Oil lobbyists exploiting IRS loophole to steal tax incentives from Biodiesel producers

[garybeck]

Maybe this is why Bush "supports biofuels?" Gotta wonder, was this loophole put in there intentionally?

---------------------

IRS Ruling Could Leave Promising Biodiesel Industry on a "Bridge to Nowhere"
Renewable Fuel Advocates Urge Congress to Close Dangerous and Expensive Loophole

JEFFERSON CITY, Mo. – When he first decided to open a biodiesel plant, Delaware farmer Marty Ross knew that it wouldn’t be easy. But he believed in biodiesel’s potential for both providing energy security and adding value to the Delaware soybean crop. Seven years later, his Clayton, Del. plant is in production, and beginning to enjoy some hard-earned success. The plant has the capacity to produce 5.5 million gallons of biodiesel a year, and Ross has plans to expand that as demand increases.

However, a dark cloud now hangs over his business and threatens to dampen the benefits that the biodiesel industry brings to all Americans.

“There’s no question that the government has encouraged our plant and others like us through grant programs and a federal tax incentive for biodiesel,” said Ross, president and founder of Mid-Atlantic Biodiesel. “Now, we feel like we are about to be stranded on a bridge to nowhere.”

Ross and many others in the biodiesel industry are under threat by some large integrated oil companies, who have aggressively pursued access to a federal tax incentive that was designed to stimulate an emerging technology. Special interests have successfully lobbied the U.S. Department of Treasury to exploit a loophole in a renewable diesel tax credit law for their own benefit.

“Certain powerful oil companies have managed to get the government to expand the definition of a separate provision that was added into the biodiesel tax credit law late in the legislative process,” said Joe Jobe, CEO of the National Biodiesel Board (NBB). “It’s our belief that this credit was developed to help a specific emerging technology, and not to further subsidize existing petroleum refineries.”

The provision in question allows fuel made from a specific process called thermal de-polymerization (TDP) to qualify for the same dollar-per-gallon incentive that was created for biodiesel produced from agricultural resources. The TDP process is a new technology to turn hazardous wastes, plastics, and food wastes like poultry offal and carcasses into a boiler fuel. Congress never had a chance to debate the provision, but it passed, along with the biodiesel tax incentive extension, in the 2005 Energy Policy Act.

Full News Release:
http://nbb.grassroots.com/07Releases/renewable_diesel/

Bloomberg article:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=axUrtn.WhHsw

[aquart]

1. What a surprise.