Biodiesel Producers Hoping for Tax Credit Resurrection

The biodiesel industry suffered a setback when supporters in the U.S. Senate failed to attach an amendment to the recently-adopted Small Business Jobs Act that would have restored the industry’s tax credit.

Sen. Chuck Grassley (R-Iowa) proposed the amendment to restore the $1 a gallon tax credit that expired Dec. 31.

Since the expiration of the tax credit, which was designed to make biodiesel price competitive with regular diesel, almost 13,000 people in the industry have lost their jobs and 70% of the biodiesel plants have been idled, said Michael Frohlich, spokesman for the National Biodiesel Board.

Frohlich said another Senate bill on tax credit extensions sponsored by Montana Sen. Max Baucus (D) would restore the tax credit, if adopted.