NBB and ASA Praise Senate for Approval of Transportation Bill that Includes Biodiesel Tax Incentive

NBB and ASA Praise Senate for Approval of
Transportation Bill that Includes Biodiesel Tax Incentive
Move provides another window of opportunity for passage of landmark incentive

February 13, 2004... The American Soybean Association (ASA) and the National Biodiesel Board (NBB) applauded the Senate for overwhelmingly passing a transportation bill that contains an important biodiesel tax incentive. The Senate voted 76-21 on Thursday, February 12, to approve a new six-year highway spending bill that provides for road improvements across the nation. The Senate-passed transportation bill contains a biodiesel tax incentive that is virtually identical to the one that was in the Senate Energy bill.

“We applaud the Senate, particularly leaders like U.S. Senators Chuck Grassley and Blanche Lambert Lincoln, for their leadership and recognition that the biodiesel tax incentive is important to America’s energy security, economy and the environment,” said ASA President Ron Heck of Iowa. “The biodiesel tax incentive is soybean growers’ top legislative priority. We want it to become law whether it’s approved as part of the Transportation Bill, Energy Bill or other legislation.”

“The biodiesel industry and soybean growers are excited to see this major step that provides an additional legislative vehicle for passage of the biodiesel tax incentive,” said NBB Chairman and ASA Vice President Bob Metz, a South Dakota soybean farmer. “All biodiesel supporters should call their Members of Congress and urge them to continue down this path that will lead to greater reliance on renewable fuels, like biodiesel and ethanol.”

“The passage of this bill is great news for farmers in Iowa,” Sen. Grassley said. “The inclusion of my Volumetric Ethanol Excise Tax Credit language in the financing portion of the bill will provide real help to soybean producers. As Chairman of the Senate Finance Committee, I did everything I could to ensure the bill included help for domestic fuels, like biodiesel, that will allow us to wean ourselves off foreign sources of oil. As a member of the conference committee that will reconcile the differences between the House and Senate, I'll continue working to make sure that farmers have a seat at the table.”

“Biodiesel is one of the most promising renewable fuels in our nation's energy portfolio, and by creating incentives to encourage its production and use, we'll go a long way toward relieving our dependence on foreign oil imports,” Senator Lincoln said. “That's why I'm delighted that the biodiesel provisions Senator Grassley and I have championed are included in the transportation bill. I'll fight to ensure that these provisions are included in the final bill, for the sake of our energy policy, American consumers, and agricultural producers.”

On February 11, 2004, the House of Representatives opted to approve a four-month extension to the current transportation bill. This will allow the highway debate to continue over the next few months. Once the House passes its own transportation bill, it will move to Conference Committee where a final version of the bill will be negotiated.

Senator Kit Bond (R-MO) is chairman of the Transportation and Infrastructure EPW Subcommittee that co-authored the federal highway bill and has provided strong leadership in moving the biodiesel tax incentive forward through both the transportation and energy bills.

“I will fight to keep the biodiesel tax credits intact when the bill goes to Conference,” said Bond. “Increased biodiesel use is not only good for Missouri's rural economy, it is also good for our environment, and most importantly, national security by decreasing our dependence on foreign oil.”

The Senate is also looking at a scaled-down version of an Energy Bill that might gain passage after the legislation stalled late last year over issues unrelated to biodiesel.

A cleaner-burning alternative to petroleum diesel, biodiesel is made from soybeans and other natural fats and oils that are produced in the United States. Securing passage of a biodiesel tax incentive is the top legislative priority of the ASA and NBB, and Congress has pursued this goal for the last four years. Due in large part to the bipartisan efforts of U.S. Senator Grassley (R-IA), Senator Lincoln (D-AR) and others, a biodiesel tax incentive was included in the final Energy Bill. It amounts to one penny per percentage point of biodiesel blended with petroleum diesel. The tax incentive will be available to diesel excise taxpayers and other fuel distributors who purchase biodiesel and blend it into diesel fuel. The incentives are intended to reduce the cost of biodiesel to the end consumer in both taxable and tax exempt markets.

Biodiesel works in any diesel engine with few or no modifications. It can be used in its pure form (B100), or blended with petroleum diesel at any level—most commonly 20 percent (B20). More than 400 major fleets use biodiesel commercially nationwide. More than 200 retail filling stations also make biodiesel available to the public, and hundreds of petroleum distributors carry it nationwide.

A U.S. Department of Energy and U.S. Department of Agriculture full lifecycle emissions study found that for every unit of fossil energy needed to make biodiesel, 3.2 units of energy are gained. In contrast, it takes 1.2 units of fossil resources to produce 1 unit of petroleum diesel. Biodiesel reduces emissions, and it is nontoxic, biodegradable and essentially free of sulfur and aromatics. Biodiesel offers similar fuel economy, horsepower and torque to petroleum diesel while providing superior lubricity. It significantly reduces emissions of carbon monoxide, particulate matter, unburned hydrocarbons and sulfates. On a lifecycle basis, biodiesel reduces carbon dioxide by 78 percent compared to petroleum diesel.

# # #

For more information contact:

Neil Caskey, ASA/St. Louis at 800-688-7692
Jenna Higgins, NBB at 573-635-3893