Legislation impacting biodiesel industry

By GENE LUCHT, For Lee Agri-Media
Thursday, May 25, 2006 11:55 AM CDT

Farm state lawmakers and leaders of the American Soybean Association (ASA) hope Congress will act this year on several pieces of legislation affecting the biodiesel industry.

“I think biodiesel has as much or greater potential (than ethanol),” says Rep. Collin Peterson, D-Minn. Peterson is the ranking minority member of the House Agriculture Committee. He joined ASA leaders at a teleconference recently where they pushed for three specific moves from Congress.

The first of those desired moves is the extension of the existing volumetric biodiesel tax incentive passed by Congress in 2004 but slated to end at the end of 2008 without further action by Congress.

The second is extension of the Commodity Credit Corporation (CCC) Bioenergy Program, started by the USDA in 2001 but slated to end this fall at the end of the fiscal year.

The third program is a small agri-diesel producer tax credit that was included in last year's federal energy bill but slated to expire in 2008.

“By taking these actions (extending or making permanent all three programs) we estimate on-road diesel supplies could be increased by 2 percent by 2015,” says Bob Metz, a South Dakota farmer and president of the ASA. “Each gallon of domestically produced biodiesel represents an expansion of distillate supplies, additional refinery capacity and is a direct replacement for imported refined diesel fuel.”

Peterson says he hopes Congress will extend the programs but is disappointed they weren't included in a large tax bill recently passed, almost entirely on party-line votes, that would extend several other large tax cuts that were passed in recent years.

“It's going to be a tough fight because we've got a big deficit,” Peterson says.

But, he says he expects Democrats and Republicans from Iowa, Minnesota and other Midwestern states to join together to push for the biodiesel program extensions.

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