The Car and Truck Fleet and Leasing Management Magazine

Biodiesel Industry Suffers as Tax Credit Ends

January 05, 2010

OKLAHOMA CITY - With the expiration of a federal tax credit that provided makers of biodiesel $1 for every gallon, some U.S. biodiesel producers say they will shut down without the government subsidy, reported the Associated Press.

Biodiesel, which is usually blended with traditional fuel, had over the past few years been the fastest growing fuel among fleet vehicles like buses, snow plows and garbage trucks, reported AP. However, those fleets can shift to traditional fuel, as some have, when the price of diesel drops.

With an estimated 180 biodiesel plants in about 40 states, the biodiesel industry is now operating at only 15 percent of its potential capacity, according to the National Biodiesel Board, largely because the price of traditional diesel has collapsed, reported AP.

The country's largest biodiesel refinery, in Houston, sits idle. Another major refinery in Hoquiam, Wash., that was restarted recently to meet alternative fuel mandates in Oregon and British Columbia was shut down after an explosion in December, according to AP.

The loss of the tax credit, which helps pay salaries, buy new equipment, and in good times to turn a profit, will hit small producers particularly hard.

A one-year extension of the biodiesel tax credit was included in a bill that was approved by the U.S. House recently, but it never made it through the Senate. Lawmakers say the tax credit will be retroactive if approved, said AP.


Twitter Facebook Google+


Please note that comments may be moderated. 
Leave this field empty:

Fleet Incentives

Determine the actual cost of owning and running a vehicle in your fleet. Compare vehicles by class and model.

Sponsored by

Sid Rose was the executive secretary of the American Automotive Leasing Association from 1964 to 1985.

Read more

Fuel Saving Strategies Survey

View our 2008 survey to benchmark your fleet's fuel and green strategies with other fleets.

Fuel Calculator

A managed fuel program can help you save time and money and gain control over the way you fuel your vehicles. Determine your potential savings by using our fuel calculator.
Launch Fuel Calculator 

Fuel Prices

U.S. Gasoline and Diesel Fuel Prices.

Launch Fuel Prices 

Up Next

More From The World's Largest Fleet Publisher