The American Soybean Association (ASA) is pleased to report that the U.S. Senate Finance Committee yesterday approved an energy tax package that includes the provisions of S. 355, legislation providing a tax incentive for biodiesel. Introduced by the Chairman of the Finance Committee, Senator Chuck Grassley (R-IA), and Senator Blanche Lincoln (D-AR), S. 355 would provide a one-cent reduction in the diesel fuel excise tax for each percentage of biodiesel blended with petroleum diesel up to 20 percent.

"In a time of global instability and uncertainty, we should do all we can to develop domestic sources of alternative energy," said Senator Lincoln. "Biodiesel shows great promise as an efficient, cost-effective fuel source. I’m delighted that these crucial incentives have been included in the Finance Committee’s energy tax package so that we can encourage the market for biodiesel to expand."

"This green-energy legislation recognizes the diverse benefits of Iowa’s abundant soybean crop with a new income tax credit and excise tax reduction for biodiesel fuel mixtures," said Senator Grassley. "This tax incentive will help diversify our ag-based economy and accelerate the research, development and investment necessary to spur production of green energy sources using raw farm commodities."

There are many benefits of increased biodiesel use. A recent Environmental Protection Agency (EPA) report of biodiesel emissions confirms substantial reduction of unburned hydrocarbons, carbon monoxide, and particulate matter compared to emissions of petroleum diesel. Likewise, as its primary feedstock – soybeans – is grown here in the U.S., it lessens our nation’s dependency on foreign oil. Increased biodiesel use would also provide a much-needed boost to the struggling farm economy.

"Securing passage of a biodiesel tax incentive is a top priority for U.S. soybean farmers this Congress, and we can’t thank Senators Grassley and Lincoln enough for helping us work towards this goal," stated ASA First Vice President and National Biodiesel Board (NBB) Director Ron Heck from his farm in Perry, Iowa. "With Senators Grassley and Lincoln leading the charge, the future is indeed bright for biodiesel."

The Finance Committee-passed Energy Tax Package now moves to the full U.S. Senate where it is expected to be incorporated into a Comprehensive Energy Bill, once it is crafted and approved by its respective committee. On the House side, U.S. Congressman Kenny Hulshof (R-MO) introduced H.R. 1279, legislation with provisions similar to S. 355.

"While the Finance Committee’s action was a significant victory for biodiesel, more steps remain in the legislative process for the biodiesel tax incentive to be enacted into law. The ASA now calls on the full Senate and the U.S. House of Representatives to follow suit," concluded Heck.