U.S. Congress Extends Biodiesel Tax Credit

WASHINGTON– U.S. President George W. Bush signed the Emergency Economic Stabilization Act of 2008 into law Oct. 3, shortly after the U.S. House of Representatives passed the legislation with a 263 to 171 vote, according to Biodiesel Magazine. The U.S. Senate approved the bill Oct. 1 by a vote of 74 to 25.

The legislation extends the biodiesel tax credits through Dec. 31, 2009, and qualifies all biodiesel for a $1 per gallon tax credit, including biodiesel made from non-virgin feedstocks, such as yellow grease. Prior legislation limited the tax credit for biodiesel manufactured from non-virgin feedstocks to $0.50 per gallon. The act modified the definition of renewable diesel, eliminating the requirement that the fuel had to be produced using a thermal depolymerization process, including biomass fuel that qualifies as a renewable jet fuel under U.S. Department of Defense military specifications and excluding fuel derived from co-processing biomass with a non-biomass feedstock.

In addition, the law closes the splash and dash loophole, which allowed foreign-produced biodiesel to enter the U.S., be splash-blended to claim tax incentives, and then shipped to a third country for use.