Biofuel producers want more tax subsidies

| Thursday, May 10, 2007

Biodiesel producers strongly believe an existing $1-per-gallon federal tax subsidy is necessary seed money to grow the industry.

But now, officials with the National Biodiesel Board and the American Soybean Association say even more assistance is needed to help them compete in a fuel industry dominated by big oil.

The groups are asking the federal government to incorporate an additional subsidy of 43 cents per gallon into the 2007 farm bill.

“This program would ensure the competitiveness of domestically produced biodiesel, protect this new industry against adverse economic conditions, and support its continued development and growth,” John Hoffman, first vice president of the American Soybean Association, testified in a recent hearing before the U.S. Senate Agriculture Committee.

The subsidy would help producers build more refining plants where crops are turned into renewable fuels.

A federal commitment of a proposed $129 million in the next farm bill could increase the biodiesel pool by 300 million gallons per year, biodiesel board officials say.

Biodiesel production so far in the U.S. has doubled every year since 2004, when 25 million gallons were brought to market, according to National Biodiesel Board figures.

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