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Biodiesel tax credit, small refiner exemptions hot topics in D.C.

Minnesota soybean farmers represented at National Biodiesel Board member meeting

Three Minnesota soybean farmers traveled to Washington, D.C. this week to be a voice for the biodiesel industry on Capitol Hill.

legislators
(From left to right): REG’s Scott Hedderich, Sen. Tina Smith, Ron Obermoller, Jim Willers.

Chris Hill, Jim Willers and Ron Obermoller represented Minnesota at the National Biodiesel Board (NBB) member meeting June 25-27. The three soybean farmers, along with representatives from two of Minnesota’s three biodiesel processing plants, met with 10 legislators to discuss their current concerns and issues within the biodiesel industry.

“We met with our legislators to ask for a permanent, full $1.00 per gallon blender’s tax credit,” says Hill, who is Minnesota’s voting member on the NBB board. “In today’s farm economy, we need certainty. This incentive will continue to foster growth in the U.S. biodiesel market.”

For several years, the U.S. biodiesel industry sought to convert the biodiesel blender’s tax credit to a producer’s credit in order to stave off imports of nearly $1 billion in 2017. However, in recent months, U.S. biodiesel producers prevailed in trade cases that imposed duties on unfairly subsidized imports from Indonesia and Argentina. With this success, the biodiesel industry, petroleum makers, truckers association and others have now united behind maintaining the current tax credit as a blender’s credit moving forward.

“The tax incentive has played a large part in the growth of the U.S. biodiesel industry,” Hill adds. “The credit helps our industry create jobs, reduce emissions, diversify the market and strengthens our energy security. Also, when the biodiesel industry is doing well, it’s a win-win for soybean farmers like myself.”

The second issue addressed on the Hill was the need for continued growth of higher volumes of biomass-based diesel and advanced biofuels under the renewable fuel standard (RFS).

“The proposed numbers came out while we were meeting with our legislators,” Willers said. “I’m glad to see the increase following two flatlined years. This is a step in the right direction.”

Chris Hill
(From left to right): Minnesota Soybean Processors Ron Marr, Rep. Tom Emmer, Chris Hill and MN Soybean’s Mike Youngerberg.

The EPA proposed the Renewable Volume Obligations (RVO) for the biomass-based diesel category would increase from 2.1 billion gallons in 2019 to 2.43 billion gallons in 2020. The advanced biofuel category, for which biodiesel also qualifies, would also increase slightly from 4.29 billion gallons in 2018 to 4.88 billion gallons in 2019, under the EPA’s proposal.

Much concern in the biodiesel industry revolves around the instability of the RFS program and EPA’s granting of small refiner exemptions.

“We (Minnesota delegation) made sure our legislators knew how much these exemptions will hurt the biodiesel industry,” Obermoller said. “It is estimated EPA’s small refiner exemptions undercut biodiesel demand by 100 million gallons in 2016 and 225 million gallons in 2017. We need to make sure EPA reallocates the lost demand.”

EPA Administrator Scott Pruitt has retroactively granted 2016 and 2017 exemptions to a high number of small refiners, along with granting exemptions to profitable refiners, including Sinclair Oil, Marathon, Chevron and Exxon.

“We have a strong backing from our Minnesota congressmen and women,” Hill says. “It doesn’t matter which side of the aisle – they see how the industry is benefiting Minnesota and only want to see it grow. Many of them ask us, ‘What else can we do to help  support the biodiesel industry?'”

The Minnesota delegation met with the following legislators and/or their staff:

  • Rep. Collin Peterson (D-MN-7)
  • Rep. Jason Lewis (R-MN-2)
  • Rep. Betty McCollum (D-MN-4)
  • Rep. Erik Paulsen (R-MN-3)
  • Rep. Tim Walz (D-MN-1)
  • Rep. Keith Ellison (D-MN-5)
  • Rep. Rick Nolan (D-MN-8)
  • Sen. Amy Klobuchar (D-MN)
  • Sen. Tina Smith (D-MN)
  • Rep. Tom Emmer (R-MN-6)
About the National Biodiesel Board

The National Biodiesel Board is the U.S. trade association representing the entire biodiesel value chain, including producers, feedstock suppliers, and fuel distributors, as well as the U.S. renewable diesel industry.

 

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