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House to vote on biodiesel credit, disaster aid

Update: The House adjourned without taking action on the American Jobs and Closing Tax Loopholes Act today. House Speaker Nancy Pelosi said the leadership had decided to postpone the vote until next week to give members more time to study the provisions of the $200-billion measure.

A critical vote for the biodiesel industry and for soybean producers is scheduled in the House of Representatives today.

The vote will be on the American Jobs and Closing Tax Loophole Act, H.R. 4213, which would provide for a one-year retroactive extension of the biodiesel tax incentive.

Through no fault of its own, biodiesel has become the red-headed stepchild of the biofuels sector. Biodiesel came late to the party, some years after corn producers were able to significantly expand the market for corn-fed ethanol. As demand for biodiesel slowly grew, the price of soy oil jumped, making it difficult for biodiesel producers operating on tight margins to make a go of it.

Then Congress allowed the biodiesel tax incentive to expire in December. A number of biodiesel plants either ceased operations or curtailed them. Analysts estimate the biodiesel industry has lost more than half of its production since the tax incentive expired on Jan. 1.

The vote will also be important for farmers who experienced crop losses due to weather in 2009 because the bill contains the disaster assistance language some Mid-South members of Congress have been trying to pass since last fall. The language includes aid for specialty crops, livestock, sugar, aquaculture, cottonseed and poultry.

The American Soybean Association and other farm organizations are asking producers to contact their member of Congress and ask them to vote in favor of H.R. 4213. You can use this link to contact your representative: or call the U.S. Capitol Switchboard today at (202) 224-3121.

Here are some talking points to give you member on the bill:

• Lapse of the biodiesel tax incentive is costing U.S. jobs and stifling production: In 2009, the U.S. biodiesel industry supported 23,000 jobs in all sectors of the economy on an annualized basis. This added $4.1 billion to the nation’s gross domestic product and generated $828 million in tax revenue for federal, state and local governments.

• Since the tax incentive lapsed at the beginning of the year, the industry has lost more than half of its production. The economics of biodiesel will continue to worsen the longer the tax incentive is allowed to lapse.

• Biodiesel reduces our dependence on petroleum and is good for the environment: Biodiesel can play a major role in expanding domestic refining capacity and reducing our reliance on foreign oil.

• The 1.9 billion gallons of biodiesel produced in the U.S. since 2005 has displaced an equivalent amount of diesel fuel with a clean-burning, efficient fuel that reduces greenhouse gas emissions by as much as 85 percent compared to petroleum diesel fuel and creates 4.56 units of energy for every unit of energy that is required to produce the fuel.

Besides $1 billion in supplemental direct payments to producers with a minimum 5-percent loss in production, the bill would provide $42 million in cottonseed assistance, $25 million in aquaculture assistance, $21 million to a Hawaiian sugar cane cooperative, $75 million to poultry producers and $150 million for specialty crop producers. The program is designed for payments to be issued quickly through USDA and state block grants.

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