Jobe: the tax credit is a buffer against RFS2 waivers

Jobe and six other renewable energy trade association leaders convened under one roof and answered questions on people's minds.
By Ron Kotrba | May 04, 2011

Joe Jobe, CEO of the National Biodiesel Board, sat among six other renewable energy trade association leaders at the opening general session of the International Biomass Conference & Expo in St. Louis May 3. Some of the others on the panel (for the complete list of panelists, click here) included Mary Rosenthal of the Algal Biomass Organization, Bob Dinneen with the Renewable Fuels Association and Michael McAdams of the Advanced Biofuels Association.

The gathering of these individuals together all under one roof to discuss policy, energy, markets and the future was truly impressive. I couldn’t help but think that, 50 years down the line when (we hope) a good portion of our energy comes from renewables, these seven individuals—and their constituency—could be thanked. It was almost an historic moment, or at least it seemed that way to me.

Jobe mentioned recent biodiesel production statistics, which are looking good compared to a few months ago. While it’s too early to predict a “trend,” if these numbers hold up, there should be absolutely no problem in meeting the 800 million gallon biomass-based diesel mandate in 2011 under RFS2.

He also cautioned those in the public eye not to wish the year-to-year tax credit away, but rather Jobe said it is a vital component to the fulfillment of RFS2. What he meant is, if there’s no tax credit—the return of which has been blamed by some in the industry for creating instability in the market and therefore keeping investors away—then biodiesel will become too expensive or too scarce, only fueling the fire of waiver requests from the obligated parties. He said the tax credit is critical as a buffer against these waivers.

What do you think? Do you agree with Jobe or not, and why? I’d like to hear your opinions on this important topic.


2 Responses

  1. Brent Baker



    I have to admit i have been skeptical about the year to year extension of the credit causing instability as well. The way to make it work much better is to get the credit extended for 4 years! This will make the credit more valuable to the industry, the country and the tax-payers. 4 MORE YEARS!!

  2. Roman Wolff



    Brent; there are ussualy 2 "bills" sponsored, one that has a 5 year extension and converts the current blender's credit to a producer credit (so imported biodiesel would not qualify). The second is the one year extension to what we already have. We have had to settle for what we already have, or nothing... The RFS-2 is very new and in a state of flux, the tax credit will help offset the costs of registration of plants and feedstocks in addition to helping the biodiesel industry have some stability. I agree, let's extend the tax credit for 5 years and not touch RFS-2 (other than the already scheduled increases in the mandate) for the same period of time. This will help investors make decisions, including investments in feedstock.

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