By TIM ALEXANDER
Illinois Correspondent

BLOOMINGTON, Ill. — As U.S. biodiesel production slowed to a crawl, the National Biodiesel Board (NBB) called on Congress to retroactively reinstate a crucial $1 federal biodiesel tax incentive to blenders which expired Jan. 1.

Though the House and Senate each approved separate versions of a tax extender package, renewal still hinges on approval of a final, reconciled bill and the signature of President Obama. NBB CEO Joe Jobe said during the Alternative Fuels and Vehicles Institute’s national conference in Las Vegas on May 11 that the biodiesel industry is in risk of total collapse, with jobs being lost every day because of Congress’ failure to reinstate the five year-old tax credit.

“Congress and the administration have said they are dedicated to a ‘jobs’ agenda – their first step should be to reinstate the biodiesel tax incentive,” said Jobe, adding while the credit was in effect more than 150 renewable fuels refineries in 44 states were constructed, generating 23,000 jobs and billions of dollars of net tax revenue, while displacing billions of gallons of petroleum.

Jobe extolled the environmental benefits of biodiesel production during his address to energy leaders.

“As we all wait in dread for the Gulf oil slick to wreak devastation on some of the nation’s most sensitive wetland habitats, Congress’ inaction has left America’s nontoxic, biodegradable biofuel at risk of collapse,” he stated.

“Further inaction by Congress to complete this common sense policy is causing the loss of jobs every day, derailing America’s investment in its first successful advanced biofuel, and it’s simply unacceptable.”

Biodiesel refinery workers are losing their jobs and new plant growth in Illinois is at a standstill because of the loss of the tax incentive, according to the Illinois Soybean Assoc. (ISA).

“The tax credit (is needed) to protect the Illinois biodiesel industry, its employees and thousands of green-collar jobs nationwide,” said Mike Cunningham, a Vermillion County soybean producer and ISA chairman, in a statement.

Cunningham said since the tax credit expired, biodiesel production and consumption have dramatically declined, biodiesel production facilities have closed and surplus soybean oil stocks are increasing due to low demand.

“It’s a catastrophic event, if you will,” Ron Moore, ISA chairman, told Farm World. “Not only do we need to have the tax credit reinstated back to December, we’ve already lost around 20,000 jobs in the biodiesel industry because of the uncertainty of the tax credit.

“This is not a time we need to be losing jobs, and I’m a little dismayed that Congress is blocking something both the Bush and Obama administrations were very supportive of in renewable fuels. Congress doesn’t seem to have the willpower to put partisan politics aside to work out something that is good for the environment and good for the U.S. job market.”

Ron Kindred, American Soybean Assoc. secretary and ISA at-large director from Atlanta, Ill., issued a call for action to the state’s soybean producers.

“Call Illinois’ U.S. senators and representatives to push for a biodiesel tax incentive extension before the Memorial Day recess,” Kindred urged producers last week.
“If we don’t make contacts with our legislators,” Moore added, “nothing will ever get done and we’ll have no one to blame but ourselves.”

Biodiesel manufacturer Renewable Energy Group of Ames, Iowa, has laid off 51 of its employees since Jan. 1, while Nittany Biodiesel of College Park, Pa., has laid off 20 of its 35 employees, and are operating with “mounting losses,” according to a May 13 report from DTN.

In Peoria County, fledgling Biofuels Manufacturers of Illinois, LLC has delayed further construction on its new $40 million biodiesel plant because of uncertainty over the blenders tax credit.
“The (biodiesel) industry is basically on hold,” Peter Johnsen, the company’s CEO, told the Peoria Journal Star last week. “We’re pushing back plans month-to-month.”

A plant in Danville, Ill., Blackhawk BioFuels, has suspended biodiesel production altogether.

“At its peak Illinois produced over 150 million gallons of biodiesel per year,” said Moore, adding that production in the state and elsewhere will need to be greatly increased if the industry is to have any chance of meeting federally-mandated biofuel production mandates by 2012.