WASHINGTON - The National Biodiesel Board (NBB) released a study conducted by renowned economic analyst, John M. Urbanchuk. The study examined the economic impact of the biodiesel industry and the negative consequences of allowing the credit to lapse. The biodiesel tax incentive is currently set to expire on December 31, 2009.
"Since it was enacted in 2004, the biodiesel tax incentive has allowed the nation to reap the economic, energy security and environmental benefits associated with commercial scale production and use of biodiesel," stated Manning Feraci, Vice President of Federal Affairs for the NBB. "Allowing the credit to lapse will compound the already daunting challenges facing the industry and will cost the nation another 23,000 jobs in addition to the 29,000 jobs that were shed in 2009."
The biodiesel tax incentive is designed in a manner that makes biodiesel price competitive with diesel fuel in the marketplace. The incentive is structured so that the value of the incentive is reflected in the market price of the fuel. Urbanchuk's analysis concludes that without the biodiesel tax incentive, there will be: a loss of jobs and income; increased demand for petroleum diesel; a degradation of energy security; decreased demand for soybean oil and lower soybean prices leading to a negative impact on farm income; and stranded investment as biodiesel capacity is idled and lost tax revenue for States and local governments.
"Biodiesel production is consistent with an energy policy that values the creation of green jobs and the displacement of petroleum with domestically produced, low carbon fuel. Action by Congress to extend the incentive before the end of the year is absolutely necessary if we as a nation are to continue realizing the benefits of domestic biodiesel production," concluded Feraci.
To read the full report by John J. Urbanchuk, click HERE.