The American Soybean Association (ASA) applauds the United States Senate for passage of the Renewable Energy and Job Creation Act of 2008. The bill includes a one year extension of the biodiesel tax credit, which is a top priority for the ASA and the nationâ€™s soybean farmers. The biodiesel tax credit was scheduled to expire on December 31, 2008. The bill was overwhelmingly approved by the Senate on a vote of 93-2, and it now goes to the House of Representatives for consideration.
“The American Soybean Association greatly appreciates the work of the Senate to extend the biodiesel tax credit,” said ASA President John Hoffman, a soybean producer from Waterloo, Iowa. “Passage of this legislation to extend the biodiesel tax credit enhances the viability of the U.S. biodiesel industry, which is an important market for U.S. soybean farmers. ASA now urges House members to swiftly pass the measure and send it to the President to be signed into law.”
In 2007 alone, U.S. biodiesel production displaced 20 million barrels of petroleum. The U.S. biodiesel industry supports over 20,000 jobs and added over four billion dollars to the economy last year. Biodiesel is also a cleaner burning fuel that reduces carbon lifecycle emissions by 78 percent, the equivalent of removing 700,000 cars from the nationâ€™s roadways.
“A viable biodiesel industry can play an important role in our efforts to achieve energy independence, boost the economy and improve the environment,” Hoffman said.
The bill, which extends a variety of renewable energy tax provisions, also includes language that denies the biodiesel tax credit to fuel produced outside of the U.S. for consumption outside of the U.S. This is intended to shut down the abusive “splash and dash” practice that currently allows foreign produced fuel to enter the U.S, claim the biodiesel tax incentive, and be shipped to a third country for end use.
“ASA strongly supports ending the abusive practice of splash and dash, as it provided no energy or economic justification,” Hoffman said.
In 2005, ASA and its 25 State Affiliates successfully lobby Congress to extend the biodiesel tax incentive through 2008. Biodiesel sales grew from 75 million gallons in 2005 to 450 million gallons in 2007. The growth in biodiesel sales has raised soybean prices by a conservative estimate of at least $2.00 per bushel, increasing annual soybean farmer revenue by $5.1 billion.
The U.S. soybean oil used by the biodiesel industry has basically offset the amount lost in food uses due to trans fat labeling requirements implemented by the U.S. Food and Drug Administration (FDA) beginning in 2006. Fortunately, this drop in edible soybean oil consumption occurred at the same time as the young U.S. biodiesel industry was ramping up production.
“Over the past three years, the cumulative 10 percent drop due to the trans fat labeling requirement displaced more than 4.6 billion pounds of edible soybean oil, which was utilized to produce more than 600 million gallons of biodiesel,” Hoffman said.
ASA is the policy advocate and collective voice of its 23,000 producer-members on domestic and international issues of importance to all U.S. soybean farmers.