Biodiesel tax credit set to expire causing turmoil, complexities

By Nicholas Zeman | December 21, 2009
Posted December 23, 2009

If the U.S. Senate does not pass the biodiesel tax credit extension before it adjourns tomorrow-which probably will be the case-the earliest the industry could see a possible vote is January 19, said Alicia Clancy of Renewable Energy Group Inc., in a conversation with Biodiesel Magazine this morning. REG owns and operates several large biodiesel plants, and the tax credit expiration looms heavy on its short-term future business-as for all producers. "We heard from our senator here in Iowa [Grassley] that this is a priority when the Senate returns from holiday, but obviously we want to have it passed before it expires," Clancy said.

REG indicated that the tax credit will likely be passed in January and will have retroactive benefits for gallons blended between January 1 and the time when the extension takes effect. That's better than nothing, but it is still not an ideal situation, especially when it comes to contracts, sales and other business deals. "REG will only be offering B100 on our pricing sheet as of Jan.1," Clancy said. "This means that our customers will have to blend the fuel, and file the necessary paperwork with the IRS."
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