Biodiesel representatives urge Congress to extend tax incentive

Representatives of the US biodiesel industry urged Congress at a Senate hearing to pass a seamless extension of the biodiesel tax incentive to avoid putting thousands of jobs at risk.

“Like the rest of the industry, RBF has seen a tremendous increase in demand for its product during 2011. We are running our facility harder than ever,” said Paul Soanes, president and chief executive officer of Texas-based Renewable Biofuels Inc (RBF), in testimony before the Senate Finance Committee at a hearing on renewable energy incentives. “But stable, long-term federal incentives are necessary for this industry to continue to grow.”

Soanes emphasized the turnaround his company has seen with the reinstatement of the tax incentive after it was allowed to expire in 2010. RBF has increased production at its plant in Port Neches TX from 9 million gallons in 2010 to more than 62 million gallons this year, hiring new employees and investing in capital improvements.

Similar stories are taking place across the country as the biodiesel industry recovers from 2010’s slump, when production plummeted, dozens of plants closed, and thousands of people lost jobs after the tax incentive lapsed. With the incentive’s reinstatement in 2011, the industry has set a new production record of more than 802 million gallons through October. That is more than double 2010’s volume of about 315 million gallons.

The increased production will support more than 31,000 jobs this year while generating at least $3 billion in GDP and $628 million in federal, state, and local tax revenues, according to a recent economic study conducted by Cardno ENTRIX, an international economics consulting firm.

“Our industry’s numbers speak for themselves. We’re on track to nearly triple our production from last year, and that translates directly into jobs and productivity,” said Anne Steckel, vice-president of federal affairs at the National Biodiesel Board (NBB). “This tax incentive is a job creator, and Congress will be putting jobs in jeopardy if it adjourns without passing an extension.”

The $1-per-gallon biodiesel tax credit is slated to expire December 31, 2011. Bipartisan legislation has been introduced in the House and Senate to extend it for three years. The recent hearing on alternative energy tax incentives was held by the Senate Finance Committee’s Subcommittee on Energy, Natural Resources, and Infrastructure.

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