Biodiesel tax credit is back
Iowa producers can now look forward to robust growth
In 2017, Congress failed to extend a key assist to a new and growing industry. The biodiesel tax credit was allowed to expire. This $1-a-gallon credit was designed to subsidize renewable biodiesel production so a young industry could grow to the point where it would no longer need government help. Letting the tax credit end made it harder for existing biodiesel producers to to evolve and prosper. It also discouraged others from launching biodiesel plants.
Congress has not been consistent in its support for this promising industry. It has allowed the tax credit to expire four times since 2009. That is unfortunate because a robust biodiesel industry can help America achieve its long-term goal of having diverse sources of energy. Biodiesel producers also have the potential to be important contributors to the Hawkeye State’s economy. Consequently, all Iowans benefit when biodiesel producers thrive.
That’s why U.S. senators Charles Grassley and Joni Ernst have worked hard during the last two years to get the biodiesel tax credit reinstated. Fortunately, that was finally accomplished in December 2019. Congress made the credit retroactive for all of 2018 and 2019. That is making it possible for producers to recover some of the loss in financial strength that was caused by the long period when the tax credit was not in place.
To make that recovery occur more quickly, Grassley and Ernst have just written jointly to the commissioner of the Internal Revenue Service urging the quickest possible processing and payment of the retroactive tax credits.
“With our strong support, Congress took action and renewed the tax incentive for five years in order to support this important industry and provide a positive market signal,” the two senators wrote. “Timely payment of claims for 2018 and 2019 is necessary for the recovery of the entire biodiesel industry, including producers, blenders and farmers.”
This newspaper agrees strongly and applauds the hard work by Grassley and Ernst in looking out for the biodiesel industry in our state. It is sad – and quite frankly inexcusable – that Congress let this tax credit expire and took so long getting it back online. Fortunately, our senators continued to press for action and were finally successful in this quest.
Despite the setback the delay in getting the tax credit back in place brought about, Iowa’s 11 biodiesel facilities currently have the ability to produce nearly 400 million gallons annually. As this industry expands it will provide an increasingly important market for soybean growers. That’s good news for agriculture in Iowa and for continued prosperity in our state.