Representative Cindy Axne (IA-03) and Representative Mike Kelly (PA-16) introduced bipartisan legislation in the U.S. House of Representatives to extend the biodiesel tax credit for three years. Companion legislation has been introduced in the U.S. Senate by Senator Chuck Grassley (R-IA) and Maria Cantwell (D-WA).
The tax credit, which is set to expire at the end of 2022 after being revived in December 2019, supports a homegrown clean energy sector that employs thousands of Americans while lowering emissions.
MEMA is appreciative of Maine’s Congressional delegation for their support for renewable fuel use and development in Maine, including ethyl levulinate. This federal tax incentive promotes commercial adoption of these fuels and helps reduce greenhouse gas emissions throughout the heating oil sector. MEMA has reached out to Maine’s Congressional delegation to indicate the cruciality of extending the biodiesel tax credit to further encourage economic growth, enhance energy security, encourages innovation that is better for our environment and provides certainty to the growing biofuels industry.
The biodiesel industry has grown rapidly with the help of the biodiesel tax credit in the past. From 2013 to 2016, when the tax credit was in place for the entire three-year period, U.S. production grew by 400 million gallons. And in 2020, despite COVID-19, production still grew more than 150 million gallons with the help of the newly revived credit.
From 2015 to 2018, it is estimated that use of biodiesel and other renewable diesels helped reduce U.S. carbon emissions by 9.3 million tons. Biodiesel production also provides secondary market uses for used cooking oils and recycled animal fats, which would otherwise be added to landfills.
The U.S. biodiesel and renewable diesel industry supports 65,000 U.S. jobs and more than $17 billion in economic activity each year. Every 100 million gallons of production supports 3,200 jobs and $780 million in economic opportunity. Biodiesel production supports approximately 13 percent of the value of each U.S. bushel of soybeans.