S.944-“The American Renewable Fuel and Job Creation Act of 2017” and Why You Should Care

So what’s the big deal about the latest version of the biodiesel tax credit bill submitted by Senators Grassley and Cantwell last week?

The bill is available in full text for your review here, but here are some highlights that make it important for domestic producers here in the USA:

Biodiesel in a bottle

  1. Producer’s Credit – The credit has been changed from a blender’s credit to a producer’s credit, meaning the actual entity making the biodiesel is the one eligible for claiming the credit.  This is important because currently most biodiesel producers are pressured to split the tax credit with blenders as B100 since the tax savings are actually worth more than the $1.00 credit.   It still will likely mean that feedstock prices go up for biodiesel producers, and there still may be pressure on the sell side for indexing biodiesel at a discount to heating oil, but the credit would be solely for the producer.  The bill does not indicate if the credits would be transferable.
  2. Multi-Year Credit – The extension would be from December 31, 2016 (retroactive) to December 31, 2020.  This would be the longest extension of the biodiesel tax credit on record, and would finally offer some stability to the biodiesel market.  This is a big deal.
  3. Domestic Production – A critical component of this bill is that it limits the credit to domestically produced biodiesel only.  Imported biodiesel from other countries would not be eligible for the tax credit.  This is a huge win for domestic biodiesel as it places them on a fair footing with imported biodiesel, and it means that US taxpayers are no longer subsidizing foreign produced biodiesel.
  4. Small Producer Credit – Small biodiesel plants under 15 million gallons per year are able to claim an extra .10 per gallon credit.
  5. Agri-biodiesel Definition Removed –  This changes indicates that the small producer credit is available for all feedstocks used in producing biodiesel.

In short, this is a big win for biodiesel if it’s passed as currently written.  Biodiesel NEEDS this tax credit bill to pass in order to gain some stability in the marketplace.  We have suffered too long under wishy washy tax policies and RFS programs that did nothing but destabilize the footing for biodiesel as a domestic alternative diesel fuel.

Want to help?  Call your senators today and tell them to support Senate Bill 944.  Ask for the “Energy Desk” and tell them “you want them to support S.944 for the biodiesel tax credit”.  Seriously, that’s it.  No long speeches or explanations needed, you don’t even have to tell them why.  Just call (email is not as good) and tell them you want them to support S.944.



Posted in Biodiesel, Tax Issues.