Biodiesel Gets A Dollar a Gallon Break and Wants More

In testimony before Congress, John Hoffman, first vice president of the American Soybean Association (, called for extension of the biodiesel tax incentive which has spurred growth in the US biodiesel industry and authorization of a Biodiesel Incentive Program under which US biodiesel producers would receive a commodity reimbursement from the Commodity Credit Corporation equal to subsidies paid to foreign biodiesel exporters.

He recalled that, “biodiesel provides a key new market for US soybean oil, which has historically been in surplus, resulting in lower soybean prices. Efforts to establish biodiesel as a viable renewable fuel received a major boost when Congress enacted the biodiesel tax incentive.”

For its part the National Biodiesel Board joined the ASA in seeking an additional federal subsidy of 43 cents per gallon in the 2007 farm bill. Some states are taking action, as well.

A bill signed by Governor Bill Richardson of New Mexico will require that diesel fuel sold in the state contain a 5% biodiesel blend by July 2012. Diesel purchased by state and local governments and public schools must meet the 5% blend standard by July 2010.

Oregon is moving to enact a statewide renewable fuel standard. A bill that passed the state’s House and is moving into the Senate would establish a production tax credit for Oregon growers to produce locally grown biofuel feedstocks such as canola, camelina, wheat, and flax and would provide incentives for in-state processing of biofuels.

A California Executive Order that establishes a target for the state to produce and use a minimum of 20% of its biofuels within California by 2010, 40% by 2020, and 75% by 2050. Biofuels includes both ethanol and biodiesel.

The Kansas Qualified Biodiesel Fuel Producer Incentive Fund (KQBPIF) provides qualified biodiesel producers a 30 cents a gallon production incentive for each gallon of biodiesel it sells. The program will expire on July 1, 2016.

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