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MnSP still waiting for biodiesel tax credit

WORTHINGTON -- Biodiesel production at Minnesota Soybean Processors near Brewster has been cut back significantly in the last several months as a result of the federal government's failure to reinstate the biodiesel tax credit.

The $1 per gallon credit, which Congress allowed to expire on Dec. 31, has helped the biodiesel industry to construct more than 150 renewable fuel refineries in 44 states and led to the creation of 23,000 jobs, according to Joe Jobe, CEO of the National Biodiesel Board.

The biodiesel tax credit bill has passed both the House and Senate as part of a broader tax extenders package, but the two versions have yet to be combined.

"Without the tax credit, basically the people that we sell to -- it doesn't make it affordable at this point in time to purchase (biodiesel)," said Kim Collin, an MnSP spokesperson. "While we're maintaining customers, they're not buying increased volume -- they're all just kind of holding off, not shipping and not blending as much."

Without those added sales, Collin said production at the local soy biodiesel plant has "been cut back tremendously." It isn't just production, but load-out as well, that has taken a hit.

"We haven't cut back positions or laid off or anything at this point in time," said Collin. "There's just not the overtime there was."

Collin said Monday that MnSP continues to encourage its shareholders and customers to contact their House and Senate representation to encourage reinstatement of the credit.

The National Biodiesel Board and American Soybean Association are conveying the same message to soybean producers across the country.

"Further inaction by Congress to complete this common sense policy is causing the loss of jobs every day, derailing America's investment in its first successful advanced biofuel and it's simply unacceptable," said Jobe.

The biodiesel industry has contributed billions of dollars of net tax revenue and displaced billions of gallons of petroleum, Jobe said in a release issued during the Alternative Fuels and Vehicles Institute national conference last week in Las Vegas.

The hope is that if the tax credit is reinstated it will be made retroactive to Jan. 1, but the longer it takes Congress to act, the more wary biodiesel customers are.

"They're doing their bare minimum ... for their needs, knowing they may not get that retroactive credit to the first of the year," said Collin. "We're still very hopeful for the end of May here, but that's closing in on us pretty fast."

The holdup in Congress regarding the tax credit comes down to money, said Collin. If the federal government reinstates the legislation, it has to be able to fund it.

"We're just sitting back and waiting," said Collin, adding that the RF S2 standards are supposed to take effect July 1.

"With that mandate going in, requiring a lot larger percentage being used of renewable or advanced biofuels ... the need for (the credit) is going to increase," she said.

The RF S2 standard, set by the Environmental Protection Agency, calls for an increase in renewable fuels production from 10 million gallons to 36 million gallons annually by 2022. The standard will increase the amount of renewable fuel required to be blended into transportation fuel sold in the U.S., in hopes of reducing greenhouse gas emissions.

Julie Buntjer
Julie Buntjer joined the Daily Globe newsroom in December 2003, after working more than nine years for weekly newspapers. A native of Worthington and graduate of Worthington High School, then-Worthington Community College and South Dakota State University, she has a bachelor's degree in agriculture journalism. At the Daily Globe, Julie covers the agricultural beat, as well as Nobles County government, watersheds, community news and feature stories. In her spare time, she enjoys needlework (cross-stitch and hardanger embroidery), reading, travel, fishing and spending time with family. Find more of her stories of farm life, family and various other tidbits at www.farmbleat.areavoices.com.
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