US senators introduce bill to change, extend US biodiesel tax credit

15.07.2016

US senators introduced a bipartisan legislation in the US Senate to change the US biodiesel tax credit from a blender's credit to a producer's credit and to extend the new policy for three years on Wednesday, said an announcement on US Iowa Senator Chuck Grassley's official website.

The bill, if passed, would make the tax credit of $1/gal or $300/mt available only to domestic US biodiesel producers, rather than the current policy, which allows foreign biodiesel producers to avail themselves of the $1/gal blender's credit.

Biodiesel imports into the US from Argentina, Singapore, South Korea, the European Union and other regions are estimated to exceed 1.8 billion gallons during 2016 and 2017, according to the announcement, and these are currently subsidized by the blender's credit.

Since the US biodiesel industry is operating at 55% capacity, this change in legislation would support the US biodiesel industry and jobs and end subsidies for foreign biodiesel producers, it adds.

The change in legislation would mean an end to all foreign biodiesel imports into the US, said an Asian market source. A Singapore-based biodiesel producer would be greatly affected, he added.

The modification of the credit would have no impact on the US consumer, adds the announcement on Grassley's website, since the credit would now be passed to the US producer and eventually the consumer.

 


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