Actions out of the nation’s capitol should heat up biodiesel activity across the country. Lawmakers recently reinstated the $1-a-gallon tax credit for biodiesel and also continue it through 2011. The biodiesel credit expired at the end of 2009.
Biodiesel is a commercially viable, renewable, low carbon diesel replacement fuel that is widely accepted in the marketplace. The fuel meets an exact commercial fuel specification and is the only domestically produced, commercial scale fuel that qualifies as an advanced biofuel under the Renewable Fuels Standard.
The biodiesel tax incentive is structured in a manner that makes the fuel price competitive with conventional diesel fuel in the marketplace. The lapse of the tax incentive on December 31, 2009 had a detrimental impact on the domestic biodiesel industry. But a retroactive reinstatement and extension of the tax incentive through 2011 is widely expected to increase U.S. biodiesel production and in the process, displace foreign petroleum.