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Extension Of Biodiesel Tax-Credit

19 January 2010

US - The Ohio Soybean Association (OSA) is calling on federal lawmakers to renew an extension of a $1-per-gallon biodiesel tax credit originally enacted in 2004, which encourages businesses and consumers to use biodiesel to reduce the nation's dependence on foreign oil.

The tax credit expired 31 December, and its absence harms the future prosperity of statewide businesses supported by domestic biodiesel production.

"Hundreds of jobs are threatened if Congress fails to extend this tax credit," said Jamie Butts, OSA executive director. "For example, Ohio's soybean farmers - who are responsible for growing the main source of biodiesel - will lose a significant market opportunity if action is not taken immediately." Agriculture is the state's No. 1 industry and will certainly be impacted by the success or failure of the proposed tax-credit extension.

Biodiesel is a domestic, renewable fuel made primarily from soybeans that is biodegradable and cleaner burning than petroleum diesel fuel. It aids in job creation, offers energy security and promotes a healthier environment. For these reasons, a retroactive extension of the biodiesel tax credit, directly reflected in the price of fuel at the pump, is being sought in Congress.

The expiration of the tax credit endangers the country's billion-dollar biodiesel industry, which could have detrimental effects on Ohio's economy.

Biodiesel will now be significantly more expensive in the marketplace than petroleum diesel fuel. As a result, the production and use of biodiesel in Ohio has been severely curtailed and layoffs for workers in businesses supported by domestic biodiesel production are imminent, directly affecting the state's eight biodiesel plants, 150 distributors and 50 biodiesel retail fuel stations.

"Congress needs to act now to safeguard a vital industry to Ohio," said biodiesel producer and marketer Hart Moore of Peter Cremer North America, an oleochemical marketer in Cincinnati. "Swift passage of the renewed legislation is imperative so that we don't miss out on the economic and developmental opportunities of biodiesel."

Since its enactment, the biodiesel tax incentive has increased the domestic production and use of biodiesel from 25 million gallons in 2004 to 690 million gallons in 2008. In 2009, the domestic biodiesel industry supported more than 23,000 jobs nationwide, displaced more than 26 million barrels of foreign oil and added more than $4 billion to the national economy.

Without domestic biodiesel production to offset the country's energy costs, gas prices would increase between 20 cents to 35 cents per gallon, according to the US Department of Energy. If the tax-credit extension is not passed, the average US household will not experience the $150 to $300 savings it did in 2008.

The Ohio Soybean Association is governed by a 24-member volunteer farmer board dedicated to education and promotion, as well as to uniting producer interest through support of legislative activities beneficial to the Ohio soybean industry.

TheCattleSite News Desk



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