Legislation has now been introduced in both the House and the Senate to extend the $1 gallon biodiesel tax credit through 2014. This three-year extension legislation was introduced by Democrat Collin Peterson of Minnesota and Republican Aaron Schock of Illinois in the House and in the Senate by Republican Chuck Grassley of Iowa and Democrat Maria Cantwell of Washington.
The biodiesel tax credit was allowed to expire at the end of 2009 and greatly contributed to a 42 percent drop in production. It was reinstated in December of 2010, retroactive to 2009 with expiration at the end of 2011. The proposed three-year extension would also change the $1 per gallon blender’s tax credit to a production tax credit. This would move the advantage from the diesel/biodiesel blender (in most cases major petroleum corporations) to the actual producers of biodiesel.
The U.S. biodiesel industry supports more than 31,000 jobs and will replace nearly a billion gallons of imported petroleum diesel this year.