Soybean growers and the biodiesel industry got an early present when Congress reached an agreement on a funding bill that included an extension of the biodiesel tax credit.
“I would call it a Christmas miracle,” said Grant Kimberley, executive director of the Iowa Biodiesel Board. “Finally, we’ve got a little certainty for the marketplace.”
That certainty has been hard to come by in recent years. Created nearly 15 years ago, the biodiesel tax credit has generally been continued on a year-by-year basis. In recent years that renewal has gotten later and later, often requiring language making it retroactive.
It had often been attached to year-end budget bills, along with several others generally grouped together as a collection of “tax extenders.” In December 2017 Congress, despite being controlled by one party, failed to pass a renewal. In February 2018 it finally passed language renewing the credit retroactively to the end of 2017, but did not take it into 2018. Last December it failed to act.
This year’s action came as part of a compromise end-of-year bill in the House. It renewed the credit retroactively for 2018 and 2019 and also extended it for three more years, through the end of 2022. The House passed the bill and the Senate was expected to do so.
Kimberley said farmers and biodiesel producers could not be happier.
“It’s a lifeline for biodiesel producers,” he said.
At least 10 biodiesel plants across the country, two of them in Iowa, had stopped production in the past year or two. Most others were barely managing to stay open, Kimberley said, adding that none had been operating at anything close to full production.
Numerous farm organizations issued statements praising the move by Congress, especially supporting the idea that the credit was not only renewed, but will continue for an extended period, meaning this same battle does not need to be fought next year.
Biodiesel has added about 60 to 90 cents a bushel to the price of soybeans in recent years, Kimberley said. This latest move will boost that industry.
The industry was still waiting on several other important items.