Grassley: Biodiesel on front burner in D.C.

BiodieselBy Chuck Grassley
United States Senator


Biodiesel is an Iowa success story.  We are the leading biodiesel state.  Now there’s more good news for biodiesel workers and consumers who want a clean, domestic fuel for their tractors, trucks and cars with diesel engines.

A key committee approved my bipartisan proposal to modify the tax credit that’s helped biodiesel develop as an increasingly popular fuel.

Since 2005, the biodiesel tax provision has been a mixture credit available to the blender of the fuel.

My proposal converts the tax credit from a blenders credit to a domestic production credit for the period extended, through 2016.  It does, however, provide for a blenders credit for retailers who have shown a commitment to biofuels and have blended large amounts in the previous year.  These fuel marketers made a large investment in blending infrastructure to provide biodiesel blends and shouldn’t be penalized for that.

Converting to a producer credit improves the incentive in many ways.  The blenders credit can be difficult to administer, because the blending of the fuel can occur at many different stages of the fuel distribution.

This can make it difficult to ensure that only fuel that qualifies for the credit claims the incentive.  It has been susceptible to abuse because of this.

A credit for domestic production also would ensure that our tax policy incentivizes a domestic industry instead of subsidizing imported biofuels.

It’s projected that imports from Argentina, Singapore, the European Union and South Korea could exceed one billion gallons in 2016 and 2017.

The United States should not provide a U.S. taxpayer benefit to imported biofuels.  By restricting the credit to domestic production, we would save taxpayer money and reduce the cost of the extension by $90 million.

Iowans and the country as a whole would continue to receive the benefit of clean biodiesel produced in Sergeant Bluff, Algona, Iowa Falls, Clinton, Washington, Newton, Ralston, Mason City, Milford, Crawfordsville, Keokuk, Farley and Wall Lake.

Domestic biodiesel production supports tens of thousands of jobs, including an estimated 7,100 jobs in Iowa.   Replacing traditional diesel with biodiesel reduces emissions and creates cleaner air.

Homegrown biodiesel improves our energy security by diversifying our transportation fuels and reducing our dependence on foreign oil.

Biodiesel itself is a very diverse fuel.  It can be produced from a wide array of resources such as recycled cooking oil, soybean and other plant oils, and animal fats.

There are dozens of reasons to support biodiesel production.  I’ll continue to fight for recognition for this advanced biofuel in Washington, and I look forward to offering more good news on biodiesel.