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Feraci: biodiesel tax credit reinstatement urgent

Further delay of reinstating the biodiesel tax incentive is creating doubt about the renewable fuel’s future.

“If the tax credit comes back in place and we get it done soon the industry will spring back to life and we’ll begin producing fuel; the jobs will come back,” says Manning Feraci, federal affairs vice president of the National Biodiesel Board. “But if the credit is allowed to languish and if this lapse continues much longer, it’s going to be very detrimental and you could do some structural harm to the industry.”

AUDIO: Manning Feraci (8 min. MP3)

There’s an urgent need for Congress to complete work on bringing back the incentive that expired at the end of 2009, according to Feraci.

“And we certainly hope that that happens sooner rather than later because it really is a dire, immediate situation for the biodiesel industry right now,” he says.

Feraci points out that the Biodiesel Tax incentive allows biodiesel to be price competitive with conventional petroleum diesel.

“Consumers are extremely price conscious when it comes to fuel and the result [of the tax incentive lapse] has been predictable,” says Feraci. “You’ve seen demand and production of the fuel significantly restrict.”

The lapse of the incentive has forced plant closures and layoffs that Feraci says could be reversed by reinstatement. Despite current budget sensitivities, Feraci says the incentive will result in economic recovery by putting idled workers – about 23,000 – back on the job.

He points out that in addition to those employed directly; the biodiesel industry supports other jobs, including feedstock providers, local contractors who do service work on production plants, fuel distributors, and those who maintain infrastructure.

“These are taxpayers that are in turn putting money back into the economy,” says Feraci, “and helping overall economic growth.”