U.S. House of Representatives Extends Biodiesel Tax Credit One Year

The House approved the expansive $31 billion tax extenders package 241 to 181, which includes a one year extension for the biodiesel tax credit set to expire December 31, 2009. This will continue the biodiesel tax credit into 2010. However, the Senate must still act on the plan.

"While it remains to be seen when or if the Senate will take up this tax incentive provision, the NBB will continue to work with its memebership and Senators to ensure this important measure is passed and signed into law," said Michael C. Frohlich, Director of Communications for the National Biodiesl Board's Washington, D.C. office.

"In terms of the five-year tax extension that would also alter the credit from a production excise credit to a producers credit, it is clear that due to the legislative calendar and the priorities currenly facing Congress - healthcare being front and center - that legislation will not be voted on this year. Therefore, the NBB has decided to endorse the one year extension as to ensure that the tax credit does not expire, and will continue to work towards a multiyear producer tax credit in the future."

It’s a Very Biodiesel Christmas in Washington D.C.

Ironically, on the heels of the expiration of the Biodiesel Tax Incentive on December 31, the Capital Christmas Tree has made its 4,000 mile journey cross country from Arizona to the nation's capital on trucks fueled with a B5 biodiesel blend.

"It is significant that the Capitol Christmas Tree was delivered with biodiesel because economic development, carbon reduction, and energy security continue to dominate national priorities", said Joe Jobe, CEo of the National Biodiesel Board. "Biodiesel helps us achieve all of those things".

The trucks carrying the tree and its 10,000 handmade ornaments and 80 companion trees that will be set up throughout the Capital Complex made their journey across the country using the "BioTrucker" system, traveling from some of the 800 existing biodiesel stations to fuel up with donated biodiesel along the way.

Biodiesel is a renewable fuel for diesel engines. It reduces lifecycle carbon dioxice emissions by 78 percent, is made domestically from agricultural byproducts such as soybean oil and other fats and oils, and it supports thousands of green jobs.

To help save the Biodiesel Tax Incentive, please visit the National Biodiesel Board's Tax Credit Action Center by Clicking Here.

Help Save the Biodiesel Tax Incentive

The Biodiesel tax incentive will expire on December 31, 2009 unless Congress acts affirmatively to extend the tax credit.

The biodiesel tax incentive was enacted in 2004 allowing the nation to reap the economic energy, security and environmental benefits associated with commerical scal production and use of biodiesel. This incentive is designed in such a way that makes biodiesel competitively priced with petroleum diesel in the marketplace.

If the credit is allowed to lapse, it will intensify the astounding challenges that face the industry already and will cost the U.S. an additional 23,000 jobs to the 29,000 that have already been lost in 2009.

According to a study released by renowned economic analyst, John M. Urbanchuck, there will be a major loss of jobs and income, increased demand for petroleum diesel, a degradation of energy security, decreased demand for soybean oil and lower soybean prices leading to a negative impact on farm income, stranded investment as biodiesel capacity is idled, and lost tax revenue for States and local Governments.

The U.S. House of representatives is tentatively scheduled to consider legislation that would extend a host of expiring tax provisions, including the biosiesel tax incentive for one year. With health care dominating the Senates focus, it's unclear when, or, if the U.S. Senate will address this issue before the end of the year. Both chambers must reach an agreement of the final makeup of a larger tax bill carrying an extension of the biodiesel tax incentive.

The National Biodiesel Board, (NBB) has provided a Tax Credit Action Center with a sample letter, talking points, and contact information for your elected officials. Those who wish to participate in saving the Biodiesel Tax Incentive can visit the site provided by the NBB by Clicking Here.

Worldwide Demand for Biodiesel Expected to Double in the Next 5 Years

Biofuels usage is not only expanding in the U.S. and Europe, but also in Asia and Latin America. Tammy Klein, Executive Director of Global Biofuels Services for Hart Energy Consulting stated that thirty countries are implementing biofuels targets in 2010, with many of these countries in the developing world encouraging biofuels as a means of building energy security and improving their rural economies.

The Demand for biodiesel is anticipated to double and the supply of Biodiesel is predicted to triple in growth between 2009 and 2015. "Currently there is massive overcapacity on a gloabal basis in the biodiesel industry and utiliztion rates are generally below 50 percent", Klein added. At present, global biodiesel capacity is already capable to supply the demand projected for 2015 of 10 billion gallons per year.

Developing countries hold 17 percent of demand and nearly 50 percent of supply, (mostly for domestic use), and is expected to grow to 42.6 percent demand and 59.2 percent supply by 2015. At this time, thirty countries are utilizing the typical B5 blended biodiesel. Countries in Europe are migrating to a B7 blend and Brazil aiming even higher. Indonesia is contemplating B10. Many Countries are looking to biofuels to create jobs, economic development and domestic energy.

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Canadian Biofuel Production Expected to Increase

Government subsidies for renewable fuel requirements and production plants will boost biofuel production to an anticipated 76% in two years as reported by Biofuels International.

Currently produces 1.3 billion liters of ethanol and 120 million liters of biodiesel annually. Biofuel production will reach 2.5 billion liters yearly by2011. This includes 2 billion liters of ethanol and 500 million liters of biodiesel according to Gordon Quaittina, President of the Canadian Renewable Fuels Association.

Canada will mandate 5% renewable-fuel blend in petroleum by 2010 and 2% blend in diesel and heating oil by 2011.

Use More Biodiesel, Its good for you.

According to recently published research from the University of Idaho and the USDA, the use of more biodiesel will have a positive impact on reducing carbon pollution.

The study demonstrated that for every unit of fossil energy needed to produce biodiesel, there will be a return of 4.5 units of energy. Research also showed that the “energy in” to “energy out” ratio is energy balance. Because the main energy source to grow soybeans is the sun, soybean oil has a naturally occurring high energy balance.

Not only is biodiesel good for the environment, valuable by-products like glycerin are produced.

"This gives Americans even more reason to put their faith in the environmental and societal benefits of biodiesel," said Joe Jobe, CEO of the US National Biodiesel Board. "The Environmental Protection Agency should take this into account when considering biodiesel's greenhouse gas reductions."

Jobe says EPA should recognize that biodiesel production is growing more efficient, while oil exploration and drilling becomes more intensive each day.

Promising Outlook for Venture Capital Investments in Greentech

In comparison with the previous two quarters of this year, the third quarter is looking healthier for venture capital investments in the greentech sector as reported by greentech Media Research.

In Q1 there was $836 million invested in 59 deals. In Q2, 1.2 billion was invested in 85 deals. Q3 closed with 1.9 billion invested in 112 deals.

Solar was the most popular sector with $576 million invested in 29 deals. This was closely followed by the biofuels sector having $513 million in investments on 17 deals. Third runner up was smart grid with $160 million invested in 14 deals.

With $3.9 billion to date and one more quarter to go, this is already the second best year for Greentech Venture Capital investing behind 2008 which was $7.6 billion and 2007 was $3.5 billion.

Largely responsible for raising the third quarter greentech venture capital investments are the funds made available from the American Recovery and Reinvestment Act which are reaching more than $1 billion so far this quarter.