New England, New York Energy Groups Urge Lawmakers to Extend, Phase Out Biodiesel Blenders' Tax Credit

The New England Fuel Institute (NEFI) and the New York State Energy Coalition (NYSEC) marked the latest organizations to urge lawmakers to retroactively extend the biodiesel blenders’ tax credit and phase it out over five years.

In a letter to the Senate Finance Committee, NEFI and NYSEC said that proposals to shift the biodiesel tax credit to a producers’ credit would have an immediate and adverse effect on biodiesel supplies in the Northeast, including supply disruptions and an increase in consumer prices for biodiesel blended heating oil in New England and New York.

The organizations represent small businesses that deliver heating oil to more than 3 million homes and thousands of businesses in a seven-state region. This represents more than half of the entire U.S. market for home heating oil.

NATSO has long supported extending and phasing out the biodiesel blenders’ tax credit. The on and off-again nature of the tax credit, which expired in 2016, has created market uncertainty and left biodiesel blenders and retailers in the lurch as they wait to see if the credit will be extended.

Earlier this month, the National Association of Convenience Stores (NACS) and the Society of Independent Gasoline Marketers of America (SIGMA) told members of the Senate Finance Committee that although they support the biodiesel blenders’ tax credit, the associations would prefer no credit rather than have it converted to a producers’ credit.

[SIGMA Supports Biodiesel Blenders' Tax Credit; Prefers No Credit to Producers' Credit]

[NACS Joins SIGMA in Telling Senate Finance It Prefers No Biodiesel Tax Credit to Producers’ Credit]

NEFI and NYSEC said in their letter that more than 60 million gallons of biodiesel will be needed to meet the requirements of states like Rhode Island and New York that require the use of biodiesel. That figure does not include the millions of gallons required to meet growing consumer demand in states where discretionary blending occurs. Renewing the biodiesel tax credit at the blender level will help meet this growing demand by allowing heating oil distributors to blend biodiesel irrespective of where it is sourced.

Shifting to a producers' credit would essentially place a $1.00 per gallon tax on imported biodiesel, reducing blenders' affordable access to biodiesel and increasing the prices that blenders' must pay—which would be passed directly on to consumers.

A producers' credit also would incentivize the exporting of domestically-produced biodiesel, as producers would not be required to sell their product solely in the U.S. This would again reduce the amount of biofuel available to blend domestically and raise prices for consumers.

The fate of the biodiesel tax credit is expected to be determined when lawmakers tackle a group of expired energy tax credits in an extenders bill at the end of the year.


via Business Feeds

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