The American Soybean Association (ASA) is celebrating final passage of legislation that includes an extension of the biodiesel tax incentive for one year through Dec. 31, 2009, and provisions to shut down the abusive "splash and dash" practice that currently allows foreign-produced fuel to enter the U.S., claim the biodiesel tax incentive and be shipped to a third country for end use.
"Enactment of the biodiesel tax credit extension represents a significant legislative achievement on a key ASA priority because the growth in biodiesel sales has raised soybean prices by a conservative estimate of at least $2 per bushel," said ASA President John Hoffman, a soybean producer from Waterloo, Iowa. "Soybean farmers greatly appreciate the work of Congress to get this extension through before they adjourned."
In an interesting twist, the Senate added the tax extenders bill, including the one year extension of the biodiesel tax credit, to the financial rescue package (H.R. 1424, the Emergency Economic Stabilization Act), which the Senate passed on Oct. 1, by a vote of 74-25. The House passed the measure by a vote of 263-171. President George W. Bush signed the bill into law.
Earlier, ASA issued a "Call to Action" to its members to contact Members of Congress and urge them to support the extension of the biodiesel tax credit included in the economic rescue legislation. ASA also signed on to a letter with a broad coalition of businesses, environmental organizations, public health advocates, electric utilities, agricultural organizations, investors, labor groups, non-governmental organizations, states and trade associations urging Congress not to adjourn before enacting the tax extenders package.
ASA and its 25 state affiliates successfully championed the original biodiesel incentive that became law in 2004. In 2005, ASA also achieved its goal when the landmark Energy Bill extended the biodiesel tax incentive through 2008. The excise tax credit amounts to a penny per percentage point of biodiesel blended with petroleum diesel for "agri-biodiesel," such as that made from soybean oil.
"Biodiesel is an excellent way for America’s soybean growers to boost U.S. energy security, promote economic development and improve the environment," Hoffman said. "This legislation will also help support the price of soybeans by creating demand for biodiesel made from soybean oil."