Washington, DC [RenewableEnergyAccess.com] The National Biodiesel Board (NBB) praised bipartisan legislation introduced last week by Rep. Lloyd Doggett (D-TX) to prevent large integrated oil companies from exploiting a federal tax incentive designed to stimulate biodiesel and renewable diesel production.The bill, called the Responsible Renewable Energy Tax Credit Act of 2007, would prevent oil companies from claiming a one dollar-per-gallon tax credit when using small amounts of biomass as an ingredient in making diesel fuel. Under the Doggett legislation, producers making renewable diesel solely from renewable sources, and as it was originally defined, would continue to be eligible for the credit.
“Unless the abuse of this tax credit is prohibited, it will have the exact opposite effect of what Congress intended — it will discourage the creation of real renewable diesel fuel — and all on the taxpayer’s dime,” said Congressman Doggett, a senior member of the House Ways and Means Committee. “Green energy initiatives must not be converted into public boondoggles.”
In April, the Internal Revenue Service (IRS) approved a request to expand the definition of “renewable diesel” in the Energy Policy Act of 2005 to include the act of adding biomass to conventional refinery processes.
“The recent IRS ruling could lead to unintended recipients taking advantage of the renewable diesel credit,” said Rep. Kenny Hulshof (R-MO), an original cosponsor of the bill and longtime champion of biodiesel. “This bill fixes that problem. We should take every available step to encourage the use of renewable, homegrown fuels like biodiesel. This bill is designed to protect and encourage that potential.”