ABFA advocates for maintaining biobased diesel blenders credit

By Erin Voegele | April 13, 2016

The Advanced Biofuel Association is among a group of organizations that recently sent a letter to Senate Finance Committee leadership expressing concern over proposed changes to the biodiesel and renewable diesel blenders tax credit.

“We continue to believe that the existing blenders credit offers the most benefit to the widest array of stakeholders, from small producers of biofuels to truckers and drivers of diesel vehicles, heating oil users and the blenders and marketers, who make the distribution investments,” said the groups in the letter. “We urge you to oppose any change to the existing tax credit. Any change of this magnitude requires serious examination by both the Senate and House committees and the opportunity for affected taxpayers and consumers to inform Senators of the effects of this change.”

The letter argues that converting the $1.00 per gallon blenders tax credit to a producer tax credit and denying its availability to all fuels will benefit a small group of large biodiesel producers at the expense of fuel retailers and consumers.

Within the letter, the groups ask the committee to consider consumer costs of fuels, the cost of heating oil, the potential violation of trade agreements, renewable identification number (RIN) prices, and the impact on the ability to produce mandated volumes under the renewable fuels standard (RFS).

The associations signing the letter noted they represent every gallon of diesel sold in the U.S. as well as those who use the most diesel in the nation. “The current blenders credit for biodiesel is successfully creating a market for biodiesel and renewable diesel and building consumer acceptance,” they state in the letter. “Continuing the policy that allows truckers to share in the value, and benefits those who invest to blend the fuels, is a proven and sound policy. Ironically, moving to a production credit would lead to less use of renewable fuels in the United Sates and more being exported abroad. We believe the current blenders credit should continue to be extended in its current longstanding form for an additional two years. We urge you to reject any modification to this tax credit in any legislation without full oversight and regular order.”

In addition to the ABFA, the letter is signed by the National Association of Truck Stop Operators, the Petroleum Marketers Association of America, SIGMA, NACS, and American Trucking Associations. A full version of the letter can be downloaded from the ABFA website