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U.S. biodiesel profitable despite expired tax credit

The U.S. biodiesel industry has remained profitable this year despite the expiration of the Biodiesel Tax Credit.

Data from the University of Illinois shows a pattern of good financial years tied closely to the $1 dollar per-gallon credit.

National Biodiesel Board (NBB) vice president of federal affairs Anne Steckel says a combination of factors may explain why 2017 has been an outlier.

“We have a tax incentive that’s been off and on.  We have a RIN credit that you can get through the RFS.  So depending on what the RFS volumes are and what time of the year it is will certainly influence pricing in how much the RIN’s go for.  So it’s a complex market that we operate in.”

She tells Brownfield even though this year has been relatively strong for American biodiesel producers, the industry still needs long-term certainty.

“It’s incredibly important for planning purposes that the Biodiesel Tax Credit not be done retroactively rather than prospectively.  So that’s why we’re urging members of Congress, because it does affect our production and price.”

NBB supports bipartisan legislation introduced in the House and Senate that would not only reinstate the Biodiesel Tax Credit for three years, but change it from a blender to a producer credit.