Tag Archives: biodiesel tax credit

Biodiesel Tax Credit Passed!

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The Biodiesel Tax Credit passed and was signed into law on December 18th. 

The bill was for retroactive production of 2015, and forward production of 2016 will be eligible for a $1.00 per gallon subsidy for each gallon of biodiesel produced and sold.  The credit was originally designed to be a producer’s credit for 2016, but was modified to remain as a blender’s credit.   This initially spelled a problem, but at the same time the oil export ban was lifted, meaning that a significant portion of exported diesel fuel may now contain biodiesel.  That could mean an expanding market for US biodiesel.

Coupled with the recent EPA RFS mandates volumes being finalized for previous and upcoming years, this should mean a good year in 2016 for the biodiesel industry.    If the politics further sway towards Republicans in the 2016 election, it would ironically point to better times for the renewable fuel industry.

The biodiesel industry has suffered not from lowering oil prices or increased feedstock  prices.  Well… okay, it has, but not nearly as much as it has suffered at the hands of an indecisive Legislative body that will not consistently pass a biodiesel tax credit subsidy, AND from an ever more indecisive Executive branch that will not implement and enforce RFS policy that has already been established.   Both of these issues are resolved for 2016 finally, so perhaps we can get on with the process of making biodiesel now (and making money).

US_Capitol_Building

Senate to Propose Biodiesel Tax Incentive

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From the NBB:

We’re happy to report that the Senate Finance Committee today unveiled a bipartisan “tax extenders” package that includes the biodiesel tax incentive. The committee is slated to take up the package next week.

This marks welcome progress for one of NBB’s top priorities and is an important step toward winning reinstatement of the tax incentive. The proposal, released by committee Chairman Orrin Hatch, R-Utah, and Ranking Member Ron Wyden, D-Ore., calls for a two-year reinstatement covering 2015 and 2016. The committee has scheduled a markup for the bill, which contains 52 tax incentives and is titled, “An Original Bill to Extend Certain Expired Tax Provisions”, on Tuesday, July 21.

The committee has been working on the bill in a bipartisan fashion on the bill for weeks, so we anticipate that it will have broad support in committee. However, we urge those of you with senators on the committee to contact them today and urge them to support the biodiesel incentive. Makes sure they know it is an important economic policy for their home state. To find a list of senators on the committee, click here on the committee’s website.

More information on the bill can be found here. A copy of the initial Chairman’s Mark of the bill can be found here. A revenue table for the tax extenders bill can be found here. A summary of the package can be found here.

As you know, this is the beginning of what has been a long process in past years. However, the Senate bill is a significant step forward, and it will serve as the first draft as House and Senate leaders continue negotiating how to proceed with expired tax incentives. It was critical that biodiesel was included in this proposal.

We will send another update next week after the committee markup. Meanwhile, if you have any questions, please don’t hesitate to contact our Washington office at 202-737-8801.

 

 

Biodiesel Tax Credit for 2015?

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I just received a letter in the mail today from Senator Richard Burr regarding a letter I sent him about the biodiesel tax credit some months ago.  In it, I stated that the biodiesel tax credit is actually HARMFUL the way it is being currently implemented.  That is, letting it lapse for a whole year and then reinstating it retroactively, as Congress has now done three times.

He agreed that Congress should provide businesses more certainty than the current year-to-year extensions we are currently experiencing, but claimed that attempts at longer extensions (like the 3 to 5 year tax credit I proposed) were thwarted by a veto threat from the President.

This is confusing for us in the biodiesel industry, as the President has promised that the renewable energy sector has his full support.   That, however, does not appear to be the case.  Especially in light of the political games being played with the EPA and the RFS program, which are under the control of the President.

So, at best we can appear to hope for yet again another kicking of the can down the road, and another 1 year biodiesel tax credit for 2015.  Hopefully before we see January of 2016…

You can view the Senator Burr Letter here

To add insult to injury, I received a letter from my insurance carrier showing that the “Terrorism Risk Insurance Act” was set to expire on December 31, 2014 but was somehow able to be renewed until December 31, 2020!!   It just goes to show you what a powerful lobby can do for your industry.    Here’s the letter from the insurance carrier

 

 

Back In Production

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TBI was idle for 2 months at the end of 2014 due to lack of the biodiesel tax credit and a lack of guidance from the EPA on the RFS volumes for biodiesel.  With the tax credit retroactively renewed for 2014, we are back in production for 2015.

We are once again producing SME and FAME biodiesel for bulk blenders, fleets, and retail sales in blends of B99 or B20.  Other custom blends are available upon request.

We thank you for your continued support of Triangle Biofuels and look forward to a productive year in 2015.

 

Press Release: 11 Reasons Why You Should Invest in the Biodiesel Industry

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March 28, 2013
11 Reasons Why You Should Invest in the Biodiesel Industry

GRAND FORKS, ND – (Mar. 28, 2013) – Below is breakdown of the latest, sourced information as to why investment in biodiesel is a sound decision written by Ron Kotrba, Editor of Biodiesel Magazine.

 

  1. Jump in on a growing market: The U.S. biodiesel industry is poised for its most profitable, successful year yet in 2013 with expected record-breaking production volumes thanks in part to the increased federal biomass-based diesel requirement of 1.28 billion gallons (28 percent higher than 2012), the $1 per gallon tax credit and rebounding D4 RIN prices. In addition, favorable blend economics indicate that obligated parties under the renewable fuel standard (RFS2) will find it economically advantageous* to blend U.S. biodiesel over Brazilian sugarcane ethanol to meet their advanced biofuel obligations (2.75 billion ethanol-equivalent gallons), over and above the biomass-based diesel volume requirements, suggesting the possibility of domestic biodiesel production significantly exceeding 1.28 billion gallons. *farmdoc daily
  2. Sustainable 10-year growth plan: IHS Global Insight conducted a modeling report for the National Biodiesel Board to help guide EPA with its yearly biodiesel RVO under RFS2 and, in the modeling report, the group determined that there will be enough feedstock available to reach 3.3 billion gallons of U.S. biodiesel production by 2022. Read article
  3. The National Biodiesel Board unveiled a new industry target in February 2013, named 10×22, an aggressive but achievable goal that calls for biodiesel to make up 10 percent of the U.S. diesel fuel supply by 2022. Read article
  4. Engine makers support biodiesel, why not you? All major OEMs producing diesel vehicles for the U.S. market support at least B5 and lower blends and 79 percent of U.S. manufacturers now support B20 or higher biodiesel blends in at least some of their equipment.
    Source: NBB OEM support document, Sept. 2012
  5. No blend wall here: While the ethanol industry struggles with hitting its blend wall, biodiesel penetration in the 2012 U.S. diesel fuel supply was only 1.9 percent. Given that all major OEMs support B5, achieving a 5 percent biodiesel penetration rate would mean nearly 3 billion gallons of biodiesel production (almost three times greater than 2012 production volumes). Moreover, nearly all the biodiesel used in the U.S. today is consumed by heavy-duty applications, a growing number of which support B20. To reach 20 percent penetration, the U.S. would need to produce 11.5 billion gallons of biodiesel, 10 times more than produced last year. Read article
  6. Global ethanol and biodiesel consumption combined will reach 135 billion gallons by 2018.
    Source: Global Industry Analysts Inc.
  7. Biodiesel quality continues to improve: The latest NREL quality survey results announced February 2013 at the National Biodiesel Conference show a record 97 percent of the biodiesel on the market today is within ASTM D6751 specifications. Read article
  8. 68 percent of U.S. and Canadian biodiesel productive capacity is BQ-9000-certified, meaning strict quality controls are in place—of the approximately 3 billion gallons of productive capacity in the U.S. and Canada, 1.84 billion gallons is BQ-9000-certified versus 1.24 billion gallons that is not.
    Source: 2013 Biodiesel Plant Map and the BQ-9000 site of certified producers.
  9. Greenhouse gas emissions will continue to tighten globally, and EPA has determined that biodiesel from waste achieves more than 80 percent GHG reduction compared to the fossil diesel baseline, while biodiesel made from soybean oil achieves greater than 50 percent GHG reductions.
    Source: EPA
  10. Assurance in the market: Obligated parties, third-party quality assurance plan (QAP) providers, the biodiesel industry and government have worked together to restructure the RIN program to provide more security against potential fraud. A proposed QAP rule was issued in January and a final rule is expected midyear. The proposal offers obligated parties an affirmative defense against civil liabilities from buying, trading or retiring bad RINs, and includes one option that also relieves obligated parties from paying for the replacement of any invalid RINs.
    Source: U.S. EPA
  11. Supporting biodiesel supports economic growth: The biodiesel industry spent an estimated $4.3 billion to produce 1 billion gallons of biodiesel in 2012, without the $1 per gallon federal tax credit in place all year. The biodiesel industry supported approximately 64,000 jobs in 2012, once again without the $1 per gallon tax credit. With the credit, it would have supported another 19,200, totaling more than 83,000 jobs.
    Source: NBB Fueling Action View document

About Biodiesel Magazine:
Biodiesel Magazine is a bi-monthly trade journal dedicated to objective, independent coverage of biodiesel news, events and information relevant to the global industry. With editorial focus on U.S. and international methyl ester manufacturing, trade, distribution and markets, Biodiesel Magazine also provides valuable insight into feedstock and market share competition from the non-ester renewable diesel sector. Biodiesel Magazine is owned by BBI International.

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Harkin says biodiesel tax credit should be in energy bill

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From O. Kay Henderson RadioIowa.com:

Senator Tom Harkin is pushing this week to get a tax break for biodiesel extended during the so-called “lame duck” session of congress that’s underway in Washington. Harkin wants to add the biodiesel tax credit to an energy bill that’s scheduled to come up for a vote in the U.S. Senate on Thursday.

“We need to move forward on energy legislation. We all recognize that, but there’s something terribly missing from this bill,” Harkin said during remarks on the Senate floor. “And what’s missing from this bill is any mention of biofuels and what biofuels can contribute to our energy independence in this country.”

The tax credit for blending soybean-based biodiesel expired at the end of 2009. The Iowa Biodiesel Board estimates as many as 2,500 Iowans have lost their jobs in the past year because biodiesel plants in Iowa are idle or have been closed for good because of the tax issue. Harkin is threatening to vote “no” on the energy bill if it does not include the biodiesel tax credit.

“What’s missing from the bill is really a focus, any focus at all on the one thing over the last, say, 20 years that has really decreased our dependence on foreign oil — there’s only been one — and that’s the use of biofuels for transportation,” Harkin said during a speech on the Senate floor.

Harkin’s also pressing congress to vote now to extend the federal tax break for ethanol which is set to expire at the end of this year. The tax break is 45-cents per gallon.

Biofuels Center of North Carolina Interview with TBI

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Included in this blog post is an interview with Zack Hamm of Triangle Biofuels about the status of biodiesel in the United States and how TBI is operating in the current economy.  The original post can be found on the Biofuels Center of North Carolina’s website at NC Biofuels Center TBI Interview on Biodiesel.

Click here to play the interview in your browser.

The main content of this podcast focuses on the biodiesel tax credit and how it must be renewed in order to compete with the heavily subsidized petroleum industry.

Struggle continues for biodiesel tax credit

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With our congress busy fretting over raising taxes, the health care bill, the BP oil spill, and other less significant matters, the biodiesel tax credit has gone by the wayside.

For a supposedly bipartisan issue (renewable fuel that is domestically produced), biodiesel has been stuck in the Senate at least 4 times that I am aware of.  It now sits as Senate bill S.1589 and House Bill H.R. 4070, both of which are a much needed multi-year tax credit for biodiesel.  A couple of calls to my congressmen informed me that HR 4070 is in the Ways and Means Committee (as it has been for a year) and the House is apparently waiting on the Senate for a first move on it, since they’ve sent similar bills which have died in the Senate three times now.

Yikes.  I’ve watched 5 biodiesel plants go out of business this year.   How can our Congress be so obtuse?  We need renewable, domestic energy.  Biodiesel is an immediate drop-in replacement for petroleum diesel.  What is the problem here exactly?

Who cares if it’s “green” or not? (It is.)  Who cares if it “create jobs” or not?  (It does.)  We can stop sending money to the Middle East right now by using biodiesel. Sure, it’s not going to replace all petroleum diesel.  We’ve got to find other solutions too.  But we’re spending over $315 Million dollars per day on foreign oil just from the Arabs.  Even a 10% reduction would be a savings of over $1.1 Billion dollars per year.  Money that would be spent right here in the USA.

I have a hard time understanding what is so complicated about this in Washington.  Perhaps I should send my 9 year old daughter to explain it to them.  Even she gets it.

A view of a Middle Eastern Oil Field

EU Probing U.S. Biodiesel Tariffs – Ha!

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From the Wall Street Journal:

BRUSSELS—The European Commission said Thursday it would investigate whether U.S. biodiesel is being shipped through third countries to avoid tariffs placed last year on direct shipments from the U.S. to the European Union.

The commission, the EU’s executive arm, also said it would examine whether U.S. producers are shipping their product in blends that contain less than 20% pure biodiesel to avoid the tariffs, which only apply to blends containing more than 20%.

Ahhh,, in a word “Yes”.  Within a month after the EU passed the tariff, we were contacted by an exporter that wanted to buy our biodiesel to export to Europe through the Caribbean.   We declined, as we believe in using it domestically (over 95% of our fuel is used here in North Carolina).  The exporter, ironically is now out of business.

But the bigger irony is that biodiesel production has basically been crippled in the United States because of the failure of Congress to pass the biodiesel tax credit, and because of other encumbering and onerous government compliance reporting programs that are choking the industry.

According to DOE reports, in 2008, there were approximately 678 Million gallons of biodiesel produced in the USA.  In 2009, production appears to be less than 200 Million.  The 2010 DOE biodiesel production data are not released yet, but given the tax credit was not renewed in December of 2010, estimates are as low as 50 Million gallons of biodiesel will be produced in all of 2010. I know the NBB national convention was a ghost town this year in Dallas, compared to previous years attendance.

I don’t think the the EU needs to do a thing here.  Just sit back and watch our renewable fuel economy shrivel up and die.  Our congress is doing all the work for them.  Problem solved.

All the squawking by the President and Congress about supporting domestic renewable fuels, supporting small business, and creating “green” jobs appears to just be smoke.  So what exactly is the EU really worried about here?  Kicking a dying horse when it’s down?

The full WSJ article is here: http://online.wsj.com/article/SB10001424052748704407804575424750813493056.html and is worth reading since it talks about Europe being the biggest biofuel market in the world.  That means it’s bigger than Brazil’s ethanol (and soon biodiesel) economy and our own here in the USA, yet the USA is by far the largest consumer of petroleum fuel in the world.  Shouldn’t we be the largest biofuel market in the world, just by sheer statistics?

It would therefore be easy to presume that the support for the petroleum industry and lack of initiative towards the biofuel industry must be intentional, otherwise it would not be so.

Biofuels in the USA is a complex issue apparently, but it shouldn’t be.  Biodiesel is renewable, domestic, clean, and supports local jobs and local agriculture.  If you’re reading this and never have tried biodiesel in your diesel car or truck, why not?  Try it, ask for it at your gas station, google “biodiesel” and find your nearest producer.   Let’s start using biodiesel here at home where it will help everybody in this country and let the Europeans find something else to complain about us over.