WASHINGTON – This week, NACS urged to the U.S. Senate Finance Committee to add a short extension and five-year phase-out of the $1 tax credit for biodiesel blenders as part of tax reform. A proposed change to the tax credit from a blenders’ credit to a producers’ tax credit would reduce access to affordable biofuel and “make no credit a preferable option.”

In a letter to Senate Finance Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR), NACS Government Relations Director Paige Anderson pointed out that the $1 blenders’ credit, which expired last year, has served the purpose of “incentivizing the use of biofuel in the nation’s fuel supply” and thereby ensuring the nation’s energy security and independence, helping to improve emissions characteristics of fuel, and lowering prices at the pump for American consumers.

In contrast, a producers’ tax credit would “place a de facto tax of $1 per gallon on imported biodiesel, reducing blenders’ access to affordable biofuel” and “incentivize exportation of domestically-produced product,” further reducing supplies of reasonably priced fuel.

For these reasons, NACS asked the committee to enact a short extension of the blenders’ credit coupled with a responsible phase out. Doing so will “give businesses the time and certainty needed to plan accordingly.” Such a phase out would be similar to the phase out schedules used by other renewable energy credits.

The biodiesel blenders’ tax credit expired on December 31, 2016. In the past, this tax credit has been renewed as part of a package of short-term energy tax credits extensions package. These “tax extenders” have not been part either the House nor the Senate reform packages. However, there has been some discussion on doing a separate extenders package later this year or early next year.