The Senate has voted down a bill that would have reinstated the $1 per gallon biodiesel tax credit through the end of 2010, among other tax extenders

, according to the Oil Price Information Service.

Earlier this month, the House passed the bill, H.R. 4213, but Republicans in the Senate were concerned about deficits, as the legislation also included an extension of unemployment benefits.

The biodiesel tax credit, which expired Dec. 31, 2009, would have been retroactive in the bill, so any biodiesel blended in 2010 would be eligible for the credit.

The longer the industry goes without the tax break, the greater the impact, National Biodiesel Board CEO Joe Jobe told OPIS.

"What's happened is that even though the tax credit has been extraordinarily successful in stimulating investment and innovation -- with 150 plants built in the last five years since the inception of the tax credit - the Congress' inaction is just allowing all of that investment and innovation to suffocate," he said.

The next hope for the biodiesel industry to extend the credit is Congress' energy bill, which it should take up next month, OPIS said.