Biodiesel producers respond to Obama's first year

By Nicholas Zeman | November 20, 2009
Posted December 2, 2009

Nothing's definite. That's what biodiesel businessmen are saying about U.S. President Barack Obama and his commitment to the proliferation of the fuel. Looming-and that's the only word for these situations-are the expiration of the federal excise tax credit for biodiesel and implementation of RFS2, and policy decisions certainly are at the forefront of biodiesel brains as 2009 comes to an end.

"If we don't get the incentive, we won't be in business," said J. Allan French of Chesapeake Custom Chemical, a 5 MMgy facility in Ridgeway, Va. Sen. Charles Grassley (R-Iowa) introduced the Biodiesel Tax Incentive Reform and Extension Act last summer, but the issue keeps being pushed back and could be lumped in a package deal with other "more controversial" tax legislation, Grassley said in a Nov. 25 release, adding that biodiesel incentives should be kept separate from others.

"Grassley's bill could get us back on our feet again, but right now I have zero faith in Congress and about half that much in our President. In every speech he gives, he says something about biodiesel-and what does he do for us-nothing," French said.

In addition, some say that implementation of RFS2-mandating the use of 1 billion gallons per year by 2012-may cause as many difficulties benefits. Particularly, greenhouse gas, renewable identification number credits, and feedstock origin reporting could cause "a lot of paperwork," a Georgia producer told Biodiesel Magazine. "It could add a lot of layers to what we already have to deal with."

There hasn't been a lot of movement on the positive in terms of administerial decisions, said Miamisburg, Ohio's Jatrodiesel CEO, Raj Mosali. "Even though a lot was said, most of the funding under the American Recovery and Reinvestment Act has gone to research," he said. "There's been virtually no support for existing producers to make improvements to actual fuel processes."

The big picture items like the excise tax credit and RFS2 have "nothing going on," Mosali added. "This has been particularly hard as an equipment provider because nobody wants to do anything until they know what's going to happen-they're waiting for the end of the year."
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