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Groups applaud bioenergy proposal

The American Soybean Association and the National Biodiesel Board are applauding House Agriculture Committee Chairman Collin Peterson (D-Minn.) for proposing to reauthorize and double funding for the CCC Bioenergy Program in the 2007 farm bill.

"Chairman Peterson is a true champion of the U.S. biodiesel industry," said ASA President Rick Ostlie, a soybean farmer from Northwood, N.D. "If his proposal is realized in the 2007 farm bill, biodiesel made from soybean oil and other domestic feedstocks can play a major role in America’s renewable fuel strategy for reducing dependence on foreign oil, cutting greenhouse gas emissions, and strengthening and diversifying our rural economy."

NBB Chairman Darryl Brinkmann, a soybean producer from Carlyle, Ill., added that "Chairman Peterson’s initiative would give a real boost to the young U.S. biodiesel industry, helping new plants in rural areas compete with subsidized biodiesel imports and to weather current volatile energy markets."

The Bioenergy Program reauthorization was included in a draft Energy Title released by Chairman Peterson for this year’s omnibus farm bill legislation. It would extend the original program authorized in the 2002 farm bill for 2008 through 2012, and provide a total of $1.5 billion in funds (an average of $300 million per year) from the Commodity Credit Corporation (CCC) to encourage increased production of biodiesel, ethanol, and other energy products derived from biomass by U.S.-based companies.

This amount is twice the annual funding level of $150 million provided under the previous Bioenergy Program, and reflects the growth of domestic bioenergy industries, including biodiesel, over the past five years.

Analysis published by the U.S. Department of Agriculture (USDA) indicates that every 50 million gallons of biodiesel raises soybean prices one percent. Last year, the industry produced about 250 million gallons of biodiesel, most of it soy-based.

In addition to biodiesel, the program would support increased production of cellulosic ethanol and other energy products derived from a variety of feedstocks. The draft Energy Title also proposes reauthorizing and funding the Biodiesel Fuel Education Program, another major priority of ASA and NBB.

Ostlie stated that "the Bioenergy Program is vital for U.S. biodiesel companies who use soybean oil as their primary feedstock, but face increasing competition from imported biodiesel and feedstocks, some of which benefits from significant foreign government subsidies."

Ostlie added that "biodiesel is not protected against imports by a tariff equal to its federal tax incentive. The incentive provided to domestic producers by the Bioenergy Program can help offset advantages provided to foreign biodiesel and encourage continued growth of this young industry. For this reason," the ASA President continued, "we hope the incentive provided under the program can be made available on all domestic biodiesel production, rather than only on additional production."

Brinkmann said "NBB is pleased that Chairman Peterson has proposed reauthorization of the Biodiesel Fuel Education Program in his draft Energy Title. NBB has used these funds on everything from enhancing fuel quality, to increasing the number of petroleum distributors carrying the fuel, to generating positive warranty position statements for biodiesel blends from automakers. We hope that the program can be expanded in the 2007 farm bill."

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