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November 5, 2004 |
"It's estimated that the tax incentive could create up to 50 thousand jobs in the United States over the next ten years. "
Saint Louis, Missouri [RenewableEnergyAccess.com] The US$140 billion Corporate Tax Bill (H.R. 4520), or so-called "JOBS bill," which has since been signed by President George W. Bush, contained the first ever federal biodiesel tax incentive. The American Soybean Association (ASA), the National Biodiesel Board (NBB) and biodiesel enthusiasts praised Congress for the new tax credit which they believe will help broaden the national appeal and increase demand for the domestic fuel.
"This tax incentive generated strong bi-partisan support because it
truly is a win for all Americans," said NBB chairman and ASA first vice
president Bob Metz of South Dakota. "Our nation has a direct interest in
taking steps to promote renewable fuels, like ethanol and biodiesel, which
lessen our dependence on foreign oil.
Senator Chuck Grassley (R-IA), Senator Blanche Lincoln (D-AR), Congressman Kenny
Hulshof (R-MO) and others championed the tax incentive.
"Biodiesel holds great hope to help reduce our dependence on foreign oil
and improve our environment," Grassley said. "The President's
signature will begin the process of making that hope a reality. The tax credits
for biodiesel and other renewable fuels included in my JOBS bill will allow us
to begin looking to farmers, rather than the Middle East, to fuel our
future."
The biodiesel tax incentive, which is structured as a federal excise tax credit,
amounts to a penny per percentage point of biodiesel blended with petroleum
diesel for first-use oils, like soybean oil, and a half-penny per percentage for
biodiesel made from other sources, like recycled cooking oil. It will lower the
cost of biodiesel to consumers in taxable and tax exempt markets.
The incentive is expected to increase biodiesel demand from an estimated 30
million gallons in fiscal year 2004 to at least 124 million gallons per year,
based on a United States Department of Agriculture study. However, depending on
a number of other factors including crude oil prices, the industry projects that
demand could grow much higher than that in the next decade.
The tax incentive will take effect Jan. 1, 2005, and lasts for two years. It is
expected to provide an economic surge in several sectors of the U.S. economy
including manufacturing, agriculture, and all sectors that provide support
services to these industries. It's estimated that the tax incentive could create
up to 50 thousand jobs in the United States over the next ten years. The
provisions will significantly benefit the U.S. economy and could increase U.S.
gross output by almost $7 billion.
Biodiesel is a cleaner burning alternative to petroleum-based diesel, and it is
made from renewable resources like soybeans and other natural fats and oils,
grown here in the United States. It works in any diesel engine with few or no
modifications. It can be used in its pure form (B100), or blended with petroleum
diesel at any level-most commonly 20 percent (B20).
More than 400 major fleets use biodiesel commercially nationwide. About 300
retail filling stations make biodiesel available to the public, and more than
1000 petroleum distributors carry it nationwide. On a lifecycle basis, biodiesel
reduces carbon dioxide by 78 percent compared to petroleum diesel.
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