Congress is making progress on the biodiesel tax incentive, with passage by the Senate of the labor bill that's been pending. The American Workers, State and Business Relief Act of 2010 passed by a 62 to 36-vote margin. Included in the bill is a one-year retroactive extension of the biodiesel tax incentive.
The National Biodiesel Board, an advocate for the measure, says the next step is to get the House and Senate versions of this jobs bill reconciled and get the final version approved. NBB notes that the biodiesel tax has played a key role in allowing the U.S. to develop a commercial scale fuel specification and it's use to displace petroleum in diesel fuel tanks. The tax incentive is designed to make the biodiesel price more competitive with conventional diesel fuel and is structured to provide the incentive immediately. Since the lapse of that tax credit, the U.S. biodiesel industry has seen a big drop in demand and production.
NBB estimates the loss of the tax credit could impact the more than 23,000 people employed in the biodiesel industry. With passage of the Senate bill, the two versions will go to conference committee to be reconciled. Both bills do have a retroactive tax credit included. The one-year measure is a start toward a longer-term approach on the matter.
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