A press release from the Minnesota Soybean Growers Association: 

NORTH MANKATO -- The Minnesota Soybean Growers Association (MSGA) welcomed the news that a bill has been introduced in the U.S. Congress to prevent large integrated oil companies from exploiting a federal tax incentive designed to stimulate biodiesel and renewable diesel production.

The bipartisan legislation, introduced by Rep. Lloyd Doggett (D-Texas), would prevent oil companies from claiming a $1-per-gallon tax credit when using small amounts of biomass as an ingredient in making diesel fuel.

"We're very grateful to Congressman Keith Ellison, from Minnesota's Fifth Congressional District for cosponsoring this bill," said MSGA President Bob Worth. "The legislation will correct a wrong that was created when the IRS, after being lobbied heavily by large integrated oil companies, ruled that conventional petroleum refineries could take advantage of $1-per-gallon tax incentive by co-processing raw vegetable oils and animal fats in their conventional refining process."

Under the Doggett legislation, producers making renewable diesel solely from renewable sources would continue to be eligible for the credit.

"We're not opposed to renewable diesel," Worth noted. "We're opposed to providing a tax incentive to companies that do nothing to serve the original intent of the Energy Policy Act, which included increasing our country's fuel capacity, prompting significant new investment in the economy, stimulating new jobs and promoting rural development."

According to Worth, biodiesel, an alternative to traditional petroleum-based diesel fuel that can be made from soybean oil, other vegetable oils or waste grease and animal fats, has come through in a big way as a result of the tax incentive.

"In Minnesota, alone, we've gone from zero biodiesel production capacity to 60 million gallon annual capacity," Worth said. "An economic study conducted by the Minnesota Department of Agriculture showed that the state's biodiesel industry has had direct, indirect and induced employment and economic impact of 5,668 jobs and $928 million dollars. Now that's what the $1-per-gallon incentive was designed to do, not subsidize the existing operations of oil refineries."

Worth also said that the oil companies' alleged exploitation of an unintended loophole will result in dire consequences to the biodiesel industry and will likely cost the federal government billions of dollars for a product that, in the end, has the same chemical properties of diesel fuel.

"The winners will be the oil companies who will receive windfall profits in a way that will not add significant refinery capacity or economic or environmental benefits to the country," Worth said. "The losers will be small businesses who have invested in their communities to build new biodiesel refinery capacity. The other losers will be the U.S. taxpayers who will foot the bill for this flawed policy."

The Minnesota Soybean Growers Association is a nonprofit, farmer-controlled membership organization established in 1962. Its goal is to assure profitable soybean farming by monitoring government policies and supporting research and market development activities.

For more information, go to www.biodiesel.org [1].