Passage of biodiesel tax incentive
October 17, 2004

SAINT LOUIS, MO. - President George W. Bush signed into law a bill containing the first biodiesel tax incentive, a provision that is expected to increase domestic energy security, reduce pollution and stimulate the economy. The American Soybean Association (ASA), the National Biodiesel Board (NBB) and biodiesel enthusiasts commended Washington leaders for passing the biodiesel tax incentive and extending the ethanol tax incentive as part of H. R. 4520, also known as the American JOBS Creation Act of 2004.

“This tax incentive generated strong bi-partisan support because it truly is a win for all Americans,” said NBB chairman and ASA first vice president Bob Metz of South Dakota. “Our nation has a direct interest in taking steps to promote renewable fuels, like ethanol and biodiesel, which lessen our dependence on foreign oil. Biodiesel has many benefits that are important to all citizens. It reduces emissions that are harmful to human health and the environment, it’s nontoxic and biodegradable, and its increased production will create jobs.”

Senator Chuck Grassley (R-IA), Senator Blanche Lincoln (D-AR), Congressman Kenny Hulshof (R-MO) and others championed the tax incentive.

It will lower the cost of biodiesel to consumers in taxable and tax exempt markets. Based on the USDA baseline estimates for future soybean production, over a five year time period the biodiesel tax provisions could add almost $1 billion directly to the bottom line of US farm income. In addition, the provisions will significantly benefit the US economy and could increase US gross output by almost $7 billion.

"This is a new era for biodiesel," said NBB chairman and ASA first vice president Bob Metz of South Dakota. "This tax incentive is going to benefit all Americans. Biodiesel demand is going to soar, and with that will come cleaner air, decreased reliance on foreign oil, and economic development. This is a great day for biodiesel."

"Biodiesel holds great promise for helping reduce our dangerous dependence on foreign sources of oil. I'm glad that Congress has finally acted to promote this clean-burning renewable fuel," Grassley said. "It's a no-brainer to look to the Midwest rather than the Middle East to meet our energy needs." Lincoln is an ardent biodiesel supporter and has repeatedly gone on record to say she champions biodiesel because it benefits agricultural producers in Arkansas and other rural states, and it's a great step toward making this clean-burning fuel an integral part of our nation's energy portfolio.

"This is a tremendous victory for soybean growers and those who recognize the benefit of renewable fuels like biodiesel," said Hulshof. "Farmers will benefit from having value added to their crops, and we will all benefit from producing a cleaner burning fuel that lessens our dependence on foreign sources of energy. I'm proud that my colleagues have recognized the advantages of this important technology."
Biodiesel is a cleaner burning alternative to petroleum-based diesel, and it is made from renewable resources like soybeans, grown here in the United States. It works in any diesel engine with few or no modifications. It can be used in its pure form (B100), or blended with petroleum diesel at any level-most commonly 20 percent (B20). Soybean farmers have invested millions of dollars through the soybean check off to build the biodiesel industry in the United States.

More than 400 major fleets use biodiesel commercially nationwide. About 300 retail filling stations make biodiesel available to the public, and more than 1000 petroleum distributors carry it nationwide. Biodiesel is nontoxic, biodegradable and essentially free of sulfur and aromatics. Biodiesel offers similar fuel economy, horsepower and torque to petroleum diesel while providing superior lubricity. It significantly reduces emissions of carbon monoxide, particulate matter, unburned hydrocarbons and sulfates. On a lifecycle basis, biodiesel reduces carbon dioxide by 78 percent compared to petroleum diesel.