Congressional Leaders Call for Extended Tax Incentive, Renewable Fuels Standard
March 18, 2005... Saint Louis, Missouri... Biodiesel and soybean leaders commemorate National Biodiesel Day, March 18, by calling for the passage of bills extending the biodiesel tax incentive, creating a more rigorous Renewable Fuels Standard (RFS) and instituting a small producer tax credit. The National Biodiesel Board (NBB), American Soybean Association (ASA) and leading Members of Congress are emphasizing the importance of building use of American-made renewable fuels like biodiesel as another spell of high petroleum prices hits the pumps.

Biodiesel is a cleaner burning fuel made from renewable resources such as soybean oil. Its use increases energy security and extends petroleum reserves. Biodiesel took a major step forward last year when President Bush signed into law a tax incentive designed to encourage consumers to use the fuel. This historic moment would not have occurred without the steadfast support of biodiesel champions like Senator Chuck Grassley (R-IA), Senator Blanche Lincoln (D-AR) and Congressman Kenny Hulshof (R-MO).

Legislation extending the biodiesel tax incentive beyond its December 31, 2006, expiration date is expected to be introduced soon by our key champions. “We owe a great debt to our champions, Senators Grassley, Senator Lincoln, and Congressman Hulshof for their unwavering commitment to passing the excise tax credit,” said ASA President Neal Bredehoeft from his farm in Alma, Missouri. “The tax incentive has been our number one priority, and extending it beyond its two-year limit remains our most important task. We’re fortunate to have a host of champions in Congress who recognize how vital helping biodiesel succeed is to the future of this country.”

President Bush has shown his support for efforts afoot in Washington to encourage the use of biodiesel. Last week, he said one objective of energy policy “…is to diversify our energy supply by developing alternative sources of energy.” The President went on to say “Congress needs to continue strong support for ethanol and biodiesel. We're going to continue to figure out ways to grow our way out of dependence on foreign oil. Someday somebody is going to walk in and say, well, we got a lot of soybeans, Mr. President. And we're less dependent on foreign sources of oil because of biodiesel.”

In a move praised by soybean and biodiesel leaders, renewable fuels standard (RFS) legislation has been introduced establishing a national standard. One bill, under the leadership of Sen. John Thune (R-SD) requires six billion gallons of renewable fuels by 2012. Today, Senators Dick Lugar (R-IN) and Tom Harkin (D-IA) lead the effort introducing a bipartisan bill establishing an accelerated RFS bill requiring 8 billion gallons by 2012. Cosponsors include Senate Majority Leader Bill Frist, and Sens. Chuck Hagel (R-NE), Chuck Grassley (R-IA), Tim Johnson (D-SD), Kit Bond (R-MO), Jim Talent (R-MO), Ben Nelson (D-NE), Norm Coleman (R-MN), Dick Durbin (D-IL), Jim Bunning (R-KY), John Thune (R-SD), Barack Obama (D-IL), Ken Salazar (D-CO) and Evan Bayh (D-IN).

Another piece of legislation is a small producer tax credit introduced by Senator Jim Talent (R-MO) that establishes a tax credit for small “agri-biodiesel” producers, allowing producers that make up to 60 million gallons of biodiesel per year to be eligible for a ten-cent-per-gallon tax credit. Producers could receive the tax credit up to 15 million gallons of production annually.

“These bills will help build both supply and demand for biodiesel, helping what is still a young industry to take root in the American fuel system,” said Darryl Brinkmann, chairman of NBB and a soybean grower from Carlyle, Ill. “We’re so close to being in a position to make a significant dent in imported petroleum. But it’s going to take the continued bi-partisan support of Members of Congress and a strong Energy Bill that can become law this year.”

National Biodiesel Day takes place on March 18, the date of Rudolf Diesel’s birthday. The biodiesel industry chose his birthday to honor him for his foresight in recognizing the valuable role of vegetable oil based fuel. In the late 19th Century, Diesel ran early versions of his engine on peanut oil. In a 1912 speech, Diesel said “the use of vegetable oils for engine fuels may seem insignificant today, but such oils may become, in the course of time, as important as petroleum and the coal tar products of the present time.”

Biodiesel works in any diesel engine with few or no modifications. It has the highest energy balance of any fuel and can be used in its pure form (B100), or blended with petroleum diesel at any level. More than 500 major fleets use biodiesel commercially nationwide. More than 300 retail filling stations also make biodiesel available to the public. More information about biodiesel can be found at www.biodiesel.org.