Statements on Introduced Bills and Joint Resolutions

Floor Speech

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Mr. GRASSLEY. Mr. President, today I am introducing the Biodiesel Tax Incentive Reform and Extension Act of 2015. I am pleased to be joined by Senator Cantwell. Our bill will modify the biodiesel fuel blenders credit to a domestic production credit, and extend the credit through 2018.

Congress created the biodiesel tax incentive in 2005. As a result of this incentive, and the Renewable Fuel Standard, biodiesel is providing significant benefits to the nation. Domestic biodiesel production supports tens of thousands of jobs. Replacing traditional diesel with biodiesel reduces emissions and creates cleaner air.

Homegrown biodiesel improves our energy security by diversifying our transportation fuels and reducing our dependence on foreign oil. Biodiesel itself is a very diverse fuel. It can be produced from a wide array of resources such as recycled cooking oil, soybean and other plant oils, and animal fats.

Senator Cantwell and I have been advocating for years a modification to the current incentive. We have proposed making the credit available for the domestic production of biodiesel, rather than a mixture credit available to the blender of the fuel, going back to 2009.

The bill we are introducing today is similar to an amendment that I offered with Senator Cantwell during consideration of the tax extenders package in the Senate Finance Committee in July of this year. Our biodiesel reform amendment passed unanimously by voice vote.

Converting to a producer credit improves the incentive in many ways. The blenders credit can be difficult to administer, because the blending of the fuel can occur at many different stages of the fuel distribution. This can make it difficult to ensure that only fuel that qualifies for the credit claims the incentive It has been susceptible to abuse because of this.

A credit for domestic production will also ensure that we are incentivizing the domestic industry, rather than subsidizing imported biofuels. It's projected that imports from Argentina, Singapore, the European Union, South Korea and others could exceed 1.5 billion gallons over this year and next.

We should not provide a U.S. taxpayer benefit to imported biofuels. By restricting the credit to domestic production, we will also save taxpayer money. The amendment adopted in the Finance Committee is estimated to reduce the cost of the extension by $90 million.

Importantly, modifying the credit will have little to no impact on the consumer. Much of the credit will continue to be passed on to the blender and ultimately, the consumer. Additionally, the U.S. biodiesel industry is currently operating at only 60 percent of capacity. The domestic biodiesel industry has the capacity and access to affordable feedstocks to meet the demand of U.S. consumers.

It is my understanding that representatives from the House and Senate, along with the White House, are currently meeting to finalize a tax extender package before the end of the year. I strongly urge them to maintain the Senate position, and include the biodiesel reform policies that were adopted in the Senate Finance Committee.

This modification will ensure that the credit is doing what Congress intended--incentivizing investment in domestic biodiesel production. Surely, House and Senate leaders recognize that we should not be providing a U.S. taxpayer subsidy to already heavily subsidized foreign biodiesel imports.

I therefore urge my colleagues to support this common-sense, cost reduction modification.

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