Legislative Inaction Hurting Biodiesel Industry Say Producers
May 15, 2014
Biodiesel producers say policy setbacks in Washington are taking a major toll on their business and they point to a new survey released Wednesday as proof.
Conducted by the National Biodiesel Board, the survey found nearly 80% of U.S. biodiesel producers have scaled back production this year and more than half have idled production at a plant altogether. Additionally, two-thirds of producers said they have already reduced or anticipate reducing their workforce as a result of the downturn.
The cutbacks come in the face of what the NBB calls a “weak” Renewable Fuel Standard proposal from the U.S. Environmental Protection agency along Congress’ failure to extend the biodiesel tax credit.
The survey of more than 50 biodiesel producers was released by the NBB and a group of U.S. senators at a press conference on Wednesday in which they called for Congress and the Obama administration to act quickly by supporting a stronger RFS and reinstating the tax credit. More than 50 biodiesel produces took part in the survey
“Inconsistency in Washington is wreaking havoc on the U.S. biodiesel industry,” said Anne Steckel, NBB’s vice president of federal affairs. “It’s not just hurting these producers. It is a setback for local economies where these plants operate, for our environment, for our national energy security, and for drivers who are tired of ever-increasing fuel prices that result from the petroleum industry’s monopoly at the pump.”
Among the other survey findings of biodiesel producers:
- 78% have reduced production versus 2013,
- 57% have idled production altogether or shut down a plant this year,
- 66% have reduced workforce or anticipate reducing workforce, and
- 85% have delayed or canceled expansion plans.
The RFS proposal, which has not yet been finalized, would establish a biodiesel standard of 1.28 billion gallons this year, a sharp cut from last year’s record production of nearly 1.8 billion
The $1 per gallon biodiesel tax credit expired on Jan. 1, marking the third time in five years that Congress has allowed it to lapse. Legislation to reinstate it is included in a bill currently under consideration in the Senate, but it’s unclear when or if the incentive might be reinstated.