Tuesday morning it was announced that bill of tax credit extensions, or “extenders” was agreed to in Congress. It is a package we have been waiting for a few years as the last credits expired on December 31st, 2017. Senator Grassley updated Ag media on the announcement in his weekly address.
Senator Grassley said the effects of the biodiesel tax credit expiration was being felt across the industry, even here in Iowa, where two plants have been idled.
The new provision will retroactively cover the credits which were missed in 2018 and 2019, and then extend the credits through 2022.
Grassley said this provision has made it out of the rules committee and will be included in the appropriation bill.
Reactions to the provision came in this morning. The Renewable Fuels Association released the following statement:
“This is welcome news for the entire renewable fuels industry, and we thank Senator Grassley and the other leaders who made this important compromise possible. While we continue to advocate for prospective, longer-term certainty for the second-generation biofuel producer credit and other relevant tax provisions, we are grateful this deal was reached to retroactively reinstate the lapsed second-generation biofuel provisions and extend them through 2020. We also appreciate the renewal and extension of the biodiesel and renewable diesel credit, as more than 2 billion pounds of corn distillers oil from ethanol plants are converted annually into the lowest-carbon source of biodiesel and renewable diesel available on the market today.
“The ethanol industry continues to support smart tax policy that enables long-term growth and investment in low-carbon renewable fuels, and today’s deal helps level the playing field against a fossil fuels industry that has reaped billions upon billions in tax incentives, subsidies, and write-offs. We urge Congress and President Trump to move swiftly to pass and enact these important provisions that have languished for years.”
The Iowa Renewable Fuels Association also weighed in:
“Passage of the biodiesel tax credit is much-needed good news in rural America,” said Iowa Renewable Fuels Association Executive Director Monte Shaw. “We thank Senator Grassley for working into the wee hours of the morning to ensure this crucial policy finally moves forward. This credit has long been a priority for the Senator, and as Chairman of the Senate Finance Committee he has shepherded it through to spark the growth of next-generation biofuels.
“For nearly two years biodiesel producers have operated with great uncertainty. The absence of the tax credit harmed the financial viability of the biodiesel industry and threatened its future. Today’s bill provides a multi-year path forward for this young industry – boosting biodiesel production, securing jobs in rural communities, and enhancing greenhouse gas reductions.”
“We thank Congresswomen Abby Finkenauer and Cindy Axne for working diligently among their colleagues in the House to build support for the credit and impressing upon their leadership just how important the biodiesel credit is to rural America,” Shaw said. “Iowans remain united behind a growing role for biofuels and today’s news provides a boost for Iowa’s economy heading into a new year.”
The American Soybean growers released the following statement:
“Soy growers have faced several obstacles over the past two years—a down farm economy, a trade war, lapsed tax credits and biodiesel plants closing across the country,” said Rob Shaffer, ASA director and chair of the organization’s Biodiesel and Infrastructure Committee, who also serves on NBB. “ASA is grateful to Congress for its support of the tax credit—which will help expand markets for soybean growers during an unsteady time. And I appreciate each of the soy growers and biodiesel industry partners who took time out of their fields to advocate passing this incentive before the end of the year.”