VANCOUVER – The reeling U.S. biodiesel industry is trying to avoid a knockout punch by lobbying Congress to take action on two key programs.
This year has been a miserable one for the country’s dwindling fleet of biodiesel plants, mainly because of a delay in implementing the new renewable fuel standard, a lack of operating capital and the collapse in diesel prices.
“We had a very significant downturn and contraction in the U.S. (biodiesel) industry,” Joe Jobe, chief executive officer of the U.S. National Biodiesel Board, told the recent Canadian Renewable Fuels Summit in Vancouver.
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He said further carnage is inevitable if the federal $1 US per gallon blender’s tax credit isn’t extended immediately. The credit is to expire at the end of the year.
The National Biodiesel Board has lobbied U.S. Congress for an extension, he added, but politicians are too preoccupied with the health-care debate to give the issue much attention.
Jobe said the biodiesel industry is not alone. Seventy-three other tax credit provisions in the 2008 economic rescue package are also set to expire.
He said he gets the sense Congress won’t deal with them until spring, at which time it will make the tax credits retroactive to Jan. 1.
“That does not help the biodiesel industry,” he said.
“The biodiesel industry comes to a screeching, screaming, crying, kicking halt on Jan. 1.”
He said 2009 was “extraordinarily tough” for his members, who can’t afford to wait for a retroactive credit.
“To completely shut them down for two or three months would be a knockout blow for many of them.”
He said he believes an extension is coming, but it will probably be another one-year deal, which makes it difficult for plants to obtain the financing they need to keep afloat.
The industry is pushing Congress for a five-year producer’s tax credit, which would provide much-needed stability.
Jobe said the industry also needs workable Renewable Fuels Standard regulations. The U.S. Environmental Protection Agency has determined that biodiesel reduces greenhouse gas emissions by 22 percent compared to regular diesel, which is well below the 50 percent threshold needed to qualify for the federal mandate.
The controversial indirect land use factor has minimized biodiesel’s performance, he added.
The regulations, which are supposed to become law by the end of this month, will make biodiesel the first industry in the United States to be regulated for its carbon output.
“Not the petroleum industry. Not the chemicals industry. Not the power generation industry. None of them are regulated for carbon,” he said.
The National Biodiesel Board submitted a 122-page response to the proposed regulations as well as 300 pages of scientific attachments to convince the EPA it is making a mistake. Nine environmental groups that oppose biofuel production from conventional feedstock submitted a 14-page response.
“About half of those pages were just telling the EPA they did a good job,” Jobe said.
By the end of his speech to CRFA delegates, it became clear that two grueling years of economic hardship and the constant barrage of criticism from biodiesel detractors had taken a toll on the industry’s chief lobbyist. Jobe’s voice cracked with emotion when he delivered his parting message to delegates.
“We are changing the world and we’re changing it for the good and we’re affecting a lot of lives and a lot of livelihoods and we’ve got to keep fighting.”
