Biodiesel Included in Energy Bill Passed by House

as reported by The National Biodiesel Board:

On Thursday, December 6, 2007, the U.S. House of Representatives passed H.R. 6, the Energy Independence and Security Act of 2007, by a 235 to 181 margin. The National Biodiesel Board (NBB) strongly supported passage of this comprehensive energy bill. Read NBB CEO Joe Jobe's letter to the Speaker of the U.S. House of Representatives Nancy Pelosi on this legislation.

Renewable Fuels Standard (RFS):
The creation of a specific renewable requirement in the nation's 60 billion gallon pool of diesel fuel has been a priority for the U.S. biodiesel industry. H.R. 6 as approved by the House establishes this renewable requirement that will increase the domestic use of "biomass-based diesel" – including biodiesel – from 500 million gallons in 2009 to 1 billion gallons in 2012. View a summary of the expanded RFS proposal included in H.R. 6.

Biodiesel Tax Incentives:
The House-passed energy bill addresses the U.S. biodiesel industry’s tax priorities.Extension of Biodiesel Tax Incentive:Under current law, the biodiesel tax incentive, including the income tax credit and the excise tax credit, expires on December 31, 2008. Given the important role the credit plays in helping biodiesel compete in the marketplace with conventional diesel fuel, extension of the biodiesel tax incentive is a top NBB priority. H.R. 6 extends the credit through December 31, 2010.

Renewable Diesel and Co-Processed Renewable Diesel:
Co-processed renewable diesel – renewable diesel that is produced when an oil company adds small amounts of vegetable oils or animal fats to the traditional petroleum refining process when producing diesel fuel, qualifies under current law for the $1 per gallon renewable diesel tax credit. Under the House energy bill, the co-processed renewable diesel would no longer qualify for the $1 renewable diesel tax credit. Diverting scarce resources to subsidize the existing operations of oil refineries at the expense of free-standing biodiesel and biomass-based diesel production facilities that are adding new fuel and new refining capacity to the nation’s energy supply is not sound energy or tax policy. The provision in H.R. 6 that properly defines renewable diesel as excluding co-processed renewable diesel is consistent with H.R. 2361, NBB-endorsed legislation introduced by Representative Lloyd Doggett (D-TX).

Tax Incentives for Exported Fuel:
Under H.R. 6, U.S. produced biodiesel that is exported would continue to qualify for the biodiesel tax incentive, as would biodiesel imported into the U.S. for consumption.However, fuel that is produced outside the U.S. for use as fuel outside the U.S. would not qualify for the biodiesel tax incentive. This provision, which would be retroactive to enactment of the biodiesel tax incentive in October of 2004, would effectively deny the biodiesel tax incentive for so-called "splash and dash" transactions where foreign produced biodiesel is transshipped through the U.S. for the sole purpose of claiming the U.S. biodiesel tax incentive.

Outlook:
The House-approved energy bill will now be sent to the Senate, where the legislation's ultimate fate is uncertain. In addition, the Bush Administration has issued a Statement of Administration Policy (SAP) that threatens a Presidential veto of H.R. 6 as approved by the House. Read the Administration’s SAP on H.R. 6.