From the NBB and DTN:
For several months, the RVO Working Group has held a series of discussions and conducted economic modeling to inform the recommendations the National Biodiesel Board provided to administration officials on the 2018 and 2019 RVOs. The numbers that this working group has identified keep in tune with NBB’s approach to RVOs; the numbers are realistic, attainable and justifiable. The NBB will recommend at least 5.25 billion gallons of advanced biofuels for 2018 and at least 2.75 billion gallons of biomass-based diesel for 2019.
Members and staff of the National Biodiesel Board have met with various administration officials in the U.S. Environmental Protection Agency, the U.S. Department of Agriculture and the White House. We look forward to continuing the conversation with these and other administration officials as they work on the RVO proposal. Timeliness of the proposal and the final standards has been a key theme throughout these discussions.
A big thank you to members of the RVO working group, as well as Alan Weber (MARC IV) and Dr. John Kruse (WAEES), for their tireless efforts on the modeling and for taking a deep dive looking at feedstock availability. The hard work of this group allowed us to make an informed, responsible proposal and a strong case to the administration.
Also this week, U.S. Senators Chuck Grassley (R-Iowa) and Maria Cantwell (D-Wash.) introduced a bipartisan biodiesel tax credit bill that would reinstate the biodiesel and small producers’ tax credits that expired at the end of 2016, but with a change to who is eligible for the credit. This legislation would provide $1-per-gallon tax credit to U.S. producers instead of blenders, which prevents subsidization of foreign manufacturers.
Without this reform, U.S. tax policy is creating competitive disparities in which U.S. companies are losing U.S. jobs and market share to subsidized foreign production. Updating this tax credit is necessary to create a level playing field for U.S. biodiesel producers and to ensure we keep biodiesel jobs here in the United States. NBB applauds the introduction of this bill, which has the support of at least 16 senators from all across the country.
Since 2014, biofuels imports have increased from 510 million gallons to about 1 billion gallons in 2016. Already in the first quarter, imports are 10% higher than they were at the same time in 2016.
The joint news release said that, in many cases, foreign biodiesel benefits both from the existing tax credit and from additional foreign subsidies, which make it difficult for domestic biofuel facilities to compete. In 2015, the U.S. Treasury spent more than $600 million on tax credits for imported biodiesel and renewable diesel.
The Senators said switching from a blenders credit to a producers credit would offer numerous additional benefits. The blender’s credit can be difficult to administer because the blending of the fuel can occur at many different stages of the fuel distribution. This can make it difficult to ensure that only fuel that qualifies for the credit claims the incentive, making the program susceptible to abuse.
“U.S. tax policy should support U.S. products and U.S. jobs,” said Grassley. “This bipartisan bill would end a system that gives many foreign producers a leg up over U.S. producers and give certainty to the biodiesel industry, which is responsible for employing thousands of Americans.”
Joining Grassley and Cantwell to cosponsor the measure are U.S. Sens. Pat Roberts, R-Kansas; Mazie Hirono, D-Hawaii; Roy Blunt, R-Mo.; Sheldon Whitehouse, D-R.I.; Joni Ernst, R-Iowa; Heidi Heitkamp, D-N.D.; John Thune, R-S.D.; Tom Udall, D-N.M.; Martin Heinrich, D-N.M.; Jeanne Shaheen, D-N.H.; Amy Klobuchar, D-Minn.; Al Franken, D-Minn.; Joe Donnelly, D-Ind.; and Patty Murray, R-Wash.
Modifying the credit is estimated to have little to no impact on the consumer. Much of the credit would continue to be passed on to the blender and ultimately, the consumer. Additionally, the U.S. biodiesel industry is currently operating at approximately 65% of capacity. The domestic biodiesel industry has the capacity and access to affordable feedstocks to meet the demand of U.S. consumers, the senators said.
“Well-crafted and efficient tax incentives can be powerful policy mechanisms to achieve the nation’s energy objectives and to create jobs,” said Anne Steckel, vice president of federal affairs at the National Biodiesel Board. “But subsidizing foreign manufacturing and hurting U.S. workers were not Congress’ intent. We applaud the senators’ bill to close this loophole by reforming the credit as a domestic production credit. Updating this tax credit is necessary to create a level playing field for U.S. biodiesel producers — and it has the added benefit of saving millions of taxpayer dollars.”
Being from North Carolina, I’m disappointed to see senators Burr and Tillis both missing from this bill as cosponsors. My pathetic state does almost nothing to support biodiesel, even though it has repeatedly supported ethanol production here in large fashion and failed every time.