Call to Extend Tax Credit for Poultry Derived Biofuel

After a decade of intensive development, the first commercial-scale waste-to-oil plant based on the Thermal Conversion Process (TCP) by Changing World Technologies is successfully processing up to 270 tons of poultry offal into 300 barrels of oil daily in Carthage, Missouri. The waste to oil process, however, treads a fine line between what is considered renewable energy and what’s not. The company would like to see their approach approved for federal biodiesel tax credits — which they are presently excluded from.

“Unfortunately, while the science works, political technicalities are preventing our company from meeting the demand to expand our U.S. operations,” said Brian Appel, chairman and CEO of Changing World Technologies (CWT). According to the company, CWT is unable to expand its U.S. operations due to limitations on the tax credit definition created by the Jobs Bill of 2004. Wording in the bill promotes development of biodiesel fuel from specific feedstocks, Appel said, but to the exclusion of other renewable energy sources such as oil produced by TCP. The Jobs Bill grants a tax credit of 50 cents to the dollar per gallon of biodiesel specifically derived from virgin soybeans and used cooking oils. CWT’s TCP-derived fuel, which meets the universal definition of biodiesel as a liquid fuel produced from biomass and utilizes animal waste from nearby poultry processing facilities as its feedstock, is excluded from the tax credit. “The exclusion is unfortunate because our fuel is superior in several ways,” said Appel. “It can be derived from a broad mix of waste products that are often difficult to dispose of otherwise, and it can be used as a gallon-for-gallon substitute for traditional diesel, rather than merely as an additive.” The Iowa Egg Board is just one of the commercial enterprises supportive of an expanded tax credit to permit additional TCP plants to be built. In a recent report, the board called for solutions to the waste disposal issue as a result of poultry processing. The board identified the TCP process, and stated that a plant in Missouri currently takes approximately 20 tons of material daily from nearby egg laying operations and turns that problematic waste stream into usable fuel. Appel said he would like to see the tax credit extended to other liquid bio-fuels to even out the subsidy playing field. The market for poultry waste products is drying up because they aren’t included in the tax credit. Appel cited the European Union as an example for encouraging development and production of all biomass derived energy. In a 2003 directive, the EU set forth a policy to encourage the development and availability of alternative fuels derived from a wide range of biomass sources. The directive defines biofuels simply as “liquid or gaseous fuels … produced from biomass” and lists 10 products that it “at least” considers biofuels. “Energy costs are now the single most important factor affecting the cost of agricultural production in this country, as reported this week in USA Today,” Appel said. “At a time when the United States is dependent upon foreign sources for more than 50 percent of our energy supply, the playing field must be leveled to encourage the growth of new renewable liquid fuels by broadening the definition of eligible technologies. Parity for bio-fuels must be achieved by extending the biodiesel credit or providing a similar credit to other sustainable fuel sources.”

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