By KEVIN WALKER
Michigan Correspondent

ST. LOUIS, Mo. — The American Soybean Assoc. (ASA) expressed disappointment that Congress has yet to pass an extension of the biodiesel tax credit, which expired Dec. 31, 2009.

“It’s very discouraging,” said Rob Joslin, president of the ASA. “Congress got bogged down last year in health care reform. There’s 23,000 jobs in the biodiesel industry. Biodiesel decreases our reliance on imported oil.

“I’m so frustrated by it. I didn’t think this was going to go on this long.”

Joslin thinks the credit is actually pretty popular with members of Congress, but he believes it’s fallen victim to legislative maneuvering. He said the provision is being placed in unpopular legislation in the hopes that senators who wouldn’t otherwise vote for the bill might vote “yea” because of biodiesel. So far, it hasn’t worked.

Last month the U.S. Senate voted against a motion to get the credit into a small business bill. It happened when Sen. Charles Grassley (R-Iowa) tried to offer an amendment to enact the biodiesel credit retroactively. The idea was to suspend the rules so the amendment could be included. That would have extended the credit through this year, as long as the small business bill passed and was signed into law, but the attempt failed 41-58.

Joslin described the failed maneuver as bad decision-making by the leadership; however, all is not lost. House Agriculture Committee Chair Collin Peterson (D-Minn.) recently told ASA board member Bob Worth that an extension of the credit might get done, eventually.

“Chairman Peterson was not optimistic that the biodiesel tax credit extension was going to happen in the very near-term when Congress returns in September, which is not a good thing,” Worth said. “Chairman Peterson thought it was more likely that a one-year extension could get done in the lame duck session following the elections.”

Joslin said although he’s discouraged by the lack of progress on the biodiesel tax credit thus far, “we’ve gotten a couple of wins lately.” One of those was a regulatory victory earlier this year regarding the renewable fuel standard (RFS2).

The ASA and others have been worried about the U.S.
Environmental Protection Agency’s (EPA) use of “indirect land use” modeling to evaluate whether soy biodiesel can achieve sufficient greenhouse gas emissions reductions to qualify as an advanced biofuel under the RFS2 biodiesel mandate.

According to the ASA, the magic number for that requirement is 50 percent. With the way the EPA is doing its analysis now, the fuel qualifies.

“We were able to point out the flaws in the (EPA’s) methodology and incorrect assumptions,” Joslin said. “We got the proper interpretation of the rules there.”

The ASA also achieved a win with the bioenergy program, which is now administered by the USDA’s Rural Business-Cooperative Service (RBS). The program distributes a significant amount of money to eligible biodiesel producing plants.

When the RBS put out a notice in March, it included requirements that the ASA thought would hurt the biodiesel business. Among these was a requirement that the facility be located in a rural area, according to the agency’s specific definitions. It also stipulated that the plant had to be more than 50 percent domestically-owned.
The ASA and others lobbied against the provisions, and by August the RBS announced it had eliminated the requirement, stating that dropping the rules would make more plants eligible to participate in the program.

The Louis Dreyfus biodiesel and soybean processing plant in Claypool, Ind., is one of those plants. It’s owned by Louis Dreyfus SAS, which is based in France. The plant is a 50 million bushels-per-year facility. “It’s a significant impact in Indiana and also in Ohio,” Joslin said.