Indiana is a leading producer of biodiesel, which is an important facet of an all-in energy approach. This bipartisan legislation would promote the use of American-grown soybeans and other domestic sources of renewable biodiesel, helping to reduce our nation?s reliance on fuels imported from abroad.?
Grassley said, ?U.S. tax policy should support U.S. products and U.S. jobs. This bipartisan bill would end a system that gives many foreign producers a leg up over U.S. producers and give certainty to the biodiesel industry, which is responsible for employing thousands of Americans. U.S. producers shouldn?t be put at a disadvantage by foreign producers that in many cases are double dipping by benefiting from U.S. tax incentives on top of their own significant government subsidies. These reforms supporting domestic producers would also save U.S. taxpayers money. Policies ought to encourage the production of domestic renewable fuels to meet consumer demand and support the creation of American jobs.?
Cantwell said, ?The biodiesel tax credit already has a track record of reducing emissions, creating 50,000 jobs, and greening our economy, removing the equivalent of 16 million cars from the road. This legislation will remove millions more cars while promoting energy independence, saving taxpayer dollars, and accelerating by up to 45 percent the creation of new clean energy jobs in the domestic biodiesel production industry.?
In 2005, Congress created the biodiesel tax incentive. 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.
