Biodiesel Blending Tax Credit Gets Green Light in U.S. Senate

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Researched by Industrial Info Resources (Sugar Land, Texas)--This week, by a margin of 83-15, the U.S. Senate invoked cloture (effectively ending debate) on the biodiesel blending tax credit, which was included in a package of other tax breaks. The package is expected to clear final passage by the Senate. The blending tax credit will be retroactively extended through 2011.

While this does revive hope for the embattled biodiesel industry, as 97 biodiesel production plants in the U.S. have been shuttered, the package still has to be cleared by the U.S. House of Representatives before it is sent to the President for his approval or veto.

The federal blending tax credit was an incentive that allowed the biodiesel production to be offset to make biodiesel more competitive with petroleum-based diesel. Under the blending tax credit, qualified biodiesel producers or blenders were eligible for an income tax credit of $1 per gallon of pure biodiesel (B100) or renewables produced or used in the blending process.

The original $1 blending tax credit was passed in 2004. It was twice extended, and then expired on December 31, 2009. In September of this year, the U.S. Senate voted down a proposal to reinstate the credit on biodiesel production. The final vote was 58 to 41 in favor of the credit, but Senate rules require 67 votes for passage.

Industrial Info's Databases provide a comprehensive outline of all current development activities in the emerging alternative fuels market. Our North American Biodiesel Database covers 157 operational plants and 81 plants under development. Our North American Ethanol Database covers 208 plants currently in operation and 144 plants under various development phases. Our North American Wood Fuel Pellet Database includes 64 operational plants producing greater than 25,000 tons annually, and 41 projects under progress.

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