A tax credit for biodiesel production expires at the end of this year and Senator Chuck Grassley doubts congress will address the issue in December.
“From my point of view, not necessarily to my satisfaction, it’s unlikely that congress will pass any sort of tax bill this year,” Grassley said this week.
However, early next year Republicans in congress are hoping to extend a package of tax cuts approved in 2017 and Grassley said it’s possible the biodiesel production tax credit could be inserted in that bill. “That’s not something I can promise,” Grassley said, “but it’s obviously something I would work for.”
Iowa is the largest U.S. producer of biodiesel. The state’s nine biodiesel plants produced about 350 million gallons of the soybean-based fuel last year. The biodiesel tax credit was established in 2005 and has been extended several times.
Grassley said the U.S. Treasury Department and Environmental Protection Agency rulings on the scope of other tax breaks for renewable fuels should have been made long ago.
“This administration hasn’t done enough to offer certainty for biodiesel producers,” Grassley said. “…Right now, it would be ideal if we could at least extend the blenders credit for biodiesel. That would help some. It would also help is we could pass the Ernst-Grassley-Klobuchar bill that would have E-15 year-round, nationwide as well.”
In February, the EPA approved the sale of a 15% ethanol blend at gas pumps in Iowa and seven other Midwest states year round, but the higher blend of ethanol still cannot be sold in other states during the summer months. The agency has long cited concerns that E-15 can cause smog during hotter weather.