The U.S. biodiesel industry produced 135 million gallons of fuel in the first two months of 2012, according to new numbers released by the EPA Wednesday.

Although the volume is an increase over the same period last year, when production totaled less than 80 million gallons, it is down from the record production late last year when the industry exceeded 100 million gallons per month for five consecutive months and reached a peak of 160 million gallons in December.

A $1 per gallon biodiesel tax credit expired in December and has yet to be reinstated. Anne Steckel, vice president of federal affairs for the National Biodiesel Board, says the drop-off reflects lost momentum this year after Congress allowed the biodiesel tax incentive to expire and the Obama Administration delayed finalizing next year's biodiesel volume requirement under the Renewable Fuel Standard.

"These are solid numbers that show the biodiesel industry is on pace to meet the 1 billion gallon RFS requirement this year, but they also reflect some of the missed opportunities for growth and jobs that we've seen with the loss of the tax credit and the continued uncertainty about next year's RFS volume," Steckel says. "With the tax credit and clear RFS growth in place, we think these numbers would be better."

Last year, the biodiesel industry produced a record of nearly 1.1 billion gallons, supporting more than 39,000 U.S. jobs and helping to reduce the nation's dependence on skyrocketing global petroleum prices.

Biodiesel is the first and only EPA-designated Advanced Biofuel in commercial-scale fuel production across the country. Made from an increasingly diverse mix of resources such as agricultural oils, recycled cooking oil and animal fats, it is produced in nearly every state in the country. Biodiesel can be used in existing diesel engines and meets strict specifications of ASTM D6751.