Extends Biodiesel Tax Incentive and Creates Renewable Fuels Standard

The American Soybean Association (ASA) and National Biodiesel Board (NBB) applaud the Senate for passing an Energy Bill today containing important biodiesel provisions. The Senate Energy Bill extends the biodiesel tax incentive through 2010, which was the soybean and biodiesel industry's No. 1 legislative priority. It also creates a Renewable Fuels Standard (RFS) requiring the use of 8 billion gallons of renewable fuels, like biodiesel and ethanol, by 2012. NBB and ASA call for support of the provisions as the Senate goes into conference with the House, which passed its version of the Energy Bill in April.

"Soybean growers thank the many champions in the Senate who saw the importance of this landmark energy legislation that is good for biodiesel and good for America," said ASA President Neal Bredehoeft, a soybean producer from Alma, Mo. "With record oil prices, our entire nation will benefit from this legislation that helps shift us away from foreign oil while it boosts America's demand for soybean oil. Congress needs to quickly go to conference and send a final Energy Bill to the President that retains these important biodiesel provisions."

"The biodiesel tax incentive passed last year, has truly jumpstarted the biodiesel industry," said NBB Chairman Darryl Brinkmann, a soybean farmer from Carlyle, Ill. "As a result, the demand for biodiesel has reached record levels. The biodiesel tax extension, gives biodiesel producers the confidence to expand to meet this growing demand."

Thanks to Senate Finance Committee Chairman Chuck Grassley (R-IA), the bill extends the biodiesel tax incentive through December 31, 2010, offers tax incentives for farmers who wish to build biodiesel plants, and tax incentives for fueling infrastructure for B20 blends at retail stations. The provisions have received strong bipartisan support from leaders such as Senator Blanche Lincoln (D-AR) and Representative Kenny Hulshof (R-MO).

In May, Senators Jim Talent (R-MO) and Tim Johnson (D-SD) introduced an amendment to the Senate Energy Bill that would require the use of 8 billion gallons of renewable fuels, like biodiesel and ethanol, by 2012. The Talent-Johnson provision establishes a phase-in for renewable fuel volumes over 7 years, beginning with 4 billion gallons by 2006 and ending at 8 billion gallons in 2012. It grows proportionately with fuel consumption after that. It is estimated that the RFS will help create more than 230,000 new jobs in every sector of the economy.

A recent survey of registered voters found that 79 percent support extending the current biodiesel federal tax incentive in order to encourage biodiesel use. The same survey also showed 74 percent support establishing an 8 billion gallon per year RFS in an effort to reduce U.S. dependence on foreign oil and improve air quality.

Biodiesel is a cleaner burning alternative fuel that can be used in any diesel engine in pure form or blended with petroleum diesel. It can be made from any fat or oil, such as soybean oil, produced here in the United States. Biodiesel significantly reduces emissions such as carbon monoxide, unburned hydrocarbons and particulate matter. It is nontoxic, biodegradable and essentially free of sulfur and aromatics.

Biodiesel offers similar fuel economy, horsepower and torque to petroleum diesel while providing superior lubricity. Today, it is the fastest growing alternative fuel in America, and about 500 major fleets use biodiesel nationwide. Over 450 retail filling stations make various biodiesel blends available to the public, and more than 1,400 petroleum distributors carry it nationwide.