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Biodiesel industry needs help

Important tax credit needs prompt renewal by Congress

Congress needs to act promptly to reinstate important tax provisions that assist the biodiesel industry. A biodiesel tax incentive that originally became law in 2005 was allowed to expire at the end of 2017. That tax benefit helped biodiesel producers grow nationally from generating a mere 100 million gallons in 2005 to manufacturing more than 2.6 billion gallons annually in recent years.

It had been assumed that this key tax credit would eventually be restored with its full provisions made retroactive. Unfortunately, that still has not taken place. That’s why industry representatives met in Washington Wednesday with Midwestern political leaders including Iowa U.S. Sens. Charles Grassley and Joni Ernst to express their alarm about the delay.

“It’s past time to extend the biodiesel tax credit that provides thousands of jobs in Iowa and supports rural communities,” Grassley, who has introduced legislation in the Senate to extend the biodiesel tax credit, said in an Instagram post. “Unfortunately, we continue to wait for the House Democrats to send the Senate an extenders bill.”

Biodiesel is important to Iowa. Our state is a leading producer. The Hawkeye State’s 12 biodiesel plants produce approximately 305 million gallons of biodiesel each year. The industry adds $456 million to the state’s economy annually and generates about 4,000 jobs.

“Biodiesel companies like mine, Western Dubuque Biodiesel in Farley, Iowa, and plant workers nationwide face an increasingly uncertain future due to the long lapse of the federal biodiesel tax incentive,” Tom Brooks, chair of the Iowa Biodiesel Board, said in a statement issued Wednesday. “This energy policy has served as a key driver for leveling the playing field with oil and encouraging American-made renewable energy. But Congress has allowed it to lapse for 16 months. … The market has always assumed the incentive would come back.”

The Messenger agrees with Grassley that the time is long past when Congress should bring this important tax provision back into force. Grassley’s bill is moving through the Senate but progress has been slower on an identical bill that awaits action in the U.S. House of Representatives.

This tax incentive is good for Iowa. It is also good for America. Encouraging the production of renewable fuels diversifies our nation’s energy capabilities. It also creates jobs and strengthens the economy in communities where plants are located.