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No guarantee US biodiesel tax credit gets extended this term: Grassley spokeswoman

Houston — A representative for the US senator sponsoring a bill that would extend the biodiesel tax credit said late Monday that there was no guarantee the bill would be considered before the end of the congressional session.

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"It's not clear whether tax extenders will be done this fall," said Jill Gerber, spokeswoman for Senator Chuck Grassley, R-Iowa. "The biodiesel tax extension and modification remains a priority for Senator Grassley, should tax extenders be included as part of any end-of-year package."

Senate Bill 3188 would extend the $1/gal tax credit through 2019 and change the credit from a blenders tax credit to a domestic producers tax credit. Grassley sponsored the bill, which has 16 co-sponsors from both sides of the political aisle.

The existing tax credit was extended through 2016 in December 2015. In prior congressional sessions, the credit had been reinstated retroactively.



Market sources have pointed to the expiring credit as one reason behind dwindling interest recently in the prompt biodiesel market. The tax credit makes biodiesel more attractive to potential blenders.

Grassley introduced S3188 on July 13. It was sent to the Senate Finance Committee. According to congress.gov, the bill has not been reported out of committee yet. The congressional session ends December 30.

While extending the tax credit is seen as key in encouraging the market, the bigger impact could be made by the proposed change from a blenders credit to a producers credit.

Domestic biodiesel producers and their trade group, the National Biodiesel Board, have made the producers credit a major focus of their lobbying efforts. The NBB argues that by making only domestic producers eligible for the tax credit, it makes domestic biodiesel more competitive with imports. The trade group argues that export tax schemes such as those in Argentina -- the top supplier of US biodiesel imports -- give imported biodiesel an advantage over domestic supplies.

Sources in Argentina have said previously that changing the tax credit would effectively end Argentinian biodiesel imports into the US.

--Wes Swift, wesley.swift@spglobal.com

--Edited by Jason Lindquist, jason.lindquist@spglobal.com