Dec 10 2009
A study conducted by John M. Urbanchuk, a well-known economic analyst was released on 8 December, 2009 by the National Biodiesel Board (NBB). This study highlighted the economic influence of the biodiesel industry and it also focused on the negative impact on the industry if the biodiesel tax credit is allowed to lapse. December 31, 2009 is the allotted date for the expiry of the biodiesel tax incentive.
A stiff competition exists in the market between the price of biodiesel and petroleum fuel diesel because of the advancements brought about in the design of the biodiesel tax incentive. This incentive is structured in such a way that its value is projected in the market price of the fuel.
Urbanchuk concludes his study by highlighting the negative impacts that could be developed without the biodiesel tax incentive. These negative impacts include: degradation of energy security, decrease in income and availability of jobs, increase in demand for petroleum diesel and decrease in the demand for soybean prices. Income generated from farms will also suffer a huge loss due to a decrease in the price of soybeans. The state and local governments will also be affected by losing their tax revenue along with stranded investments.
Manning Feraci, Vice President of Federal Affairs for the National Biodiesel Board, remarked that biodiesel tax incentive since its establishment in the year 2004, has enabled the nation to improve its energy security and economic benefits. Improvements were seen in the usage of biodiesel and in commercial scale production. Feraci also stated that the nation will shed 23,000 jobs in addition to the 29,000 jobs that were shed in the year 2009 if the credit is allowed to lapse. Feraci insisted that the production of biodiesel can be regular only when the energy policy focuses in replacing the use of petroleum with low carbon fuel that is domestically produced and also when the energy policy gives importance to the creation of new jobs. Feraci concluded that the entire nation will be able to realize the positive outcome of domestic biodiesel production only when the Congress decides to extend the incentive before the end of the year 2009.
Source: http://www.biodiesel.org/