ASA announces biodiesel priorities for next energy bill

The American Soybean Association (ASA) has long advocated that soybean farmers can help the United States meet its energy needs through the production of soy biodiesel. During a recent national media teleconference, ASA outlined its biodiesel legislative priorities for Congress to consider as it develops another energy bill.

"Biodiesel is environmentally sound alternative to petroleum diesel that is made here in the United States using soybeans grown on American soil," said ASA President Bob Metz, a soybean producer from West Browns Valley, S.D. "Biodiesel is a top-notch product that lessens our dependence on foreign oil, improves the quality of the air we breathe and stimulates rural economies where it’s produced."

The domestic biodiesel industry is expanding at an exponential rate. Production of biodiesel fuel has grown from 2 million gallons in 2000, to more than 150 million gallons projected in 2006. Today, there are 65 operational biodiesel plants, while 50 more are under construction.

"Two key government programs have fueled biodiesel’s growth," Metz said. "They are the biodiesel tax incentive, enacted by Congress in 2004, and the CCC Bioenergy Program, initiated by the U.S. Department of Agriculture in 2001. The small biodiesel producer tax credit that was included in last summer’s energy bill is also beginning to contribute."

The importance of these programs cannot be over-emphasized. Nevertheless, both the biodiesel tax incentive and the small producer credit will expire at the end of 2008. And the CCC Bioenergy Program terminates at the end of this fiscal year.

Because biodiesel needs these programs to recognize its potential as a renewable fuel, ASA offered its three-point plan designed to enable biodiesel producers to manufacture greater quantities of the fuel. Specifically, ASA is asking Congress to include in any energy package legislation:

(1.) Extending the volumetric biodiesel tax incentive.

(2.) Extending small agri-biodiesel producer credit.

(3.) Authoring and funding a CCC Biodiesel program.

"By taking these actions, we estimate on-road diesel supplies could be increased by 2 percent by 2015," Metz said. "Each gallon of domestically produced biodiesel represents an expansion of distillate supplies, additional refinery capacity and is a direct replacement for imported refined diesel fuel. Boosting available fuel supplies will also have a positive impact on fuel prices to consumers."

During the teleconference, Metz also thanked Representative Collin Peterson (D-Minn.) for all that he does on behalf of soybean farmers. "Biodiesel has come a long way in a short amount of time, and (Representative Peterson’s leadership on this issue certainly contributed to our success," Metz said.

Representative Peterson said, "My home state of Minnesota has a long tradition of supporting the production and use of renewable fuels. In Washington, I am working in collaboration with the American Soybean Association, the National Biodiesel Board and other groups to encourage the growth of the domestic biodiesel industry by pressing the Administration to renew funding for the CCC Bioenergy Program and working to extend tax credits and other incentives."

Also participating in the teleconference was John Campbell, senior vice-president, Industrial Products and Government Affairs, for Ag Processing Inc (AGP), the first company to construct a dedicated biodiesel plant in the U.S.

"As a biodiesel pioneer with plans to expand production, AGP wholeheartedly supports ASA and its biodiesel agenda in Washington. We look forward to working along side ASA as it pushes to extend the biodiesel tax incentive beyond 2008," Campbell said.

AGP is expanding its soy biodiesel production and will soon be producing approximately 58 million gallons of soy biodiesel annually.

"With each fill-up, Americans are reminded of our energy challenges," Metz said. "While there are no simple answers to this problem, one can safely conclude that the country needs more fuel. And that’s a need soybean farmers stand ready to fill through the production of more soybean-based biodiesel."

The American Soybean Association is the policy, domestic marketing, new uses, research and international marketing advocate of the U.S. soybean farmer. ASA is a membership organization representing 26,000 soybean producers. It's mission is to improve U.S. soybean farmer profitability.

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