Truck stop trade group NATSO and other industry partners today, April 12, urged Congressional leaders to reinstate the biodiesel tax credit with an effective date of Jan. 1, 2010, to ensure a healthy biodiesel market for producers and consumers.
In a letter addressed to Senators Max Baucus (D-Mont.) and Charles Grassley (R-Iowa) and Representatives Sander Levin (D-Mich.) and Dave Camp (R-Mich.), NATSO urged lawmakers to quickly convene a conference on the American Worker, State and Business Relief Act of 2010 and to reinstate the tax credit that expired Dec. 31.
The National Association of Convenience Stores, the Petroleum Marketers Association of America and the Society of Independent Gasoline Marketers of America joined NATSO in signing the letter.
“Fuel retailers want to continue making investments in biodiesel infrastructure and want to continue selling biodiesel to customers,” said NATSO President and CEO Lisa Mullings. “But without this tax credit, they can’t do that. Congress imposed biodiesel production mandates to stimulate renewable fuel development. Without an extension of the tax credit, the production mandate is meaningless and consumer demand for the product erodes.”
Since the biodiesel tax credit expired, U.S. biodiesel production has plummeted by more than 80 percent, according to NATSO. At the same time, motorists are changing buying habits as the price of biodiesel surpasses other fuels. The $1 per gallon blender tax credit makes biodiesel cost competitive with conventional diesel fuel. The expiration of the tax credit, coupled with sagging consumer demand, has caused many producers to shut down or severely scale back production, NATSO said.
Furthermore, failure to reinstate the tax credit could force fuel blenders and producers to lay off employees or push them into failure, NATSO said. When the tax credit expired, many fuel blenders and producers continued to pass the $1 per gallon credit on to customers based on an assurance that the credit would not lapse and would cover all of 2010, according to NATSO.
Extending the tax credit will increase biodiesel production while spurring retail investment in the infrastructure necessary to supply biodiesel to commercial carriers and the motoring public, NATSO said.
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