Tax break fuels a lobbying fight over alternative energy

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An IRS decision to expand eligibility for an alternative fuel tax credit has triggered a lobbying fight that features a major oil company, a large chicken producer and a trade association of soap and detergent manufacturers.

The IRS last month said a $1-a-gallon “renewable diesel” tax break included as part of the Energy Policy Act of 2005 could apply to a method employed by oil giant ConocoPhillips of adding animal fats to its traditional diesel refining processes.

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The more open definition could increase the cost of the break by hundreds of millions of dollars and, critics fear, squeeze out more smaller rival biodiesel producers that use soybean oil and animal fats to make fuels.

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The National Biodiesel Board, a group of biodiesel producers, which also enjoy a separate $1-a-gallon tax break, backs the Doggett bill.

Board members fear oil companies will buy up large volumes of feedstock and bid up the price of animal fats. They say their renewable energy industry is more deserving of federal help because the fuel has more environmental benefits and increases fuel supplies.


http://thehill.com/the-executive/tax-break-fuels-a-lobbying-fight-over-alternative-energy-2007-05-24.html