WASHINGTON, D.C. — Nearly 100 U.S. biodiesel leaders pressed Congress last week to reinstate the biodiesel tax incentive as a domestic production credit, in line with a proposal passed unanimously by the Senate Finance Committee in July.

“Members of Congress should understand that in the business world, this kind of unpredictability makes planning for growth nearly impossible,” said Harry Simpson, CEO of Crimson Renewable Energy, a Denver, Colo.-based company operating one of the largest biodiesel refineries on the West Coast, in Bakersfield, Calif.

Since the $1-per-gallon incentive expired on Dec. 31, 2014, it marks the fourth time in six years Congress has allowed it to lapse, according to the National Biodiesel Board (NBB). It said the continued uncertainty surrounding the incentive has severely stymied investment and growth in the industry.

“People wonder why the economy isn’t doing better, why more companies aren’t hiring, and it’s this kind of inaction in Washington that is holding companies back,” Simpson said. “We are urging responsible lawmakers to step up and pass a producer’s tax credit as quickly as possible so we can get the biodiesel industry back on track. It is a critical issue for our company.”

On July 21, the biodiesel industry backed a key reform the Senate Finance Committee passed in the Tax Relief Extension Act of 2015 (S.1946) that would convert the incentive from a blender’s credit to a producer’s credit focused on domestic production.

Under the existing blender’s structure, biodiesel produced overseas and blended in the United States is increasingly taking advantage of the incentive, undermining U.S. production and directing U.S. tax benefits to foreign producers.

Currently, biodiesel has displaced about 1.8 billion gallons of U.S. petroleum diesel in each of the past two years – and more than 8 billion gallons over the last decade – despite being produced in nearly every state and having supported more than 62,000 jobs, the NBB said.

By narrowing the eligibility for the credit to domestic producers, the reform would save about $90 million, according to the Joint Committee on Taxation.

“This is a common-sense reform that will appropriately focus the incentive on stimulating U.S. production and jobs, while streamlining IRS administration of the credit,” said Anne Steckel, NBB vice president of federal affairs. “It makes a good policy better.”

By Nov. 30, the EPA is supposed to finalize federal Renewable Fuel Standard volume requirements for 2014 and 2015 and resolve a pending waiver petition for 2014. Jenna Higgins Rose, communications director for the Iowa Biodiesel Board (IBB), said, “We’re optimistic that volumes will be better than what we’ve seen.”

As the nation’s top biofuel producer in biodiesel and ethanol, Iowa has a vested interest in the success of the requested tax incentive. Members of the IBB were in Washington, D.C., on Nov. 17 to urge the state’s Congressional delegation to extend the incentive for biodiesel for two years, through 2016. In addition, the delegation asked for a restructuring of the $1 credit for biodiesel and renewable diesel.

“This is critical because the current structure allows foreign biodiesel producers to take advantage of the credit if their fuel is blended in the U.S.,” said Grant Kimberley, IBB executive director. “It’s just rational that we use our taxpayer money to stimulate domestic energy growth, like the impressive renewable energy industry Iowa has built, rather than subsidizing foreign producers with our tax dollars.”

He said U.S. Sen. Charles Grassley (R-Iowa) has sponsored a bill that would correct the loophole in the existing program. In fact, according to the Joint Committee on Taxation, this reform would save U.S. taxpayers $90 million.

“The biodiesel tax incentive has broad bipartisan support because it works to create jobs and economic activity, and it furthers our energy policy goals to diversify the fuel markets and reduce emissions,” Steckel said. “It is irresponsible that Congress has allowed this incentive to remain lapsed all year when we know the impact it has, particularly when billions of dollars of incentives for fossil fuels industries are written permanently into the tax code. We should have clear, forward-looking tax policy, not this unpredictable, on-again, off-again system where Congress waits until the 11th hour every year to get anything done.”