Bipartisan Legislation Introduced to Extend, Phaseout Biodiesel Tax Credit

Representatives Diane Black (R-Tenn) and Ron Kind (D-Wisc.) late yesterday introduced bipartisan legislation titled the Biodiesel, Renewable Diesel, and Alternative Fuels Extension Act of 2017 (H.R. 3264) that would extend the biodiesel blenders’ tax credit and ultimately phase it out over five years.

Since 2005, the $1 per gallon biodiesel blenders’ tax credit has helped fuel retailers sell biodiesel at a price that is cost-competitive with diesel, thereby incentivizing consumer consumption. In the past, however, the federal biodiesel tax credit has been allowed to expire (as it did at the end of 2016) forcing market participants to wait for it to be retroactively renewed at the end of each year.

H.R. 3264 provides a viable off-ramp for the tax credit, ultimately facilitating free market economics to drive biodiesel supply and demand. Under the phaseout proposed by Representatives Black and Kind, the tax credit amount for all biodiesel blenders would be $1.00 per gallon in 2017 and 2018, $0.75 per gallon in 2019, $0.50 per gallon in 2020 and 2021, and zero in 2022 and later.

Under the proposed measure, the tax credit also will remain at the blender level, a decision NATSO strongly supports. There has been a coordinated effort by a group of lawmakers representing states where biodiesel is produced and where its feedstock is grown to convert the biodiesel blenders’ tax credit to a producers’ credit. This would increase prices for consumers and therefore constrict biodiesel consumption, ultimately impeding U.S. efforts to advance the utilization of cleaner burning fuels.

NATSO along with the Advanced Biofuels Association, National Association of Convenience Stores (NACS), Society of Independent Gasoline Marketers of America (SIGMA), Petroleum Marketers Association of America (PMAA) and the American Trucking Associations (ATA), commended Representatives Black and Kind for introducing this bipartisan legislation.

“We applaud Representatives Black and Kind for introducing a measure that will enable consumers to have access to cleaner-burning fuel at the lowest possible cost,” said NATSO President and CEO Lisa Mullings. “The five-year phaseout contained in this legislation—which mirrors policy that has been enacted for other alternative energy sources such as wind and solar—is designed to provide much-needed policy certainty to the market. The phaseout is also compatible with congressional efforts to reform and simplify the tax code.”

“ATA applauds Representatives Black and Kind for introducing this legislation, which would result in lower fuel costs for truckers throughout the country,” said ATA Vice President Glen Kedzie.

Brad Puryear, General Counsel of Mansfield Energy and Chairman of SIGMA’s Legislative Committee, said, “We support this bipartisan legislation introduced by Representatives Black and Kind that would extend and phase out the biodiesel blenders’ tax credit. The blenders’ credit encourages fuel marketers to expand usage of biodiesel, which contributes to American energy independence, promotes cleaner energy and supports the mission of the Renewable Fuel Standard. The blenders’ credit also results in a more competitive price of diesel fuel at the pump for all consumers. The phase out is fiscally prudent and provides business with clear direction and time to adapt to changes.”

Michael McAdams, president of the Advanced Biofuels Association, said ABA’s “membership is grateful and will work vigorously to support the bipartisan legislation introduced by Congresswoman Diane Black and Ron Kind. This legislation is crucial to the continued success for all biodiesel sold and used in the United States. The continuation of the existing tax credit is the only way that money finds its way back to the pockets of those buying the fuel through lower cost.”

Rob Underwood, President of PMAA, said, "The legislation introduced by Representatives Black and Kind will enable PMAA's members to charge customers less money for heating oil and motor fuel. We applaud Representatives Black and Kind for introducing this important legislation."

Tiffany Wlazlowski Neuman's photo

Tiffany Wlazlowski Neuman

Tiffany Wlazlowski Neuman develops and executes communications strategies to advance NATSO’s public relations and advocacy goals. Tiffany also develops and oversees partnerships related to the NATSO Foundation’s public outreach initiatives. Tiffany lives in the D.C. metro area with her husband and their two sons.More
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