USCA Pushes for Biodiesel Tax Credit Extension

Posted: 3/29/2019

By Tom Hance

The U.S. Canola Association (USCA), along with other biodiesel industry stakeholders, continues to lobby Congress to reinstate the biodiesel blenders tax credit. The $1 per gallon credit for biodiesel and renewable diesel expired at the end of 2017, and while a bill that would have extended it seven years was passed by the House last December, it was not acted on by the Senate before Congress adjourned for the year. 

Supporters are keeping up the push in 2019 with USCA Capitol Hill visits in late January, a targeted industry fly-in in early February and an industry coalition letter to House leadership urging quick action on a package of tax extenders. 

The new chair of the Senate Finance Committee – which has jurisdiction over tax issues – is Senator Chuck Grassley of Iowa, the leading champion of the biodiesel tax credit. He has urged quick action and indicated there is bipartisan support in the Senate to pass a package of tax extenders as soon as the House can send them a tax vehicle. (All tax bills must originate in the House.)  The Democrat-controlled House and its new tax committee leadership wish to review tax policy and educate new members on temporary tax credits like the one for biodiesel.  

The House Ways & Means Committee held a hearing on temporary tax policy in March and the next step is to pass a tax bill for the Senate to consider. Another key sticking point in the House is Democrat support for “pay-as you-go”—(PAYGO)-- rules that require tax cuts and credits to be offset by spending reductions or revenue raisers.  Republicans and Democrat senators that support extending temporary tax credits do not believe that the tax extenders must be offset. House Democrats have not yet determined if they will waive the PAYGO rules or propose offsets for the Senate to consider.  

The USCA will continue to monitor Congressional activity and urge immediate action on a multi-year extension of the biodiesel tax credit. Canola oil is an excellent feedstock for biodiesel with its low saturated fat content. 

Tom Hance is a policy expert with Gordley Associates, based in Washington, D.C.

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