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Biodiesel Tax Incentive Gets Extended To 2008 FOR IMMEDIATE RELEASE: June 29, 2005 JEFFERSON CITY, Mo. - Today soybean farmers and the Missouri Soybean Association (MSA) cheered passage of the Energy Bill by Congress, as a crucial step forward in establishing biodiesel as a long-term component of the nation’s energy supply. The bill passed with several provisions to promote biodiesel’s growth, including the extension of a federal excise tax credit —the industry’s No. 1 priority. The tax incentive, established originally as part of the American JOBS Creation Act of 2004, would have expired in 2006. It will now be extended through 2008. U.S. Senators Jim Talent (R-MO) and Blanche Lincoln (D-AR) were the chief sponsors of the extension. “Passage of the Energy Bill is a real victory for renewable fuels and family farmers throughout the Midwest and the United States,” said Senator Jim Talent, who also helped negotiate the 7.5 billion gallon Renewable Fuels Standard and created the small producer tax credit for biodiesel, both of which were included in the Energy Bill. “Renewable fuels are at the heart of economic growth and jobs for the future; at the heart of energy independence from foreign energy producers; at the heart of environmental quality; and at the heart of value-added agriculture for our family farmers and producers. I congratulate everyone who worked so hard for this day.” The excise tax credit amounts to a penny per percentage point of biodiesel blended with petroleum diesel for “agri-biodiesel,” made from soybean oil, and a half-penny per percentage for biodiesel made from other sources. The credit is taken at the blender lever with the intended effect of lowering the cost of biodiesel to consumers in taxable and tax exempt markets. Rep. Kenny Hulshof (R-MO) led the charge for the extension on the House side. “We need to focus on domestic, renewable sources of energy to supply our increasing demand and this bill goes a long way in accomplishing that goal,” Hulshof said. “This agreement signals the culmination of months of tireless negotiations, but the final product is a good one for farmers, consumers and the environment. This truly is a monumental step for renewable fuels.” “We appreciate the hard work and dedication of our congressional champions. With extension of the biodiesel tax incentive, the biodiesel industry in Missouri and nationwide is poised for mass expansion. Missouri farmers are more than prepared to meet the increased demand for soybean oil. This day has been long awaited,” said Dale R. Ludwig, executive director/CEO of MSA. Biodiesel can be used in any diesel engine in pure form, or blended
with petroleum diesel. It significantly reduces most regulated emissions
and is nontoxic and biodegradable. Biodiesel has the highest energy balance
of any transportation fuel. The U.S. Department of Energy (DOE) and the
U.S. Department of Agriculture (USDA) in 1998 performed the prevailing
life cycle study of the energy balance of biodiesel. It found that for
every one unit of fossil energy used in the entire biodiesel production
cycle, 3.2 units of energy are gained when the fuel is burned, or a positive
energy balance of 320 percent. ###
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© Missouri Soybean Programs |