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Bill Extending Biodiesel Credit

Senate Rejects Bill Extending Biodiesel Credit

The Senate has voted down the bill to extend the biodiesel credit.
The longer the industry goes without the tax break, the greater the impact, National Biodiesel Board CEO Joe Jobe told OPIS.
“What’s happened is that even though the tax credit has been extraordinarily successful in stimulating investment and innovation — with 150 plants built in the last five years since the inception of the tax credit – the Congress’ inaction is just allowing all of that investment and innovation to suffocate,” he said.
The next hope for the biodiesel industry to extend the credit is Congress’ energy bill, which it should take up next month, OPIS said.
Updated 6/28/10

House Approves Bill Extending Biodiesel Credit

The U.S. House of Representatives passed the American Workers, State and Business Relief Act, (H.R. 4213), which would reinstate the $1 per gallon biodiesel tax credit through the end of 2010, among other tax extenders.

The credit, which expired Dec. 31, 2009, was made retroactive in the bill, so any biodiesel blended in 2010 would be eligible for the credit.
According to the American Trucking Associations, this issue is especially important to the trucking industry in light of the federal renewable fuel standard, which requires the use of 1 billion gallons of biodiesel this year.
The Senate is expected to take up the measure the week of June 7. Both the House and the Senate are on Memorial Day Recess this week. However, provisions in the legislation not related to the biodiesel tax credit, including concerns over the cost of the bill and its impact to the deficit, remain an obstacle to Senate’s passage of the bill, according to ATA.
The National Biodiesel Board praised the House action. “Since the tax incentive’s inception six years ago, the biodiesel industry has created tens of thousands of green jobs, added $4.1 billion to the nation’s GDP and generated $828 million in tax revenue for federal, state and local governments,” said Manning Feraci, vice president of federal affairs. “However, since the incentive has lapsed the industry has shed thousands of jobs, shuttered plants and is struggling to survive.
Biodiesel Fuel Credit
If you sell or use biodiesel (not in a mixture) as a fuel, you may be eligible for a general business credit on your income tax return.
Certificate of Biodiesel: You must obtain and keep as part of your records a certification to you from the producer or importer of the biodiesel. The certificate is required for any biodiesel fuel credit claimed. The certificate must identify the product produced and the percentage of biodiesel and agri-biodiesel in the product. If the producer or importer of the biodiesel is also the taxpayer claiming the biodiesel credit, the certificate is required but lines 2–7 are not applicable.
The following changes apply to the biodiesel and renewable diesel fuels credit.

  1. For fuel produced after 2008, biodiesel and renewable diesel do not include any liquid eligible for the alcohol and cellulosic biofuel fuels credit.
  2. For fuel produced, and sold or used, after 2008:
    • The credit rate for the biodiesel and biodiesel mixture credits increased to $1.00 per gallon.
    • Camelina is added to the list of virgin oils from which agri-biodiesel is derived.
    • The definition of renewable diesel changed.
  3. Biodiesel produced, sold, or used after September 30, 2009, must meet the new ASTM D6751 cold soak filtration test (Original deadline: April 1, 2009)

The biodiesel and renewable diesel fuels credit has expired for fuel sold or used after
Updated 6/28/10

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Tax, Accounting, Consulting - Emil Estafanous, CPA, CFF, CGMA