Senate rejects biodiesel tax credits

    The biodiesel industry once again came up empty in its bid to renew the $1-per-gallon tax credit from the federal government. Last week, the U.S. Senate voted 41-58 against a motion to suspend the rules and accept an amendment offered by Sen. Charles Grassley to extend the biodiesel tax credit, which expired at the end of last year.

    Mike Bohannan, president of the biodiesel plant Iowa Renewable Energy (IRE) in Washington, said the absence of the tax credit has crippled biodiesel production in 2010. He said IRE has not made any biodiesel at all since Jan. 1, and is not alone in that regard. 

    ?We?re in the same boat as the rest of the industry,? said Bohannan. ?The majority of biodiesel plants in the country have stopped production since the tax credit ran out.?

    Iowa Renewable Energy now employs 10 persons, down from its peak of 30 in 2008. Bohannan said he didn?t know of any further personnel changes. He said he?ll just have to wait and see what the future brings.

    ?We could be producing in a matter of a few weeks if the tax credits were reinstated,? he said. ?It wouldn?t take us long to get going if demand were to pick up.?

    When demand was high, IRE sold a large share of its biodiesel to trucks along the I-80 corridor from Iowa City to Joliet, Ill.

    ?Most of the biodiesel we make stays in the U.S., but we also sell it overseas,? said Bohannan.

    Despite the Senate?s vote last week, Bohannan believes that support for biodiesel is strong on Capitol Hill.

    ?There seems to be a desire to pass the tax credits,? he said. ?It failed to pass this time because it involved waiving some Senate procedures.?

For the full story, see the Sept. 21 edition of The Washington Evening Journal